Identity theft is the act of taking someone’s personal information and using it to impersonate a victim, steal from bank accounts, establish phony insurance policies, open unauthorized credit cards or obtain unauthorized bank loans. In some more elaborate schemes, criminals use the stolen personal information to get a job, rent a home or take out a mortgage in the victim’s name.

Close to half of identity theft cases are the result of a lost or stolen wallet, checkbook, credit card or other physical document. But as online shopping becomes increasing popular, it can also pose an identity risk.

Victims of identity theft are often left with lower credit scores and spend months or even years getting credit records corrected. They frequently have difficulty getting credit, obtaining loans and even finding employment. Victims of identity theft fraud often travel a long and frustrating road to recovery; depending on the severity of the identity theft fraud damage, the recovery process can take anywhere from a few weeks to several years.

Most homeowners and renters policies provide coverage for theft of money or credit cards; however, the amount of coverage is limited (usually $200 in cash and $50 on credit cards). Once you have reported the loss or theft of your credit card to the issuing company, you are responsible for only $50 of unauthorized use.

Some companies now include coverage for identity theft as part of their homeowners insurance policy. Check your policy to find out. Others sell it as either a stand-alone policy or as an endorsement to a homeowners or renters insurance policy which can run about $25-$50 annually. Identity theft insurance provides reimbursement to crime victims for the cost of restoring their identity and repairing credit reports. It generally covers expenses such as phone bills, lost wages, notary and certified mailing costs, and sometimes attorney fees (with the prior consent of the insurer). Some companies also offer restoration or resolution services that will guide you through the process of recovering your identity.

Use of stolen credit card numbers is among the most common forms of identity theft, but some schemes use electronic means, including online scams like ‘phishing’, in which thieves use email inquiries purporting to be from financial or other online organizations, to obtain sensitive account information. Others might use more old-fashioned methods, such as ‘dumpster ping’—rooting around in people’s garbage to collect financial information.

Many credit card companies are now using radio-frequency identification (RFID) chips in their credit cards instead of magnetic stripes. The advantage is quicker, more efficient transactions, especially those carried out at traditionally cash only retail outlets, such as fast-food restaurants or convenience stores. However radio frequency identification may make it possible, in some cases, for identity thieves to use a simple electronic device to capture the information. The scariest part is that it can happen right in your presence, without you even knowing it.

Tips for Avoiding Identity Theft

• Keep the amount of personal information in your purse or wallet to the bare minimum. Avoid carrying additional credit cards, your social security card or passport unless absolutely necessary.
• Guard your credit card when making purchases. Shield your hand when using ATM machines or making long distance phone calls with phone cards. Don’t fall prey to “shoulder surfers” who may be nearby.
• Always take credit card or ATM receipts. Don’t throw them into public trash containers, leave them on the counter or put them in your shopping bag where they can easily fall out or get stolen.
• Do not give out personal information. Whether on the phone, through the mail or over the Internet, don’t give out any personal information unless you have initiated the contact or are sure you know who you are dealing with and that they have a secure line.

• Proceed with caution when shopping online. Use only authenticated websites to conduct business online. Before submitting personal or financial information through a website, check for the locked padlock image on your browser’s status bar or look for “https://” (rather than http://) in your browser window. If you have any concerns about the authenticity of a Web page, contact the owner of the site to confirm the URL.
• Be aware of phishing and pharming scams. In these scams, criminals use fake emails and websites to impersonate legitimate organizations. Exercise caution when opening emails and instant messages from unknown sources and never give out personal, financial or password related information via email.

• Make sure you have firewall, anti-spyware and anti-virus programs installed on your computer. These programs should always be up to date.

• Monitor your accounts. Don’t rely on your credit card company or bank to alert you of suspicious activity. Carefully monitor your bank and credit card statements to make sure all transactions are accurate. If you suspect a problem, contact your credit card company or bank immediately.
• Order a copy of your credit report from each of the three major credit bureaus. A new law that took effect December 1, 2004, entitles you to one free credit report per year. Your credit report contains information on where you work and live, the credit accounts that have been opened in your name, how you pay your bills and whether you’ve been sued, arrested or filed for bankruptcy. Make sure it’s accurate and includes only those activities you’ve authorized.
• Place passwords on your credit card, bank and phone accounts. Avoid using easily available information like your mother’s maiden name, your birth date, any part of your Social Security number or phone number, or any series of consecutive numbers. If you suspect a problem with your credit card, change your password.
• Shred any documents containing personal information such as credit card numbers, bank statements, charge receipts or credit card applications, before disposing of them.

