Identity Theft: Far Worse Than Just Fraudulent Purchases

Most serious damage is the creation of a bogus ID

Many people believe the biggest damage done when an identity is stolen is the loss of funds from fraudulent purchases. But most of the time, these purchases can be traced and fraudulent charges can be removed fairly quickly from an account.

The most serious damage is the creation of a bogus ID, which is subsequently used to apply for loans, claim social security benefits, or file fraudulent federal and state income tax returns for the refund check. A name and social security number is the only requirement on a tax return, and the IRS does not verify the direct deposit bank account or the address where a physical refund check is mailed. These identity theft issues will take months to be resolved.

What can a consumer do?

First, minimize the chances of having your identity stolen.

Second, don’t rely on any retailer’s security system to safeguard against stolen credit/debit card information. According to an Associated Press story on September 18, 2014, Home Depot’s computer security system was breached and 56 million debit and credit card accounts stolen.

Finally, consider purchasing an ID monitoring and protection plan. Most will monitor not only your credit and debit cards but also your social security number for any kind of fraudulent activity.

BenefitPerqs identity theft solutions plan comes bundled legal and tax advice, financial education and credit counseling, and personal counseling.