Your Guide to Avoiding Tax Identity Theft in 2018 and Beyond

The IRS has cracked down on fraudulent tax returns over the past few years, but tax identity theft is still a major problem during the first few months of the year. While tax identity theft isn't always avoidable, there are some steps you can take to greatly reduce the chances of becoming a victim.With that in mind, here's what you need to know about tax identity theft, what you can do to prevent it now and in the future, and what to do if you happen to become a victim.Image Source: Getty Images.What is tax identity theft?There are many possible tax scams that Americans need to watch out for, but few are as troubling as tax identity theft.Tax identity theft occurs when a criminal files a fraudulent return using someone else's Social Security number, with the intention of claiming and receiving a refund. While many tax scams can be easily detected and avoided if you know what to look for, victims of tax identity theft often don't even realize that it's happened until they try to file their tax return. By this time, the thief may have already received the claimed refund, which is generally deposited to a difficult-to-track prepaid credit card.To be clear, the IRS has done an excellent job of cracking down on fraudulent tax returns by implementing safeguards and working with the states and the tax preparation industry. In fact, the 242,000 identity theft claims the IRS received in 2017 represented an impressive 65% decline since 2015.Having said that, while tax identity theft has been more than cut in half, roughly a quarter-million cases of identity theft last year shows that this is still a serious problem.How to not become a tax ID theft victimThe IRS recently issued a warning about identity theft in its newsletter, providing some suggestions on how individual taxpayers, as well as professional tax preparers, can avoid becoming a victim. Here are the agency's suggestions:Always use anti-virus software and make sure whichever program you use can automatically Continue Reading

Freezing your credit after the Equifax breach won’t prevent the most common type of identity theft — here’s what will

Lauren Lyons Cole, provided by Published 8:19 am, Friday, March 2, 2018 Arnd Wiegmann/Reuters The Equifax breach exposed sensitive personal information for nearly 150 million Americans.  A credit freeze protects against new accounts being opened in your name, which happens to 4% of identity-theft victims. However, freezing your credit will not prevent the most common type of identity theft: misuse of current accounts. After the Equifax breach, which exposed sensitive personal information for nearly 150 million Americans, identity-theft horror stories have been easy to come by. Recommended Video: Now Playing: Credit monitoring company Equifax said Thursday the personal information of about 143 million Americans was exposed, making them vulnerable to identity theft. Media: WMUR One solution, according to many experts, is freezing your credit — something hardly anyone has done. Equifax offered consumers the option to freeze their credit for free in the wake of the massive hack, but that benefit will soon expire. Wednesday is the last day to request a free credit freeze from Equifax. Freezing your credit protects against new accounts being opened in your name — one of the rarest types of identity theft out there, affecting only 4% of victims, according to the most recent Bureau of Justice Statistics data. It's not because criminals haven't had access to Social Security numbers before. A 2015 data breach at the health-insurance company Anthem exposed the personal information, including Social Security numbers, of 80 million people. A class-action lawsuit was settled this summer, awarding up to $50 to each person who was affected. Last year, 4.2 billion personal records were stolen. If someone wants your data, it's probably already out there. The vast majority of identity theft victims — 86% in 2014 — have problems with a current account, such as a credit card of bank account, according to BJS data. Freezing Continue Reading

Leave the cheaters in peace: If you poke around the Ashley Madison data, you’re aiding and abetting the hackers