In order to make it more difficult for identity thieves to open accounts in your name, you can also contact the fraud department of any of the three credit reporting agencies to place a fraud alert on your credit report—by law, the agency you contact is required to contact the other two agencies. The fraud alert tells creditors to contact you before opening any new accounts or making any changes to your existing accounts. The three major credit bureaus are Equifax, TransUnion and Experian.

If you are the victim of a crime, report it to the credit card company and police immediately. Ask for a copy of the police report. You will need it if you want to file an insurance claim or report the crime to the FTC for their assistance. Victims of identity fraud can contact the FTC online or at 877-IDTHEFT.

As a senior citizen or caretaker of an older person, preparing for and protecting against a fire, flood, hurricane or other disaster can be a special challenge.

Many seniors live alone and may have special needs or limited physical mobility, which makes them more vulnerable than younger people when there is disaster. Therefore, it’s all the more important to take steps to prepare for an emergency by evaluating the specific challenges faced by seniors and making an emergency plan to fit their needs.

The following checklist is a helpful tool to help seniors (and those who love and care for them) prepare for a disaster:

1. Make a Medical Plan

• In the event of a disaster, you may not have access to a medical facility or even a drug store. So, if you take medication or receive regular medical treatments—such as dialysis, chemotherapy or even physical therapy—talk to your medical provider about an emergency back-up plan.

• Keep an up-to-date file of your medical history including doctors, prescriptions and dosages, as well as regular medical treatments. Include a copy in your disaster kit. And, make sure that a family member or a good friend has a copy too.

2. Prepare a Disaster Kit

Have the supplies you need on hand in case you have to evacuate or manage on your own for a period after a disaster, including:

• Enough food, water and other supplies to last for at least 72 hours.

• Items necessary for your specific needs, such as eyeglasses, catheters, hearing aid batteries, oxygen, meal replacement shakes, etc.

• Important documents: health insurance cards, Medicare cards, family records, power of attorney, copies of your homeowners and auto insurance policies and contact information for your insurance professional.

• Cash to purchase emergency supplies in the event that power outages prevent the use of credit cards or ATM machines.

• For a full list of disaster supply items, see Ready.gov.

3. Plan for an Evacuation

• Contact your county government or local municipality to find out whether you are in an evacuation zone.

• Locate the nearest official shelter—the American Red Cross or your local government will have this information. If you have a pet, be sure to research shelter pet friendly shelter options.

• If you are physically unable to drive, identify someone who can provide transportation. And, if you have any disabilities, are wheelchair bound or use a walker or cane, build more time into your evacuation plan.

• Create a network of neighbors, relatives, friends and co-workers you can rely on in an emergency. Share your plans with the group and make sure you know how to communicate with each other if a disaster strikes

• Consider using the I.I.I’s Know Your Plan software to plan your evacuation and check out the I.I.I.’s video, the Ten Minute Challenge. Review your plan and practice it regularly.

4. Take Steps to Prepare Your Home

• The Insurance Institute for Business and Home Safety (IBHS) has information on how to make your home better able to withstand a disaster—and don’t be afraid to ask friends and family for help with mitigation tasks.

• Purchase a generator, especially if you rely on electricity for health reasons. And remember, even a simple storm can result in a power outage, so it is important to be prepared any time.

5. Make Sure Your Homeowners Insurance Is Up-to-date

• Continue to insure your home, even if you have paid off your mortgage and homeowners coverage is no longer required by the bank.

• Schedule a time to review your coverage with an insurance professional at least once a year. Children of older parents should consider participating in the review. Some questions to ask your insurance professional:

• Do I have enough coverage to completely rebuild my home?
• Is my Additional Living Expenses (ALE) limit sufficient to cover the extra costs involved in living away from home if my house is being repaired after a disaster?
• What is my deductible; and do I have a separate deductible for hurricanes, hail or earthquakes?

• Keep an up-to-date home inventory—it will make it easier to both purchase the right amount of insurance for your belongings and file a claim. Read How to Create a Home Inventory for more information.

6. Consider Other Coverages

• If you rent your home, renters insurance is inexpensive and will provide coverage for your belongings in the event of a disaster.
• Flood and earthquake are not covered under standard homeowners and renters policies Flood insurance is available from FEMA’s National Flood Insurance Program (NFIP) and from a few private insurance companies. Earthquake coverage is available from private insurance companies and in California is also sold by the California Earthquake Authority.

7. Take Advantage of Resources Available to Seniors

• If you or a loved one live in a group setting, such as an adult living community or assisted living facility, speak with the administrator and find out the specific disaster preparation and evacuation plans the facility has in place.

• FEMA has great resources for seniors at Ready.gov. The AARP, the American Red Cross and the National Organization on Disability all offer resources for older people and those who love and care for them

courtesy of iii.org