Identity Theft Insurance
This is not a policy that you can buy like you do car insurance. It is available from several insurance companies as either an endorsement to the Homeowners policy or it is built-in as a part of the policy. This coverage usually pays for the cost you incur cleaning up your credit. That could include long distance phone charges, accounting help, attorney fees and other related expenses, which in some case have been substantial. (The Homeowner policy has coverage for the cost of the stolen goods.)
Associated Press
Published February 19, 2003, 3:54 AM CST
NEW YORK -- An "unauthorized intruder" gained access to some 8 million credit card account numbers -- including Visa, MasterCard and American Express -- by breaching the security of a company that processes transactions for merchants, the card companies said Tuesday.
Visa said that there had been no sign of fraudulent activity involving the accounts and that the card association was monitoring the situation.
Christine Elliott, a spokeswoman for American Express, said that security processes were in place to determine if card numbers were being misused but that "we're not aware of any unusual activity with the affected cards." She said the company would immediately contact card members if any suspicious spending activity is noticed, adding that consumers do not need to research the matter themselves.
MasterCard Inc., which is based in Purchase, N.Y., said it was notified of the breech early this month and that "approximately 8 million account numbers, of which 2.2 million were MasterCard cards, were possibly compromised."
An estimated 3.4 million Visa cards were involved, said Visa USA spokesman John Abrams. American Express declined to give a specific total. It was not immediately clear how many other card issuers were affected.
Visa, MasterCard and American Express have "zero-liability policies" protecting customers from fraudulent uses of their cards.
The above is but one of many breaches of the security of the systems that should be protecting our identity. Last year, Equifax had the unauthorized release of several million credit reports.
What is Identity Theft?
It is when criminals obtain your personal data (such as a credit card number or Social Security number) and use the information to assume your identity. Thieves may take over your existing accounts or use your name to open new accounts, or apply for loans.
Identity theft is currently the fastest growing white collar crime in America.
You may not be aware that your identity has been stolen until a merchant or collection agency contacts you, seeking payment for a bill you know nothing about. Or, you may be declined for a loan or employment because your credit records show defaults on loans unknown to you.
How Do Identity Thieves Get My Personal Information?
While the more elaborate schemes are the ones that often make headlines, most identity thieves still obtain a victim's information through conventional paper means including:
- Lost or stolen wallet, check or credit card,
- "Dumpster-diving," or digging through your trash for statements and other financial information,
- Theft of mail from your mailbox.
Current findings indicate that about 11% of identity theft is traced to online, computer-based crimes. Identity thieves use fraudulent e-mails, a practice known as "phishing", and fraudulent web sites to trick you into revealing personal data online.
How Much Am I at Risk?
It’s estimated that 1 out of every 23 consumers was a victim of identity theft in 2004. 1
To assess your own personal risk of identity theft, click here and take the Identity Theft IQ test.
What Can I Do Can to Reduce My Chances of Becoming a Victim?
Stay Up-to-Date Regarding Your Credit and Financial Information
Order your credit report from each of the three credit reporting bureaus and review it for accuracy. (Note: As a result of a new federal law, consumers can now request a free credit report once each year. For more information, go to www.annualcreditreport.com.)
If you are denied credit or employment, find out why. It could be due to errors on your credit report that you are unaware of.
Review all credit-related bills and statements carefully. Report and challenge any questionable charge regardless of the dollar amount. A small charge could be a first warning sign of a larger problem.
Check Your Own Paper Trail
Go through your wallet. Think about how much information a thief would obtain if it were stolen. Don't carry your ATM, debit cards, or extra credit cards unless you plan to use them. Keep your birth certificate, Social Security card and passport in a safe place at home except when necessary to have them with you (when you travel, for example).
Guard your Social Security number (SSN). Never put your number on checks, or use it as a password online. Only give it out when necessary.
Buy a shredder to destroy personal financial documents that you discard.
Never put outgoing checks, bill payments, or tax documents in your mailbox in front of your home (your mailbox flag helps to alert thieves there may be important information inside!) Drop all items in a postal service mailbox or directly at the post office.
Beware of Bogus Callers
Avoid giving out any confidential information (account numbers, passwords) over the phone to an unsolicited caller who is stating that they represent your financial institution or similar creditor. This person could be anyone. Get their name, location and telephone number, and reason they are calling. Call the person back at the phone number printed on your billing statement.
Don't Get Hooked by Phishing and Other Online Scams*
Wikipedia defines phishing as: In cases of identity theft, criminals obtain your personal data (such as a credit card number or Social Security number) and use the information to assume your identity. Thieves may take over your existing accounts or use your name to open new accounts, or apply for loans.
Learn to recognize fraudulent e-mails and always question those that ask you to verify or provide account information or passwords. Look to the sender for proper identification. An example would be when L. L. Bean sends something to you; it will show the sender as llbean.com. In most cases, reputable companies will not ask for anything that could be used in ID theft. If they do, call them.
If you do online banking or other bill payments, monitor your accounts and balances weekly and report any unusual activity.
Create passwords and PINs that are difficult to guess for all accounts and change them periodically.
Install a firewall on your computer to protect against Internet attacks, as well as reliable anti-virus and anti-spyware programs. I use Microsoft’s AntiSpyware and Ad-Aware.SE Personal. Be sure to keep these programs updated.
What Else Can I Do to Protect Myself?
Most experts agree that even if you take all the right precautions, you may not be able to prevent identity theft from happening - in part because your personal information is not always in your control. Recently, for example, consumers' personal data has been lost or stolen from companies ranging from banks to retailers to personal data vendors.
What you can do is protect yourself with coverage that helps you in the unfortunate event that you do become a victim.
Insurance Can Help
In 1999, Travelers became the first insurer to offer consumers protection against identity theft. Many companies are now offering this coverage as an addition to your policy (endorsement) or a standard part of their policy. This is standard on the Encompass Elite form for up to $20,000..
If you become a victim of identity theft, The travelers program provides you with help from a consumer fraud specialist who can guide you through the process of reclaiming your identity. This protection also reimburses you up to $25,000, with no deductible, for the expenses associated with repairing your damaged credit record.
This coverage can be added as an endorsement to a many Homeowners, Condo, or Renters policy for less than $25 per year.
1 2005 Identity Fraud Survey Report released by the Better Business Bureau and Javelin Strategy & Research.
*See the Federal Trade commission article on phishing titled Phishing Scams published on this web site.
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