Identity Theft - Managing Financial Records

Carefully review all financial records on a regular basis

It is extremely important to carefully review your financial records and bank statements rather than simply filing them or throwing them away.  If you conduct your banking online, check frequently to make sure that your account is accurately reflecting purchases and deposits.  Make sure that you can verify all of the purchases that are showing.  If you receive your statements through the mail, you should do this immediately after receiving the statement.  If you don't recognize a purchase, make sure you follow up on it, even if it is only for a small amount.  Some identity thieves start small to see if it will be noticed before moving to larger items.  While this may be more difficult if you are married and/or share a joint account, make sure that you and your spouse take time to reconcile your checkbooks and purchase records, rather than just assuming that an unrecognized purchase was made by the other party.

Pay attention to all financial notices that arrive in the mail.  Watch out for red flags that could tell you when someone is using your identity.  For example, all credit agencies are required to notify you when a credit application has been declined.  These letters are called "adverse action notices."  If you receive one of these for a credit card you don't remember applying for, follow it up immediately by calling the company directly, rather than just shrugging it off as some kind of system error.  Likewise, and perhaps even faster if possible, if you receive a notice saying that you have been approved for a credit card that you do not remember applying for.

Also, be aware that someone can use your identity to apply for credit and register themselves on the account as a co-signer.  They can then use the account at their convenience, and even arrange for all mail on the account to be delivered to their address.  If your social security number is compromised, they can use that number to file fraudulent tax returns, and receive your income tax refunds and/or benefits. You should choose your tax preparer carefully, and be aware of what informational protection measures his office complies with.

It is important to be informed about your financial situation, and pay close attention to any financial discrepancies that might occur, even if they are for a relatively small dollar amount.  If you lose a credit card, or suspect that your identity has been compromised, take action immediately.  Sometimes identity thieves will not necessarily use the information they have obtained immediately.  They may wait 30-60 days (or longer) before acting to compromise your credit.

Next Article: Identity Theft - How Credit Reports Can Help