When a person’s confidential data is exposed in violation of a legitimate expectation of privacy, it shouldn’t matter whether that person is a saint or a sinner. A privacy invasion is a privacy invasion — and we must rise to defend the victims, whether we like them or not. Last week, a group of hackers calling themselves the Impact Team made good on last month’s threat to leak the account information of over 32 million members of Avid Life Media’s (ALM) online dating service for married people, Ashley Madison. Some government and celebrity names seem to be included in the list, but for the most part, the email addresses, partial credit card numbers and addresses exposed belong to private individuals. This is not some simple act of anti-establishment mischief. It’s a crime, more than one. Breaking into a company’s password-protected system to steal personal information of 32 million individuals is a federal and state crime. Posting individuals’ financial data and contact information may constitute the crime of aiding and abetting identity theft. Federal and state law enforcement should work on finding and prosecuting the hackers. Our collective responsibility doesn’t stop there, though. Unsurprisingly, people are yielding to their basest urges — and rushing to sort through the stolen ALM data to hunt for embarrassing information. This has been made even easier by people who took the hacked data and created searchable databases and even a customized Google Map of users’ addresses. Some scalps have already been claimed — of a reality TV show star and a Louisiana political operative (who claims to have signed up only to conduct opposition research on potential foes). Everyone gleefully engaging in this as though it’s a sport is in a small way encouraging criminal activity. The first unfortunate result of the pile-on of public shame is the rush to conclusions. Not Continue Reading

Equifax credit hack: The big risks and what to do now

So just how afraid should any of us be about the news of a massive Equifax data breach?Well, how scary is it to realize that the dark web can be stocked with data for sale that includes your Social Security number, birth date, name and address? And in some cases, Equifax noted that some driver's license numbers may have been stolen, too.   This is not your garden variety Target, Home Depot or Wendy's data breach. This is a breach that involves one of the big three credit-reporting firms. The other firms are TransUnion and Experian.  "This information that has been breached has no shelf life," warns Mike Litt, consumer advocate for U.S. PIRG. "All data breaches are not created the same. The types of information determines the risk presented." The immediate risks here? Crooks may be able to open new credit cards using your information — and, naturally, not pay the bills. And some crooks may even have access to the account numbers for some credit cards that you've already opened — so you definitely need to watch your credit card statements. Wonder if your data was hit? Equifax has a website — — that can immediately tell you if you were hit. The site, which had some glitches Thursday night, appeared to be working fine by Friday.  Read more:  You do need to add the last six digits of your Social Security number to the site to get a direct answer online if you've been hit. So you don't want to use public Wi-Fi at the coffee shop to check this one. I checked for my ID information and yep, I've likely been compromised. Equifax has a phone line for consumers to call if they have questions relating to the hacking incident at 866-447-7559. The call center is open every day from 7a.m. to 1 a.m. Eastern time.Frankly, we've all gotten a little too numb when it comes to cyberattacks, data breaches and ID theft. At this point, many of Continue Reading

Identity theft strikes co-founder of Microsoft

Even the billionaire co-founder of Microsoft isn't immune to identity theft, it seems. A simple scheme to defraud Paul Allen, one of the richest men in the world, has landed an AWOL soldier in federal custody, authorities said this week. The case raises basic questions about how safe anyone's information can really be. Federal investigators allege in a complaint unsealed Monday that Brandon Lee Price, 28, changed the address on a bank account held by Allen, then had a debit card sent to his Pittsburgh home to use for payments on a delinquent Armed Forces Bank account and personal expenses. "Clearly, it's a reminder that anyone can be a victim of this," said David Postman, a spokesman for Allen. "It certainly is a surprise and reason for everyone to make sure that all that stuff is properly cared for and monitored." So, how would someone go about stealing the identity of the man who helped start a company that itself was a pioneer in digital security? Price called Citibank in January pretending to be Allen and changed the address on one of Allen's accounts from Seattle to Pittsburgh, then called back three days later to say he had lost his debit card and asked for a new one to be sent to him, an FBI investigator wrote in a criminal complaint filed in February. The card sent to Allen's address was used to attempt a $15,000 Western Union transaction and make a $658.81 payment on the Armed Forces Bank loan account the day it was activated, according to the complaint. Surveillance footage also captured him attempting purchases at a video game store and a dollar store, authorities alleged. The fraud was detected by the bank, which alerted law enforcement officials, Postman said. None of Allen's other accounts was compromised, and the only transaction that apparently made it through was the loan payment, he said. Investigators found Price had been listed since June 2010 as absent without leave from the Army and was wanted as a deserter, authorities Continue Reading

Arrest of couple for identity theft may yield answers in mysterious disappearance of Irina Malezhik

