I Got Stung!
I was a bit apprehensive to share this, but as I mentioned to my insiders last week, I recently became the victim of identity theft. I finally realize this story is too important NOT to share.
Has Someone Stolen From You?
If you’ve lived long enough, you’ve probably been the victim of theft at some point in your life, right?
Whether it’s getting pickpocketed while traveling, your house broken into, or having your wallet/purse stolen, it’s NOT a great feeling.
As a victim, you may feel a sense of loss, a sense of unease that you’ve been violated in some way and an entire range of emotions from shock to anger.
Oh yeah, let’s not forget FRUSTRATION! (Something I’m experiencing currently… stay tuned)
Theft is Evolving
In the digital age, theft is evolving. Chances are you’ve probably had a credit card number stolen from your before, and if you haven’t, you probably will someday. The security controls simply aren’t in place yet… at least in America.
My former IT company actually helped vendors become PCI Compliant (best practices to protect consumer credit card data). The problem isn’t with these vendors, it’s the millions of other vendors that haven’t followed suit. Even then, PCI Compliant companies are still getting breached by determined hackers (eg. Healthcare Providers, etc.).
Sadly, there is only so much you can do to prevent your personal data from being leaked (unless you hide underneath a rock). But for the majority of people like you and me, we like to live in an active and dynamic society. Identity theft then is, unfortunately, a way of life and these cyber crimes are rampant.
I was pretty happy a couple of weeks ago. My CPA told me we were just about done with our taxes and should expect a sizable refund for 2015 soon. All I had to do was to submit the final K1s from our RealtyShares investments and we’d be golden. I got the K1s several days before the deadline and all that needed to happen was to submit the returns electronically.
“Hey, I filed your taxes last night, but it came back as rejected. I tried it again, and it’s coming up with the same error,” he explained. “What error? I thought e-filing was a pretty simple process?” I replied. “Well, it’s telling me that someone has already filed a tax return under your social security number,” my CPA claimed.
“You’ve got to be kidding me!” I thought. “Did someone actually have the audacity to use my SSN!! WTF!”
Want to know something crazy? Between the years of 2011 and 2014, the IRS halted $63B worth of fraudulent tax refunds. That’s insane!!
What Do We Do Now?
After the initial shock and annoyance settled in, I started to think more resourcefully. I worked with my CPA to figure out the procedure to follow once someone uses your SSN to file a false return in your name.
Basically, because we couldn’t e-file our taxes, we had to print out the return and mail it in the old fashion way (brings back memories!). Along with the return, I had to submit an ID verification affidavit (IRS Form 14039) to show proof of my identity.
To be on the safe side, we also filled out the form for my wife too since she’s on the return jointly. You have the option of submitting a copy of your social security card, driver’s license, or passport. We selected two methods and attached them on top of the return.
Great, Now You Tell Me
Ironically, after mailing out the return that Saturday morning, I actually received a letter from the IRS (LTR 5071C) later that afternoon. It essentially was letting me know that a return had already been filed under my social security number (SSN) and to confirm its accuracy.
So, the IRS caught wind of this scam and didn’t process anything yet. That’s the good news.
The bad news is that I’m losing hours and hours of time I hadn’t planned for. I also wasn’t able to use their verify website. So, my only choice was to call their ID hotline. Although it mentioned high call volume, I was able to get through to an agent within 7 minutes… better than I was expecting. Anyhow, the IRS agent I spoke with asked me for my social security number, name, date of birth, address, and details from last years taxes. Finally, I had to answer a series of credit agency generated questions.
The entire process lasted about 15 minutes from the time I started in on the questions. To ensure that they knew which return was actually mine, I had to verify some data on the new return. The agent told me it can take up to 190 days to process before settling my 2015 return.
Arghh… that’s over 4 months! I wouldn’t be that perturbed, except that we have a rather large refund due this year.
Apparently I should expect some confirmation of documents back from the IRS once they verify my ID further and it will have additional instructions on how to secure my identity.
Time to Move On
Well, such is life, right? In the end, this is a valuable lesson not only for me but for everyone reading this. You see, I have been incredibly protective of my financial identity – specifically my SSN (and always have been). The problem is that other organizations that have my information are getting breached left and right. And well, there’s not much I could have done to prevent it. However, there are things I can do now and continue to do to minimize the impact of this invasion of privacy.
The Best Offense is a Good Defense!
So here’s what I’m doing to keep these would-be thieves at bay…
- Step 1: Notify IRS by Filing Form 14039
- Step 2: Place a Fraud Alert with A Major Credit Scoring Bureau
- (i.e. Transunion, Experian, Equifax)
- Step 3: Continue Using 2-Factor Authentication & Complex Passwords
- Step 4: Continue to Encrypt Documents with My Social Security Number
- Step 5: Shred Old Documents That Contain Personally Identifiable Information
- Step 6: Consider Investing in Identity Theft Protection Service*
- * (as recommended by my readers)
Although my financial identity was compromised and used without my permission, it appears that these would-be thieves were stopped cold in their tracks (for now). This is thanks in part to the IRS’s increased security protocols, and also my own proactive actions above and also consistently monitoring my credit score and other financial benchmarks.
Check out my previous post on cyber pickpockets.
Thankfully it appears that all of my accounts are intact and my financial records look accurate. This, of course, is an added benefit of tracking your finances through sites such as Credit Karma (free credit scores & monitoring) and Personal Capital (free cash flow & net worth monitoring).
However, should I find certain accounts out-of-place after the initial fraud hold is lifted, I can submit and extended hold for up to 7 years by filing a police report, and by taking several other measures. For the most up to date information from the FTC, check out www.identitytheft.gov.
Who Has Your Information?
Life is too short to always be looking over your back, but it may be prudent to install a rear view mirror. Remember, part of being financially alert is becoming proactive with your own finances so that they serve you and not someone else.
Want to know something scary? Someone likely has your information too. Whether or not it gets used is anyone’s guess. But, I’d rather you not wait and find out the hard way. Stay safe friends!
Readers, what do you do to protect your identity and financial data from cyber thieves? Have you ever been a victim?
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