Last year, when a client tried to file his tax return he was notified by the IRS that a return had already been filed under his social security number. After doing some research, we found that identity thieves had swooped in early and filed a fraudulent tax return, claiming a large refund which had been direct deposited to a bank account. We then had to submit additional proof that our client was the rightful owner of the social security number before the return could be processed – a long and laborious process, as you can imagine. And unfortunately, this isn’t an isolated instance – tax fraud is on the rise.
While it seems that identity theft is all around us, the good news is that there are easy steps you can take to minimize your risk. Here are some quick tips:
Freeze your credit with all three major credit bureaus - Equifax, Experian and TransUnion — which restricts access to your credit report so new credit can’t be open under your name without your permission. It’s a free service and you just need to remember to unfreeze it temporarily if you apply for new credit.
Stay vigilant and know what is being reported on your credit.
Order a free credit report from the government-mandated www.annualcreditreport.com or directly from each credit bureau.
Order a free report of banking information reported in your name from www.chexsystems.com
Proactively request an IRS Identity Protection PIN that must be provided for your return to be successfully filed.
Be alert for statements that don’t arrive on time – the mailing address may have changed.
Review not just your bank and credit card statements, but your health insurance statement of benefits too. Health insurance fraud is a booming business.
Shred credit card offers that come in the mail, or better yet, request to stop receiving them at www.optoutprescreen.com
Monitor your minor children’s credit report - a child’s social security number may be compromised for years before it is discovered.
Don’t use public wi-fi for banking or shopping transactions.
If your identity does get stolen despite your best efforts, go to identityTheft.gov to report identity theft and set up a recovery plan that will guide you through each recovery step, including pre-fill letters and forms for you to send to businesses and debt collectors. And remember, consistent, diligent vigilance is your best protection – and it’s free!