Stop Identity Theft Before it Destroys Your Finances

My friend was beside herself when she called. She said “I have not been visiting porn sites – honest! But the bank won’t remove those debits from my account, and now I’m overdrawn and the checks I wrote are bouncing! This is a nightmare and I don’t know what to do!”

She was distraught – and with good reason. Her identity had been stolen, and the thief had been having a good time. In her case, she felt that her personal reputation was being destroyed along with her finances. Her thief had been paying for access to sites that gave her a label she definitely didn’t appreciate.

Her first call to the bank led her to believe that they would reverse those debits, remove the overdraft charges, and honor the checks she had written. But it didn’t happen, and later phone calls informed her that she would be responsible for the debits.

What should she have done?

Instead of just calling the bank to dispute the debits, she should have immediately filed a police report, and then using the information from the police report, filed a notice with the credit bureaus, alerting them to her status as a victim of identity theft.

Legally reporting such an incident gives it the credibility the bank needs in order to reverse the debits and remove the overdraft status. Having her police report in hand, she’d have gotten far more cooperation from bank officials than she got by saying “I don’t visit porn sites!”

She should also have canceled her bank account and credit card numbers – getting new ones with different account numbers. Since she tried to solve the problem at the bank level, her thief had an extra 2 or 3 weeks to do his damage.

Next she needed to find out if the thief had stolen more than just her bank account. If he had gotten the numbers from her debit card, he could well have all of her credit card numbers plus the information from her driver’s license.

And he had. He was using her credit cards at gas stations and had already tried to open a new account, using her name and social security number, with a new address. He’d have succeeded if he hadn’t overdrawn her bank account, putting a big “black mark” on her credit report.

After several months, my friend got her finances straightened out, but she could have avoided a lot of trouble if she’d taken 2 simple preventative steps:

1. Kept a close watch on her checking account – it’s easy to go on line every few days and check to see that the transactions really are yours. And she should have balanced the statement each time it arrived.
2. Kept a watch on her credit cards – that’s also a simple matter of going to the site and looking at the transactions since your last statement. Of course, she should balance the statement each month and check up on any transactions she doesn’t recognize.

Identity theft is big business now – so it pays to take precautions!