Irina Malezhik, a Russian court translator who often wore her brown hair in a long braid, walked out of her Brooklyn apartment building on Oct. 15, 2007, and vanished. The 47-year-old workaholic was last seen passing a surveillance camera in the lobby around 1 p.m. Authorities don’t even know if she turned left toward Brighton Beach Ave. or right toward the Atlantic Ocean. The feds joined the NYPD on the case because Malezhik worked on investigations involving Medicaid fraud and Russian organized crime. “I would characterize her disappearance as mysterious and suspicious,” said FBI spokesman James Margolin. On the day Malezhik vanished, four checks totaling $6,475 and bearing her forged signature were deposited at a Citibank branch in Coney Island into the joint account of Dmitriy Yakovlev and his wife, Julia, an affidavit filed last week in Brooklyn Federal Court says. The next day, the couple obtained a credit card in Malezhik’s name that was used to make $37,000 in ATM withdrawals and purchases, authorities say. On Oct. 17, a woman matching Julia Yakovlev’s description bought men’s and women’s Franck Muller wristwatches from a Brooklyn jeweler. She showed the jeweler a Social Security card bearing Malezhik’s name and number, authorities said. The Yakovlevs are charged only with stealing Malezhik’s identity, but authorities believe they know a lot more about her mysterious disappearance. Roz Lichtman, who has lived in Malezhik’s building on Corbin Place in Manhattan Beach for more than 40 years, says the only other tenant who made headlines was Eddie Antar, the disgraced founder of Crazy Eddie electronics convicted of massive fraud. “When Eddie Antar moved out, he left his Mercedes in the garage,” Lichtman recalled. Malezhik, 47, emigrated from the Ukraine, where her parents still live. She is a U.S. citizen, single, with no family in New York. Colleagues described Continue Reading

Consumers grow wiser, but identity theft is still a risk

The Federal Trade Commission reports that identity theft is climbing. But San Francisco-based Javelin Strategy & Research says it's declining.Within the past month, both the FTC and the private research organization released information about incidents of ID theft in 2007. According to the FTC, Americans reported 20% more cases of consumer fraud last year than in 2006, with nearly a third of those complaints related to identity theft. The FTC said there were about 810,000 cases of consumer fraud nationwide, including more than 258,000 instances of identity theft, the top complaint for the eighth year in a row. The annual report reflects data collected by the FTC and 125 other organizations, including law enforcement agencies, such as the FBI, and private groups such as the Better Business Bureau. As a result, the FTC explained, it's not the equivalent of a national survey and doesn't necessarily reflect broader trends. Javelin insists its 2008 Identity Fraud Survey Report does. It describes it as "the nation's longest-running study of identity fraud, with more than 19,000 respondents participating during the past four years." CheckFree, a division of Fiserv Inc., Visa Inc. and Wells Fargo & Co. fund the research. Javelin reports that identity fraud is declining in most parts of the United States. The data support earlier findings that criminals obtain most information from stolen personal belongings and through telephone calls, rather than online. Consumers, in general, are becoming less likely to fall for phishing - efforts to steal their personal information online. As a result, ID thieves are migrating away from high-tech methods to low-tech staples like mail and phone calls. Access to personal information through mail and telephone contact grew from 3% of ID theft in 2006 to 40% in 2007, it noted. The bottom line: Whether you are on or off the Internet, protect your personal information. Asa Aarons is an Emmy Award-winning consumer reporter, public Continue Reading

