Tag: Identity Theft

Credit Identity Theft

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Did you know that in 2020 there were 1.4 million reports of identity theft? According to Mint.com, credit card fraud accounted for 393,207 of the nearly 1.4 million reports of identity theft.

Below is a story of how a Red Crown member was a victim of credit identity theft.

Our member received an email about opening a new line of credit from a credit card company. He became concerned about the email because he did not open a line of credit. His first step was to check his credit on an app. It showed the line of credit was open at Wells Fargo. He then called Wells Fargo’s Dispute Center and found out that he was a victim of credit identity theft.

An investigation showed that the criminal opened a line of credit at a furniture store. He created a fake license with the member’s information and knew his personal information. Luckily, the member was smart enough to know something was wrong and then followed the appropriate steps before it did any real damage to his finances.

Credit identity theft can happen when someone steals your personal information; driver’s license, social security number (SSN), birth date, and card information. You may fall victim to this type of theft without evening knowing. Some warning signs are: your credit score has changed, there are accounts on your credit report you did not open, and if collectors start calling you.

If you have fallen victim to credit identity theft, below are some things you should do:

Credit Report 

You should be monitoring your credit report to look for signs of fraud before there is a lot of damage. USA.gov suggests checking your credit report once per year. A free site you can use is annualcreditreport.com and a free app is Credit Karma.

Contact Credit Card Issuers Fraud Department 

The Federal Trade Commission (FTC) said the first step is to contact the company where the fraud took place. Once you know the company, call their fraud department or dispute center. They will be able to guide you on what to do next.

Credit Fraud Alert 

Your next step is placing a fraud alert on your credit report. The FTC says that a fraud alert will make it harder for someone to open a new credit account in your name. For example, a business must verify your identity before they open new credit in your name.

You can place a fraud alert on your credit reports once per year – free of charge. The credit bureaus are:

  • Experian: 888-397-3742
  • TransUnion: 800-680-7289
  • Equifax: 1-800-525-6285

Credit Freeze

You can place a credit freeze on your credit report. When you place a freeze, no one (including you) will be able to open a new credit account. This freeze will last until you remove it.

Account Alerts

A great precaution is to step up alerts on your accounts. The type of alerts you can receive depends on the financial institution. Some examples are minimum withdrawal alerts, log-in monitoring, etc.

Passwords

Make sure you change your passwords regularly. When creating a password, make it unique and not used for other accounts. The more complex the password is, the harder it is for identity thieves to guess it.

Conclusion

If you have fallen victim to identity theft, report it immediately to the Federal Trade Commission at https://www.identitytheft.gov/#/ or by phone at 1-877-438-4338. You should follow their recommended steps to make a recovery plan.

*Red Crown Credit Union is not a financial planner or advisor, and this blog gives general ideas on how to prevent identity theft. Individual results may vary.

Taxpayer Identity Theft

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Time has flown by – it’s already tax season! During tax season, scammers are on the prowl. In 2020, The IRS Criminal Investigation identified $2.3 billion in tax fraud. That is something you do not want to be victim of! Scammers have been known to pretend to be the IRS and may contact you by phone, email, text message, and mail. Below are some common types of scams.

Refund Recalculation Scam

In this situation, you will receive a text or email from an imposter saying that the IRS recalculated your tax refund and that they owe you more money. The email may have the IRS logo and a link for you to click on to submit a fake form for the refund. The link will ask you to provide your SSN, birthday, address, driver’s license number, and other personal information.

Tip: If the IRS did make a refund mistake, they will contact you through the mail first. They will never ask for financial or personal information through email. If you get an email, do not click on any links and delete the email.

Gift Card Scams

The gift card scam is becoming more common. The criminal will call saying that you owe the IRS money and if you do not pay a penalty fee, they will charge you with criminal activity. They will instruct you to purchase the gift cards from various stores and then the scammer will ask for the card’s number and pin.

Tip: The IRS will never call you about taxes you owe or penalties. No government agency will ever demand that you pay by a gift card.

NCUA/FDIC Needs Your Bank Information

NCUA is a federal institution that insures your money if your credit union fails (FDIC is the insurance corporation for banks). The scammer will contact you through emails, phone calls, letters, text messages, and social media asking for your bank information. Scammers will claim that they are the NCUA, to get your personal information to commit fraud.

Tip: The NCUA says that they do not send unsolicited correspondence asking for money, sensitive personal information, bank account information, card numbers, SSN and will never threaten you.

Tax Transcript Email Scam

Scammers will email you claiming to be the “IRS Online”. The email will contain an attachment that has your taxpayer’s tax transcript. A tax transcript is a summary of your tax return.

Tip: A tax transcript is a real thing from the IRS, but they will never email it to you. You will need to request it from the IRS and they will send it by mail.

These are just a few types of scams, but beware there are a lot more out there. Learn more about tax scams at https://www.irs.gov/newsroom/tax-scams-consumer-alerts.

Signs of Identity Theft

The IRS says that you may not know you’re a victim of identity theft until you’re notified by the IRS of a possible issue with your return.

Be alert to possible tax-related identity theft if:

  • You get a letter from the IRS inquiring about a suspicious tax return that you did not file.
  • You can’t e-file your tax return because of a duplicate Social Security Number.
  • You receive a tax transcript in the mail that you did not request.
  • You receive an IRS notice that an online account has been created in your name.
  • You receive an IRS notice that your existing online account has been accessed or disabled when you took no action.
  • You receive an IRS notice that you owe additional tax or refund offset or that you have had collection actions taken against you for a year you did not file a tax return.
  • IRS records indicate you received wages or other income from an employer you didn’t work for.
  • You’ve been assigned an Employer Identification Number, but you did not request an EIN.

Ways to Protect Yourself

  • Keep your SSN in a secure place.
  • Make sure your tax preparation services are a legit company.
  • File your taxes early.
  • If you file online, make sure you use a secure connection.
  • Don’t click on unknown links.
  • Don’t trust IRS calls, email, and text messages.
  • Don’t send personal information through social media.

Conclusion

If you have experienced tax fraud, visit the IRS taxpayer guide to tax fraud to learn what your next steps should be. If you have fallen victim to identity theft, report it immediately to the Federal Trade Commission at https://www.identitytheft.gov/#/ or by phone at 1-877-438-4338. You should follow their recommended steps to make a recovery plan.

*Red Crown Credit Union is not a financial planner or advisor, and this blog gives general ideas on how to prevent fraud. Individual results may vary.