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FDIC Consumer News
Important Update: FDIC Insurance Coverage Increased in Late 2008
In the fall of 2008, Congress temporarily increased the basic FDIC insurance coverage limit from $100,000 to $250,000 through December 31, 2009. In addition, the FDIC simplified the rules for the calculation of deposit insurance coverage for revocable trust deposits, including an expanded definition of the "eligible beneficiaries" for additional insurance coverage. As a result, certain previously published information related to FDIC insurance may not reflect the current insurance coverage. For more information, go to www.fdic.gov/deposit/deposits/index.html or call toll-free 1-877-ASK-FDIC (1-877-275-3342) Monday through Friday, 8:00 a.m. to 8:00 p.m., Eastern Time. For the hearing-impaired, the number is 1-800-925-4618.
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Fall 2004
ID Theft: Strategies and Help for Fighting Back
Your personal and financial information can be as good as cash to a fraud artist. Here isour latest "to do" list for keeping your identity to yourself.
You know there is only one you. DNA analysis can even prove it scientifically. Even so, a crafty criminal may be able to "clone" you for purposes of committing fraud. With sufficient information, a con artist can become "you" and use your identity to order new credit cards, make counterfeit cards or checks, or otherwise go on a spending spree in your name. It's called identity theft or ID theft, and it's a serious problem we've written about frequently in FDIC Consumer News. But we believe identity theft is worth focusing on again. Here's why.
First, despite the efforts of law enforcement, ID theft is becoming more sophisticated and the number of new victims is growing. In general, consumers are protected against liability for unauthorized accounts or transactions under federal and state law and by financial industry practices. However, innocent victims of ID theft sometimes do suffer losses. And if the crime is not detected early, people may face months or years cleaning up the damage to their reputation and credit rating, and sometimes they lose out on loans, jobs and other opportunities in the meantime.
The evolution of ID theft includes the spread of fraudulent "phishing"
e-mails. These are unsolicited e-mails purportedly from a legitimate
source — perhaps your bank, utility company, well-known merchants, your Internet service provider or even a trusted government agency such as the FDIC — attempting to trick you into divulging personal information.
Another reason we are featuring
ID theft again is that a new federal law — the Fair and Accurate Credit Transactions Act (FACTA) — is about to give you some powerful new tools to help fight this crime.
So, here is our latest "to do" list you can follow to minimize your chances of becoming a victim of ID theft.
1. Protect your Social Security number (SSN), credit card and debit card numbers, PINs (personal identification numbers), passwords and other personal information. Never provide this information in response to an unsolicited phone call, fax, letter or e-mail — no matter how friendly or official the circumstances may appear.
In case your wallet gets lost or stolen, only carry the identification, checks, credit cards or debit cards you really need. The rest, including your Social Security card, are best kept in a safe place. Also, be extra careful if you have housemates or if you let workers into your house because they sometimes are in the best position to find personal information and use it without your knowledge.
Likewise, don't pre-print your Social Security number, phone number or driver's license number on your checks. "It's too easy for someone who sees your check to copy this personal information and even sell it to an ID thief," said Kathryn Weatherby, an Examination Specialist for the FDIC. Remember that you have the right to refuse requests for your SSN from merchants and service providers — they have other ways to identify you. And if your state puts Social Security numbers on driver's licenses, find out if you can use another number.
2. Protect your incoming and outgoing mail. Chances are that your mail carrier will deliver a credit card or bank statement, an envelope containing a check, or other items that can be very valuable to a thief. Or perhaps you'll put in the mail a check or papers containing account numbers or other personal financial information.
For incoming mail: Try to use a locked mailbox or other secure location, such as a P.O. box. If your mailbox isn't locked or in a secure location, try to promptly remove mail that's been delivered or move the mailbox to a safer place. And when ordering new checks, "ask about getting the boxes delivered to your bank branch instead of having them mailed to your home and running the risk of finding them out on your front stoop," said Weatherby.
For outgoing mail containing a check or personal information: Deposit it in a U.S. Postal Service blue collection box, hand it to a mail carrier or take it to the post office instead of leaving it in your doorway or home mailbox. "A mailbox that holds your outgoing bills is a prime target for thieves who cruise neighborhoods looking for account information," said Jeff Kopchik, an FDIC Senior Policy Analyst. "Even worse is putting up the flag on a mailbox to indicate there is outgoing mail sitting there, because that's also an invitation for a thief."
3. Keep your financial trash "clean." Thieves known as "dumpster divers" pick through garbage looking for pieces of paper containing Social Security numbers, bank account information and other details they can use to commit fraud. Examples of valuable trash include insurance information containing your SSN, blank checks mailed by financial institutions with offers to "write yourself a loan," canceled checks and bank statements.
Your best protection against dumpster divers? Before tossing out these items, destroy them, preferably using a "crosscut" shredder that turns paper into confetti that cannot be easily reconstructed. Also remember our suggestions for limiting the use of your Social Security number, which would lessen the likelihood it will be found in your personal papers at home.
