The dilemma begins with a call from a debt collector requesting payment for charges made on several new credit cards.
This leads to a discovery of several loans on a new car, missing funds from a personal bank account, and a number of bounced checks. This is more than just careless spending, it is a crime.
According to John McFarland, a credit instructor for the department of finance insurance and real estate at VCU, identity theft is a constant threat.
He said the damages of identity theft can take an average of two years to correct.
“Statistically, you’re going to have it happen to you more than once in a lifetime,” McFarland said.
The Federal Trade Commission states on its Web site nine million Americans are affected each year by identity theft. According to McFarland, that number might be on the rise. Any time the economy gets weak, the number of potential people “looking for a quick buck” goes up, he said.
VCU Police Cpl. Jim DeFord urges consumers to maintain the privacy of their own information.
“The key thing is to maintain your records and maintain copies of all of your identification. You need to keep that in a secure location,” DeFord said. “Make sure every year you get your free credit reports.
Make sure there’s no suspicious activity going on with your accounts.”
The task of scanning all financial accounts by checking recent transactions should be a daily habit, McFarland said. The use of online banking can make this habit easier for consumers.
McFarland said consumers cannot control all the situations in which identity theft occurs, but they can control their response to identity theft.
“The first thing is call your bank,” McFarland said. Freeze activity in all accounts by contacting the banks and credit card companies directly. The credit card agencies must be notified to put a fraud alert on your account.
Identity theft can set victims back temporarily. Once identified, victims can begin fixing their financial record. If their credit score drops, victims can attempt to remove the false charges off all accounts and have their credit score re-evaluated.
According to McFarland, the first step a criminal will take is to use the entire credit limit on a consumer’s credit card. Typically the consumer’s credit score will go down once credit cards max out.
“Another thing you have to do, in addition to calling your bank and credit card company and credit agencies, is to call the police and file a police report,” McFarland said. “Getting a police report number gives you the backup you need when dealing with the credit card companies.”
Preventive steps McFarland said he recommends include never providing personal information to random requests. When contacting banks or credit card companies, make sure phone numbers and Web sites are reliable.
The Office of Multicultural Affairs at VCU offers a Dollars and Sense program that teaches students personal finance basics.
Ijuanzee Isom, a multicultural program specialist for OMSA, said the program’s goal is to help students not only reach academic goals but to become more responsible adults.
“I think it’s about being proactive about knowing who has your information and how they’re using it,” Isom said.