Dear Readers —
Back in March I wrote a two-part column about the growing problem of identity theft and the steps you can take to protect yourself (here and here).

Ironically, shortly afterwards I started to have a series of (possibly) unrelated “issues” regard to my personal credit record. I thought I’d share these with you so that we can all learn from them. I promise to update you as new developments occur.

The first hint that something wasn’t right was when I received a polite letter informing me that I was being turned down for a credit card at a major department store. Problem is, I had never applied for a credit card with that retailer! And, if I had, I don’t know of any reason(s) I would be rejected.

This was “both good news and bad news,” according to Betsy Broder, the attorney at the Federal Trade Commission who heads up the agency’s effort to combat identity theft. “The ‘good’ news is they didn’t issue the other person a credit card,” she said. “The bad news is this is clearly a red flag” that someone was attempting to use my identity to fraudulently obtain credit.

I immediately contacted Equifax, the credit reporting agency that sent the letter on behalf of the store, and filed a “fraud alert.” The form letter I received back from Equifax acknowledged receipt of my request, said it would stay in my file for 90 days, and that Equifax would notify the other two credit agencies, TransUnion and Experian.

The letter also explained some of the basic rights consumers have under the Fair Credit Reporting Act, including the right to a free copy of my credit file, provided I requested this within 90 days.

Confession: I got busy. The letter got buried under a mountain of unrelated paperwork. I figured the fraud alert would handle it. The deadline passed.

Thanks to an amendment to the Fair Credit Reporting Act (search), residents of three-fourths of the country are now entitled to request a free copy of their credit report from the three credit bureaus once every 12 months. However, this program is in the process of being phased in, starting from the west coast. Because I live in the northeast- the last area of the country to receive this privilege — it won’t be available in my area until Sept. 1. (See below to find out how to order your credit report.)

What I should have done according to attorney Steve Weisman, author of “50 Ways to Protect your Identity and Your Credit:”

1) Contact the other two credit reporting agencies myself in writing, and

2) Contact the department store, letting them know I had not applied for a credit card and requesting information about the application.

“A fraud alert is the best you can do,” says Weisman. (Note: residents of California can “freeze” their credit files, preventing any new accounts from being opened unless a fee is paid.) Broder explains that when a 90-day fraud alert is placed in your file, a creditor “has to take reasonable measures to determine that you are you.” But, according to Weisman, this doesn’t stop them from opening the account.

If you are concerned you are the victim of identity theft and want to take more permanent steps to protect yourself, Broder says you can put a seven-year fraud alert in your credit file. Complete the affidavit on the FTC’s website http://www.consumer.gov/idtheft/ and submit this to each of the credit reporting companies.

Despite the fact that major breaches of credit card data seem to be occurring with increasing frequency, Congress hasn’t gotten its act together, even though members of Congress were among the 1.2 million federal employees whose account information was “misplaced” by BankAmerica earlier this year. A flurry of bills aimed at increasing consumer protection against identity theft have been introduced in both the House and Senate, but don’t hold your breath about anything passing soon. Or, for that matter, by the end of this year.

“It’s unconscionable,” says Weisman. “There’s an international black market in credit card data. Account numbers issued to Americans are being sold on the Internet and turning up as purchases in Japan.”

In the meantime, a number of states are following California’s lead and taking matters into their own hands by mandating credit issuers take certain steps — such as notifying consumers — when their data is breached.

Next, about a month after the letter from the department store, I received an urgent (!) email (supposedly) from “Union Planters Bank.” It ominously stated that my account “may have been accessed by an unauthorized third party” and instructed me “Click on the link below” to verify the information on my credit card.

I didn’t. I deleted this message (which didn’t stop several more from being sent). For starters, I have never had an account at “Union Planters Bank,” which is primarily located in the southeastern U.S.

But even if I were a customer of the bank, I would have deleted a message like this. And so should you. No reputable financial institution contacts you by email asking for confidential information over the Internet. It’s a scam called “phishing” and is designed to elicit sensitive personal information such as your Social Security and credit card numbers.

Phishing “attacks” are becoming more prevalent because, according to the FTC’s Broder, people are getting smart. As a result, “it takes more contacts to get people hooked.” PayPal, the on-line bill paying service, was another recent target of phishers.

Phishers are clever and persistent. They will set up official-looking websites complete with company logos to make you feel comfortable about revealing the information they’re looking for. Just because Union Planters merged with Regions Financial a year ago and doesn’t even have a functioning Web site anymore didn’t stop them from establishing a phony one.

Phishing has been a problem in the financial services industry for some time. According to a survey released in May by First Data Corporation, more than 43 percent of adults have been phished — either by phone or email. Regions Financial spokesperson Christie LaMont said studies indicate only about 5 percent of those who are phished actually take the bait. Still, she said, “Those are the ones we worry about.”

For good reason. The First Data survey found that nearly half the people who responded to a phishing contact found themselves the victim of identity theft.

If you believe you’ve been a victim of identity theft of any kind, file a report with the Federal Trade Commission. If you were specifically taken in by any of the Union Planters phishing emails, check out the bank’s home page at http://www.regions.com

Last, but not least, I recently received a credit card bill from a major bank headquartered in New York proclaiming that my “New Balance” was $96.82. Hmm. I closed that account last fall. Even dug out the letter I’d written instructing the bank to cancel my account. I’m still impressed that I actually had a copy of this, but the real lesson is how important it is to put your instructions in writing when it comes to credit issues. And, of course, keep a copy.

The “charges” included $39.99 for something cryptically labeled “HomeProtect,” plus $15.00 for not making any payment the previous month... on an account I had closed.

Now I have a clue as to why I have a negative mark in my credit file.

This is an easier situation to handle, according to Weisman. I fired off a letter to the bank stating that my credit card account was closed 9 months ago, that I did not authorize any charges, and demanding that no negative remarks be made in my credit file for late payments.

One more thing. “Tell them if they don’t respond in ten business days you’re going to take action under the “Unfair and Deceptive Trade Practices Act (search),” advises Weisman. “And send your letter via certified mail.”

I’ll keep you posted. In the meantime, I figure I’m in good company. Deborah Platt Majoras was just notified that she is among the 1.4 million customers of DSW, Inc. whose credit card information was stolen from a company database in March. This time they picked on the wrong victim: she’s the Chairman of the Federal Trade Commission.

Keep the faith,

Gail

To Order A Free Copy of Your Credit Report:

It’s simple to obtain your annual free credit report. The three credit bureaus have set up a website: http://www.annualcreditreport.com

If you prefer to do this by mail, call 1-877-322-8228 and ask for the Annual Credit Report Request Form. When you receive it, fill it out and send it in.

Do not contact the credit reporting companies individually.

This service is currently available to all U.S. residents except those living in the northeast. Unless you believe you are a victim of identity theft (which entitles you to a free report no matter where you live and sooner than once every 12 months), residents living in the following states/areas have to wait until Sept. 1 for a free annual credit report: Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, Vermont, Virginia, West Virginia, the District of Columbia, Puerto Rico, and all U.S. territories.

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The views expressed in this article are those of Ms. Buckner or the individual commentator. You should consult your own financial adviser for advice regarding your particular financial circumstances. This article is for information only and is not an offer of the sale of any mutual fund or other investment.