1. Identity Theft

2. Disclaimer
The purpose of this presentation is to help you better understand fraud and identity theft and to provide general information about Experian’s fraud victim assistance. For legal reasons, I:
cannot discuss issues specific to your personal credit report
cannot advise individuals about how to improve their personal credit report or credit scores
cannot submit disputes regarding your personal credit report on your behalf
Information regarding Experian policies and processes is current as of the date of this presentation but may change.

3. Identity theft What is it? What should a victim do?
How Experian can help

4. Defining identity theft A broad term often used to describe many categories of fraud
Government documents/benefits fraud (19% of FTC Consumer Sentinel complaints)
Stolen account numbers/credit card fraud (15%)
New account fraud
Check fraud
Insurance fraud
Financial schemes
Unauthorized access to credit data
Fraudulent and inaccurate data contribution
Creation of fictitious credit files or credit report ID information
Credit clinic activity
Drivers license or other false identity cards
When people talk about identity theft, they often lump in all sorts of fraud.
Government documents/benefits fraud was the most reported type of identity theft reported to the Federal Trade Commission’s Consumer Sentinel Network, accounting for 19% of the complaints filed. It includes tax or wage related fraud, government benefits applied for or received, driver's license issued or forged, and any other government documents issued or forged.
Many other kinds of fraud begin with the theft of a person’s identity, but do not involve a credit report. Check fraud, benefits fraud, payday loan fraud and online auction fraud are examples.
Even when someone steals your account number they aren’t stealing your identity, and a credit report will not be accessed. They just want to make purchases and disappear with the goods, leaving you to dispute the charges with your creditor. This type of credit card fraud was the second most reported type of identity theft accounting for 15% of the complaints entered submitted to the Consumer Sentinel Network.

5. Identity theft is up. . . It’s down. . . It’s up again
Bureau of Justice:
31% increase in credit card theft
37% increase in the # of households who experienced multiple types of ID theft during same episode
Javelin Strategy and Research:
12% increase in # of identity theft victims in (11.1 million adults)
FTC 2009 report on identity theft complaints:
# of identity theft complaints decreased from but increased from 2007 numbers.
The Bureau of Justice states approx 8.6 million people were victims in Javelin reported the number of victims in 2010 to be 8.1 million.
There are many different measures of the extent of ID Theft. It is difficult to get current and consistent data. For example, one survey includes victims 12 and above. Another includes only those over the age of 18. Also, some don’t differentiate between successful and unsuccessful attempts. Having a wallet stolen may prompt a consumer to file a fraud report, but it may have nothing to do with stealing their identity, only their cash.
But, if someone is a victim, the statistics don’t really matter.

6. Some good news about identity theft!
In 2010 the number of identity fraud victims decreased by 28% to 8.1 million adults
Overall dollar losses caused by fraud are decreasing:
Total annual fraud decreased from $56 billion to $37 billion in 2010
The mean fraud amount per victim declined from $4,991 in 2009 to $4,607
Bad news about fraud is everywhere, but there is actually good news that you might not hear.
Javelin’s research shows a 28% decrease in victims, and consumer cost dropped sharply.
According to Javelin, some of the decrease in dollar cost to victims is the result of financial institutions bearing more of the loss, such as a 100% fraud guarantee for debit cards.

7. Why is fraud decreasing?
Increased reporting, resulting in more criminals being caught
Increased consumer education and awareness of fraud tactics
Creditors are using fraud prevention tools effectively
In addition to greater visibility through new reporting systems, state laws against fraud have been strengthened, giving law enforcement more weapons.
Consumers are more likely to recognize fraud schemes, monitor their accounts and credit reports, and activate electronic alerts.
Also, the credit reporting companies and the lenders have developed new services to detect application fraud and make it easier for consumers to resolve the situation once detected.
Experian is a leading provider of fraud detection, prevention and recovery services for both businesses and consumers.

