|
Farm Focus: Identity Theft Continues to Increase
By Matt Keating
Identity theft was a frequent topic of discussion during lunch and dinner breaks recently at the NAMIC Management School in Bloomington, Ill. Many farm mutual managers fear the problem will only continue to grow worse.
“It’s a major problem that isn’t going to go away soon,” said Thomas Ball, vice president of Finger Lakes Fire & Casualty Co., Trumansburg, N.Y. “Customers worry that they are vulnerable to their personal information falling into the wrong hands. Computer hackers are easily finding ways to get credit card and social security numbers.”
Identity theft is growing instead of decreasing, according to the Identity Theft Resource Center, and companies’ consumers are being asked to be more cautious with their transactions.
Identity theft happens when criminals take on the identity of a consumer for the purpose of obtaining and using credit in the name of the victim. Fraudulent financial gain is the goal. The stolen identity, in many instances, is also used to commit crimes, leaving the victim with a criminal record.
“It’s the innocent customers that get taken for a ride,” Ball said. “It can take them a long time to restore their credit history to where it was before.”
Ball said a victim is usually alerted to an identity theft when a merchant – or a collection agency – wants payment for a bill that the victim was not aware of. Or, even worse, the individual may be declined for a loan due to a bad credit report showing defaults on loans unknown to the victim. Other indications of identity theft, according to the Federal Trade Commission (FTC), include:
- Failing to receive bills or other mail, which may signal an address change by the identity thief.
- Receiving credit cards for which you did not apply.
- Receiving calls or letters from debt collectors or businesses about merchandise or services you did not buy.
In 1998, credit-reporting agency Trans Union received 554,450 calls with questions or complaints about identity theft. In its September 2003 report, the FTC reported that 9.9 million people were victims in the previous 12 months.
The FTC also reported that the previous year’s identity theft losses to businesses and financial institutions totaled nearly $48 billion.
“The amount of paperwork and time and money involved to fix these problems is staggering,” said Ronald E. Wiebusch, secretary/treasurer for Randolph Mutual Insurance Co., Steelville, Ill. “In a lot of these cases, it’s the creditors that end up eating most of the losses.”
And the victims are often left with ruined credit histories that can require hundreds of hours and significant expense to clear and restore.
“Farm mutual companies are just as vulnerable as anyone else,” said William R. Barker, manager of underwriting for Shelter Insurance Companies, Columbia, Mo. “Credit card numbers and other personal information in files can be stolen in the blink of an eye and it’s the victim left paying the bill.”
In its study released in September 2003, the Identity Theft Resource Center reported victims spent an average of $1,495 in out-of-pocket expenses and 609 hours to fully recover from identity theft.
Some farm mutual insurance companies already have steps in place to combat the problem.
“We have coverage for credit card forgery or theft,” said April Compton, secretary/treasurer of Mid-State Farmers Mutual Insurance Co., New Haven, Ind. “We also have incidental coverage where we pay for any unauthorized use of a credit card.”
Compton said consumers need to be careful who they give personal information to, particularly credit card information.
Ball recommends that people should order credit reports annually from credit reporting bureaus and review them for accuracy. Any inaccuracies should be reported immediately.
The FTC advises people to guard their social security numbers. They advise consumers to never put their social security numbers on checks or use them, or any part of them, as passwords at work or anywhere else; only give them out as an absolute necessity.
The FTC also advises companies and consumers to consider buying shredders to adequately destroy personal financial documents that they are throwing out. So-called "dumpster diving" is a way for criminals to obtain information about consumers.
“Most individuals are under the belief that their bank or credit card company will bear the burden of an identity theft loss with no personal consequences, They should be aware, however, that they will not be reimbursed for the hundreds of hours and thousands of dollars in out-of-pocket expenses they may incur to reestablish their credit and clear their name,” said Scott St. Clair, business development manager, NAMIC Insurance Agency (NIA).
“Identify theft coverage is available through NIA to cover unreimbursed expenses associated with clearing your name in the event of identity theft,” he added.
Identity theft coverage is inexpensive and provides for out of pocket expenses such as:
- Lost wages as a result of time taken off from work to deal with the fraud – including wrongful incarcerations – up to $500 per week for four weeks.
- Notary and certified mailing charges for completing and delivering fraud affidavits or similar documents.
- Fees to re-apply for loans that were denied for erroneous credit information due to identify theft.
- Long distance telephone charges for calling merchants, law enforcement agencies or credit grantors to discuss an identify theft.
- Attorney fees incurred, with prior consent, for defending suits brought incorrectly by merchants or their collection agencies.
- Removing criminal or civil judgments wrongly entered against the victim.
- Challenging information in a credit report.
|
