In our increasingly digital world, individual’s personal information resides on hundreds, if not thousands, of servers across the globe resulting in a huge rise in identity theft. Defined as “the crime of obtaining the personal or financial information of another person to use their identity to commit fraud or deception, typically for economic gain,” identity theft resulted in losses to consumers totaling over $3.5 billion in 2019 (as reported by the Comparitech Identity Theft Facts and Statistics: 2019-2021 report). The same report noted that approximately 10 percent of Americans have been a victim of identity theft, 21 percent of whom have been victimized more than once.
If you, or someone you know, suspects that your identity has been stolen, here are the steps to follow to report identity theft to authorities and take steps to prevent further damage:
- Contact the federal trade commission at 877-438-4338 or click here to report identity theft and create a recovery plan.
- Contact the social security administration 800-772-1213 or click here to report that your social security number (SSN) may be compromised.
- Consider filing a report with local or state police.
- Contact your financial institution to inform them that you may be a victim of identity theft.
- Contact at least one of the three major credit bureaus to place an alert on your credit reports:
• Equifax: 800-525-6285
• Experian: 888-397-3742
• Transunion: 800-680-7289
With the tax season upon us, be alert that tax-related identity theft can occur when someone uses your stolen social security number to file a tax return and claim a fraudulent refund. You may not be aware that it has happened unless the Internal Revenue Service (IRS) sends you a letter by mail stating they have received a suspicious tax return that uses your SSN, or if you try and electronically file your return and it is rejected as a duplicate. If you know or suspect that you may be a victim of tax-related identity theft, the IRS recommends these additional steps:
- Respond immediately to any IRS notice.
- Complete IRS Form 14039, Identity Theft Affidavit.
- Continue to pay your taxes and file your return, even if you must do so by paper.
- Refer to the IRS Publication 5027 for additional information.
We recommend that all consumers be diligent in protecting their private information by using strong unique passwords; accessing emails, bank accounts, and financial information through a secure network only (no public Wifi); shredding documents with private information that are no longer needed; monitoring your credit report, financial and medical statements; locking your mobile devices, and avoiding providing personally identifying information over the phone.
This material has been prepared for general, informational purposes only and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. Should you require any such advice, please contact us directly. The information contained herein does not create, and your review or use of the information does not constitute an accountant-client relationship.