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CPA serving individual and small business clients. Accountants Who Come To Us For Guidance David M. Kaufmann, CPA 1466 Adobe Falls Way,
Email: contact2@kaufmann-cpa.com |
An Ounce Of Prevention…“An ounce of prevention is worth a pound of cure.” According to the Associated Press (5/11/2003), “…the average victim will spend 175 hours of their own personal time cleaning up the financial mess left behind." How much is your time worth? 175 hours is like taking over one month of unpaid vacation to have a miserable time. Your first line of defense is to take reasonable steps to outsmart identity theft thieves. Unfortunately, taking steps to outsmart identity theft thieves is not 100% effective. Your second line of defense is to limit how much damage can be done if you do become a victim. According to the Associated Press (5/11/2003), "It takes the average consumer a full year to realize their identity has been stolen.” Way too much damage can be done in one year. Steps To Prevent Identity TheftProtect Personal InformationDon’t carry you Social Security Card with you! Don’t give out your birth date, your Social Security Number, your mother’s maiden name, etc. unless you absolutely have to. Protect Your Incoming Mail and Outgoing TrashLook into ways to lock your mailbox. Bills and bank statements can be a bonanza to identity thieves. If you can’t lock your mailbox, drop your outgoing mail off in a locked mailbox rather than your unlocked mailbox. Have your Post Office hold your mail when you are on vacation. Don’t let it sit in an unlocked mail box. Shred documents before throwing them away. Cross cut shredders are the best. Any good office supply store and may discount stores carry shredders. Be sure to shred the applications to new credit card offers! If you move to a new residence or office, identity thieves might be looking for the large quantity of trash left by the curb. Your trash might be someone else’s goldmine. Credit CardsDon’t have any more credit cards than you need. Even without identity theft, credit cards are frequently a source of serious damage to personal net worth! Why are so many people afraid of using credit cards on the Internet, but don’t hesitate to give a credit card to a minimum wage store or restaurant employee? Sometimes using cash is safer. Computer SecurityThere are complete books written on this subject, but a little bit of common sense can go a long way in avoiding identity theft via the computer.
Are You Being Watched?Don’t let someone see what password you use when you use an ATM. Stop Identity Theft As Soon As PossibleMonitor Your Credit HistoryThere are detection warning services, such as Equifax’s Credit Watch . This service will warn you about most legal and illegal credit related activity. If you are using Credit Watch and someone else is applying for a new Visa card, using your identity, Equifax will notify you of that activity in, typically, 1 to 7 days. Keep in mind that it takes the average identity theft victim 12 months to figure out that they are an identity theft victim. You are much better off learning of a problem 7 days after the fact than 12 months after the fact. Even though Credit Watch can’t stop the crime, its warnings might significantly reduce the damage and your lost time. Some recommend getting a copy of your credit report once a year. However, what happens if you get your credit report every January 1, and someone else applies for a loan using your identity on January 2? This could result in a 364 day delay in getting the bad news. Reconcile Your Credit Card & Bank StatementsMatch the credit card charges on the statement up with the charge slips or invoices. If something doesn’t match, check it out! Check Your IRS TranscriptIf you live in Colorado, could someone in California be using your Social Security Number? It happens all the time. Someone in California doesn't have a Social Security Number, but wants to work. They randomly pick your Social Security Number. They get the job and a W-2 form gets sent to them, but it has your Social Security Number. So far the damage is minimal. After a while, that worker wants to buy a used pickup truck. They use your Social Security Number. They default on the loan. Now you have to prove that the unpaid loan is not yours. Periodically, request an IRS tax transcript using Form 4506-T. In particular, you want the W-2 and 1099 information. It could take several months for the IRS to mail you the results. When you receive the transcript, the job and account should all look familiar. If it does not, investigate! Please contact us, if you would like us to do this for you. Other Useful LinksThe Federal Trade Commission's Identity Theft Home Page The Three Major Credit Reporting Services: |