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December 21, 2012
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Edwin Stephens Long-Term Investing & Financial Planning for LEOs
with Edwin Stephens

Don't become a victim of financial identity theft

Financial identity theft in the United States creates $54 billion dollars in damages and 15 million victims a year — and yes, some of those victims are cops

Can financial identity theft be perpetrated upon a victim without that person’s knowledge or awareness that his valuable information has been stolen?
Answer: Yes.

There are approximately 15 million victims of financial identity theft annually in the United States. Many of these victims are not aware that thousands of dollars have been stolen from them until they are denied credit or access to their existing banking relationships.

Financial Identity Theft
According to the AllClear ID Alert Network, financial identity theft occurs when a thief steals an individual’s personal identity and commits a crime that results in financial injury to the victim. Information can include name, bank account number, credit card numbers, Social Security number, and other personal financial data.

Financial identity theft is the most pervasive type of identity theft today and accounts for 28 percent of all identity fraud, impacting millions of Americans each year.

In the United States cost for financial identity theft are estimated at $54 billion annually.
Individuals of ID theft can face devastating repercussions; costing individual victims thousands of dollars and months or years to rectify.

A person can suffer destroyed credit, an inability to acquire loans or additional forms of credit, loss of savings, loss of employment, loss of security, and other unfortunate circumstances.

How Financial Identity Theft Occurs
Many consumer protection agencies note that whether it is due to the ease of access through online resources, or fueled by desperation caused by the current economic climate, financial ID theft is on the rise. Although there has been increased education and public awareness, thieves are having unprecedented success acquiring private information. I am including some of the methods that thieves use to access your private information.

• Theft: Call it old school or low-tech, stolen wallets or purses still make-up 43 percent of identity theft when the “method of access” is known
• Trash: Dumpster-diving thieves rummage through personal and public trashcans looking for sensitive documentation — businesses that fail to properly dispose of private data are also at risk
• Bribery: In far too many cases this method is both the most simple and effective. Thieves entice insiders in an organization to release private information

• Cons: Through phone calls, letters, or emails, many thieves use elaborate schemes designed to trick the victim into revealing personal or account information
• Skimming: Credit card information is swiped through a storage device during transactions, collected, then sold or used for purchases

Cell Phone Financial Identity Theft
In July, Elizabeth Baker, an assistant professor at Wake Forest University and an expert in information system security issues, noted in the Science Daily newsletter that while the cell phone is an amazingly useful device, using it for banking — and consumers are increasingly using mobile phones as banking tools — lead to identity theft and other financial crimes, if reasonable precautions are not taken.

Professor Baker stated, “Often, credit card companies limit your financial responsibility if your card is stolen and fraud is committed. This is not true for your checking and savings bank accounts. Money fraudulently withdrawn can be costly.”

Ms. Baker offered the following tips for protecting oneself from mobile financial theft:

• Never store financial information on your cell phone — logins, passwords, account numbers, Social Security numbers, etc. — not even in a mobile application
• Never text message any financial information from your cell phone
• Lock your phone or have a way to delete the information on your phone remotely
• Check your accounts frequently for suspicious activity

It should be noted that teenagers and young adults are particularly vulnerable to mobile identity theft because they are comfortable sharing information through their cell phones. Professor Barker says that parents need to discuss these dangers with their teens when they open their first bank accounts and monitor their accounts regularly.

How Financial Identity Theft Affects You
Any victim of financial identity theft will attest that recovering from this crime is often an expensive, time consuming process. Before a crime is detected, a thief is capable of running up hundreds to thousands of dollars worth of debt in someone else’s name. While the innocent consumer may not be found liable for one hundred percent of the debt, the consequences are still very damaging.

Financial identity theft can frequently destroy a victim’s credit. This is an issue that can take weeks, months or even years to repair. In the beginning of the act, a victim may be denied loans for mortgages, the opportunity to open a bank account and even turned down for employment.

Agencies to Report Financial Identity Theft
If you have had personal documents or credentials stolen, follow these steps immediately:

• Step 1: File a Report. This report, also known as an Identity Theft Report, is a report made to your local, state, or federal law enforcement agency. Even if the theft occurred in a different country or state, the theft report should be filed with your local police station.

• Step 2: Contact one of the three credit report agencies and ask that they issue a fraud alert and attach notice to your credit report. The three credit bureaus and other agencies:

Equifax 800-525-6285
Esperian 888-397-3742
Trans Union 800-680-7289
Federal Trade Commission 877-438-4338
Social Security Administration (SSA) 800-269-0271
US State Department 877-487-277

Please go to: www.CommodoreEds.com. For more sound investment advice, visit Edwin Stephens’ web site at www.policeone.com/columnists/Edwin-Stephens/. Securities transactions through McClurg Capital Corporation. Member FINRA and SIPC.


About the author

Edwin K. Stephens is the Managing General Partner of The Stephens Group, an investment and asset management firm he founded in January 1993. The Stephens Group helps individuals, pension funds, public agencies, and private corporations with their financial planning needs. The firm’s objective is to provide good sound advice that is in keeping with its philosophy of maximizing profits through conservative fiscal management. Stephens is a licensed Series 6 Registered Representative. He is an Insurance Agent who is licensed in both California and Arizona. Stephens, who has previously authored articles on financial management and investment strategies for the San Francisco Police Officers Association Journal, counts among his clients many law enforcers and other public safety professionals in the San Francisco Bay. Stephens conducts financial planning seminars throughout the San Francisco Bay Area and Arizona. Stephens received a degree in English Literature from San Francisco State University in 1983. Securities transactions though McClurg Capital. Please go to www.CommodoreEds.com.

Contact Edwin Stephens.





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