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Tuesday, February 17, 2009

Identity Theft: How it Affected my Family, and How we Stopped it from Happening Again

Identity TheftYou've probably heard about identity theft, and the ways that the unscrupulous can use our personal information . It wasn't an issue for our family, because we thought we were being careful with our personally identifiable information. I guess we weren't being careful enough, though, because someone used my husband's name, birth date and Social Security number to open a PayPal Buyer Credit account. He was unaware until he started receiving collection notices in the mail.

If you haven't heard of it, PayPal Buyer Credit enables a PayPal account holder to buy now, and make monthly payments. I found out these facts about the service:

  • PayPal Buyer Credit is a credit line charging a variable APR. (Equal to prime rate plus 15.5%, but not less than 20.8%.)

  • If you make a late payment, a fee of $15-$35 applies. That can get expensive, fast.

  • You will receive a paper statement in the mail, and the grace period to pay charges can be up to 26 days.

  • You can only pay your Buyer Credit bill by check, or through linking your bank account.

  • Once you enroll in the program, it will become your default funding source, if you don't have a PayPal balance or a linked bank account.

  • PayPal and Buyer Credit are two separate programs. That means if you close your PayPal account, your Buyer Credit account is still open.

He received his first collection notice back in March of last year. According to the statement, he owed over $1500. Strange, since he had never heard of PayPal Buyer Credit, and had certainly never opened an account with them. He immediately called the toll-free number on the Buyer Credit website, and after waiting what seemed like an hour, he finally got through to a real person. He was told that interest and finance charges had been accruing on the account for six months. My husband told the company that he was not the one who had opened the account, and was told that without solid proof of that fact, he'd still be responsible for the entire amount owed.

He didn't know how someone had gained access to his personal information. We always shred all our bank statements, credit card offers, and any other such mail. I guess some enterprising soul with a lot of time on their hands went through our trash, or intercepted some of our mail when it was still in the mailbox. It's also entirely possible that a keylogger or Trojan on our home PC could have allowed a criminal access to that information. He's still trying to clear his name, and clear the blemish from his credit report. Here are some steps that we have taken to clear up this fiasco:

  • We've documented all communication and actions with the company that's trying to collect debts that we don't owe.

  • We limit further disclosure of personal information. He told the bank, credit card companies, and any other entity that he does business with that he wants to "opt out" of programs that share personal info.

  • I changed all our online account passwords.

  • We've updated the virus definition files of our virus software, and we are in the process of scanning all our computers and external hard drives.

  • He filed a police report concerning the incident.

After about six months of wrangling, he finally got the mess sorted out. PayPal Buyer Credit finally understood that he in fact did not authorize the charges made under his name, so they closed the fraudulent account and absolved him of any responsibility for the money owed. The entire situation left him mistrustful and frustrated, and I don't blame him at all. It's all too easy for someone to steal another person's identity, but extremely hard for the victim to clear their good name. Unfortunately, identity theft victims are usually "guilty until proven innocent".

I convinced him to sign up for LifeLock identity theft protection service, and it has been very effective. The company placed fraud alerts on his credit reports, which are renewed every ninety days. They also requested that his name be removed from lists for pre-approved credit card offers. He hasn't received one since! This service is well worth the price, and my husband and I wholeheartedly recommend it.

There's nothing like the sinking feeling that you get in the pit of your stomach when you realize that your identity has been stolen, and I wouldn't wish it on anyone. But, in case it ever happens to you, the tips I've outlined here can help reclaim your identity.

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