How to avoid identity theft

Most consumers realize Social Security numbers are gold mines for identity thieves and guard them as carefully as cash. "I've done everything I can to keep my Social Security number private," a New York City woman explained. "So I'm annoyed that government agencies include it in public records, often right on their Web sites." Social Security numbers are included in many public records, ranging from property deeds and corporate filings to criminal and civil case files. When federal, state and local agencies digitally image those documents, the same information may end up online. Information once available only during business hours through a personal visit to a courthouse or records room is now available to anyone with Internet access, 24 hours a day. The information is the same, but the accessibility and ease of obtaining it has grown dramatically. In addition to Social Security numbers, the documents may contain other personal information, including signatures. So an identity thief with access to an online image could potentially copy a person's name, address, birth date, SSN - and even an electronic copy of his signature. The challenge is striking a balance between freedom of information and privacy rights. Federal courts banned Social Security numbers from appearing on public documents in 2001. In the past few years, an increasing number of state and local agencies have also barred certain types of information from appearing in government documents. But much of that information remains available in historical records. In December, the National Association of Secretaries of State and the National Electronic Commerce Coordinating Council released recommendations for removing Social Security numbers and other sensitive information from those archived documents. Just last month, Rockland County, N.Y., implemented a new system that protects the private information but still allows online access to historical documents. Expect more government Continue Reading

How to keep your secrets in a world of identity theft

By some estimates, identity theft is declining. The Federal Trade Commission received 215,177 identity theft complaints in 2003, 246,847 in 2004 and 255,565 in 2005. Last year, the number of ID theft complaints fell to 246,035, a drop of about 3.7%. However, for the seventh year in a row, identity theft remains at the top of the FTC's list of consumer complaints. It accounted for 36% of all complaints last year, ahead of traditional problem areas such as shop-at-home or catalogue sales, contests or sweepstakes. The average consumer, however, is less concerned with statistics than preventing identity theft. "It seems basic privacy issues were thrown out the window long ago, with vast amounts of information about almost anyone now available at free or low cost. But are there any methods to block this information without moving out of town with no forwarding address, using only public or prepaid phones and paying for everything in cash - providing you can get your hands on cash and preserve your identity?" asked a man who prefers to be known only as Dave from "somewhere in New Jersey," because "you never know who might read this." Unfortunately, no, without going underground or living in total isolation. In general, the best defense is common sense. Keep your personal information in a secure place at home, especially if you have roommates, employ outside help or are having work done in your house. Use a locking mailbox or route mail to a post office box. Limit what you carry in your wallet. Only carry the identification and credit or debit cards you actually need each day. Each night, remove any bank receipts, invoices or other personal records. Before you throw any of it away, shred it. Avoid discarding personal information at work or in other public places, including hotel rooms. If you must, tear it up and split it up. Put half in one trash can, the rest in another one. Of course, it goes without saying that you have to be equally careful to Continue Reading

Raise fraud alert for peace of mind from identity theft

Judith Washington recently proved she was the victim of identity theft. Dolores Swick is worried she might be a victim. Both consumers want to regain their peace of mind."Last month I discovered nearly $12,000 had been transferred from two Capital One credit cards to my JCPenney MasterCard. Since I don't have any Capitol One cards, I became concerned I was a victim of identify theft. However, the card issuer told me it wasn't identity theft, just fraudulent activity. How can I be sure it isn't identity theft, rather than just a mistake with account numbers?" Swick asked.Err on the side of caution. If there is fraudulent activity on one of your credit card accounts, there is a chance you are a victim of identity theft. Place a fraud alert on your credit files, which will make it harder for a potential ID thief to open credit accounts in your name. You just have to call one of the three major consumer reporting agencies: Equifax, (800) 525-6285; Experian, (888)-EXPERIAN (397-3742) or TransUnion, (800) 680-7289. The company you call is required to notify the other two on your behalf.The credit bureaus will each mail you a notice of your rights as an identity theft victim. Once you receive this information, you can contact each of the three bureaus to request a free copy of your credit report. That way, you can check all your accounts for suspicious activity.And that brings me back to Washington. "To make a long story short, I proved I was a victim of identity theft. I went online to see if I could receive a copy of my credit reports to make sure the fraudulent account had been deleted. But I already received my free annual credit report," she explained. "How do I obtain copies of my reports since without incurring charges?"Just ask. Because you're a victim of identity theft, you're entitled to a free copy of your credit report from each credit reporting agency. This is in addition to the free copy you're entitled to each year by federal law.Asa Aarons is a Continue Reading