4. Keep a close watch on your bank account statements and credit card bills. Monitor these statements each month and contact your financial institution immediately if there's a discrepancy in your records or if you notice something suspicious, such as a missing payment or an unauthorized withdrawal. While federal and state laws may limit your losses if you're a victim of fraud or theft, your protections may be stronger if you report the problem quickly and in writing. You also avoid the hassle and inconvenience of straightening things out.
Contact your institution if a bank statement or credit card bill doesn't arrive on time. This mail, if missing, could be a sign someone has stolen your mail and/or account information and perhaps has changed your mailing address to run up big bills in your name from another location.
5. Avoid ID theft on the Internet. "Hackers" and scam artists are finding ways to steal private information transmitted over the Internet or stored on computer systems. You can do a lot to protect yourself while shopping, banking,
e-mailing or surfing on the Web. For example, never provide bank account or other personal information in response to an unsolicited e-mail or when visiting a Web site that doesn't explain how your personal information would be protected.
Phishing scams that arrive by e-mail typically ask you to "update" your account information. But don't fall for this ruse. Legitimate organizations wouldn't ask you for these details — they already have the necessary information or they can obtain it in other ways. Don't respond to these e-mails and don't open any attachments unless you independently confirm the validity of the request by contacting the legitimate organization the way you usually would, not by using the e-mail address, Web site or phone number provided in the
e-mail. If you believe the e-mail is fraudulent, consider bringing it to the attention of the Federal Trade Commission. And if you do open and respond to a phony
e-mail, contact your financial institution immediately.
Take precautions with your personal computer. Among them: Install a free or low-cost "firewall" to stop intruders from gaining remote access to your PC. Download and frequently update security "patches" offered by your operating system and software vendors to correct weaknesses that a hacker might exploit. Use passwords that will be hard for hackers to guess. For example, use a mix of numbers, symbols and letters instead of your date of birth or last name.
Also, shut down your PC when you are not using it. "Don't believe that you are safe if you merely log off the Internet," said Eloy Villafranca, an FDIC Community Affairs Officer. "Hackers can still get into your computer as long as there is power going to the PC."
To get more information about computer security and safeguarding personal information, visit the Federal Trade Commission's Web site at www.ftc.gov/infosecurity. For more about avoiding phishing scams, see the new FDIC Web page on the subject at
www.fdic.gov/consumers/consumer/alerts/index.html, which includes links to past articles in FDIC Consumer News and to a new brochure from federal financial institution regulators called You Can Fight Identity Theft.
6. Exercise your new rights under FACTA to review your credit record and report fraudulent activity. Your credit report, which is prepared by a credit bureau, summarizes your history of paying debts and other bills. Credit reports are used by lenders, employers and others who, by law, have a legitimate need for the information.
For many years, you've had the right under federal law to obtain a free copy of your credit report in certain circumstances, including concerns about ID theft, so you can report a crime in progress. And under long-standing practices in the credit reporting industry, you've been able to request that a "fraud alert" be placed in your credit file if you suspect that a criminal is attempting to open new accounts in your name. But starting soon, FACTA expands your rights in these areas.
FACTA allows you to get one free credit report each year from each of the three major credit bureaus that operate nationwide —Equifax, Experian and TransUnion— with just a single phone call, letter or e-mail. This is a change from previous law because you will be entitled to your free copy even if you don't suspect ID theft or any other problem with your credit report. Under FTC rules, free credit reports will be phased in over nine months, beginning in western states on December 1, 2004, and moving east with completion scheduled for September 1, 2005. (See more details at www.ftc.gov/bcp/conline/pubs/credit/freereports
.)
After you get your credit report, look for warning signs of actual or potential ID theft. These include mention of a credit card, loan or lease you never signed up for, and requests for a copy of your credit record from someone you don't recognize (which could be a sign that a con artist is snooping around for personal information).
If you already are a victim of ID theft or you suspect you are a target, FACTA gives you specific legal rights to place a fraud alert in your credit files at all three major credit bureaus with a phone call or a letter to any one of their fraud departments. "These fraud alerts will help prevent an imposter from obtaining new credit in your name because, at a minimum, the lender will be required to make a reasonable attempt to verify the applicant's identity," explained Michael Jackson, an Associate Director of the FDIC's Division of Supervision and Consumer Protection.
If you are a victim of identity theft, you also may have an "extended" fraud alert placed in your credit file instead of a basic alert. "An extended alert requires a lender to contact you and get your okay before authorizing any new account in your name," explained FDIC Attorney Robert Patrick. "It also is effective for seven years instead of 90 days."
To place an extended alert in your credit file, Patrick said you must submit your request in writing and include a copy of an ID theft report filed with a law enforcement agency (such as the police) or with the U.S. Postal Service.
FACTA also will enable military personnel called up to active duty to place an alert in their credit files so that lenders acting on loan applications can guard against possible ID theft.
Final Thoughts
Your personal and financial information can be as good as cash to a criminal. So, take ID theft seriously. Start by following our simple suggestions for keeping your sensitive information under wraps. "It's a lot easier to rethink your habits and behaviors now," said Jackson, "than to repair the damage after identity theft occurs."
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