Unfortunately, credit fraud is an increasingly serious problem, having grown almost threefold in frequency in the last five years. Under the most common scam, called "identity theft", the criminal opens a credit card or other account with another person's name and social security number (or other uniquely identifying information). The criminal then purchases goods and services and you get stuck with the bill. By law, consumers only have to pay $50 of the loss if they report the fraudulent activity promptly, but it's still a hassle to get the situation resolved, and in any case everyone suffers since the credit card companies and lenders pass the costs on to the consumer in the form of higher prices and higher interest rates.
Here are some steps you can take to reduce the risk of credit fraud (in addition to checking your credit report periodically):
- Try to limit the number of people you give your Social Security number to. Get a copy of your Social Security Earnings and Benefits statement once a year to ensure that no one is using your social security number for employment. Social Security Administration (800) 772-1213.
- Sign new credit cards as soon as you receive them.
- Protect your credit cards as if they were money.
- Check every charge on every statement and confirm that they are purchases that you made. Report any unexpected charges immediately.
- Maintain a list of your credit card account numbers and those companies' phone numbers in a safe place, so you can notify them immediately if your cards are lost or stolen.
- Don't reveal your credit information to anyone who calls you. Instead, call that company's customer service number to confirm that the caller's intent is genuine. Similarly, don't enter your credit card number into a website that is not secure.
- For PIN's and other identification numbers, don't use obvious choices, change them periodically, and don't let others see them when you use an ATM or public phone.
- Cut up pre-approved card offers, receipts, and other documents that reveal your card numbers.
- If your credit card bill doesn't arrive on time, call the issuer to see what the problem is. A thief may have changed the billing address to enable them to use it for a longer period of time.
If you have been a victim of credit fraud, contact the or emailing them at Federal Trade Commission's complaint center at (202) FTC-HELP. Or write to: Consumer Response Center, Federal Trade Commission, CRC-240, 600 Pennsylvania Ave NW, Washington, D.C. 20580.