8. How do criminals obtain your identifying information?
Lost or stolen credit cards
Mail theft
Shoulder surfing
Dumpster diving
Unsolicited
Pretext calling
Personnel records
Skimmers
Data breaches
Stolen computers
Breaking into parked cars
Relatives/friends
You often read about data breaches, and a good deal of legislation has been passed as a result, but fraud resulting from data breaches is in fact quite rare. Some statistics about data breaches:
The percentage of consumers who go on to suffer a fraud as a result of a data breach is only 0.8%, or 8 out of every 1000
Data breaches generate only 6% of ID Theft
According to the Better Business Bureau, “The truth…is that most ‘garden variety’ identity theft doesn't involve cyberspace. Today, most identity thieves still rely on tried-and-true methods to get their hands on your paper records - real documents that can serve as the basis for their dirty work.”
You are in fact at greater risk of identity theft as a result of dumpster diving or a relative stealing your account numbers than you are as the result of a of data breach.

9. Protecting yourself from fraud
You can do everything right and still be victimized
However, there are a number of common sense things you can do to minimize your risk:
Shred documents before putting in the trash
Provide Social Security number only when necessary
Don’t carry unnecessary information in a purse or wallet
Don’t leave your purse, wallet or other identifying information in your car while shopping
Knowing how to help protect yourself from fraud is important. Unfortunately, many times victims of fraud and identity theft have done nothing wrong. Organized crime rings, documents stolen from dumpsters, computer hacking and computer hardware theft are beyond the control of consumers.
Often, access to Social Security numbers is blamed for ID theft, and proposals are made by lawmakers to restrict access to SSNs as an identity theft solution. Unfortunately, doing so could increase the prevalence of ID theft, not reduce the crime.
In credit reporting, the SSN is critical for accuracy and security of the information in a person’s credit report. If Experian could not use the SSN, it would be far more difficult to maintain the accuracy of the report and to ensure only the true subject of the report had access to it, not an identity thief.
If the SSN is not used as part of the required identifying information, all a criminal would need would be your name and address to get your credit report. That information is available through the telephone book or a simple online search.
Although there are situations where there may be nothing you can do to prevent the crime, there are a number of common sense things you can do to minimize your risk of identity theft. The key is to minimize inappropriate exposure of all of your personally identifying information and account numbers.

10. Protecting yourself from fraud
Conduct only secure transactions online (
Don’t respond to unsolicited s requesting personal information
Don’t share personal information on social networking Internet sites
Log off when finished on a site
Don’t give identifying information over the phone unless you initiated the call
Our increasing interaction by telephone and especially online poses additional challenges.
Minimizing access to personally identifying information and ensuring online activities are safe is becoming increasingly difficult. But, like life in the paper world, there are some simple steps you can do to protect yourself from cyber-fraud.
Only conduct transactions on secured sites. If the website address does not start with “https” don’t share any information.
Never respond to unsolicited s, particularly if they request personal identification or sensitive information such as account number or your Social Security number.
While it is very tempting, don’t share any personal information on social networking sites.
And, don’t give identifying information over the telephone unless you initiated the call.

11. The role of credit reports in new account fraud
Credit reports are accessed only when the identity thief uses stolen identifying information to apply for credit
Credit reporting can help you discover and recover from new account credit fraud
Credit reporting often prevents new account fraud by helping lenders identify fraudulent applications
Credit reporting companies have no connection to identity theft unless the identity thief applies for new credit and the application information is used to request a credit report from Experian.
Experian has developed fraud detection and prevention services that help creditors reduce the incidence of new account fraud. The services alert creditors to elements that indicate high fraud risk or that are associated with known fraudulent activity, enabling them to stop the application process so that they can verify the identity of the applicant or take other appropriate action.

12. Experian’s fraud prevention tools
Lenders utilize a number of tools from Experian to identify and stop fraudulent applications:
Authentication Services
Fraud ShieldSM
National Fraud Database
Precise IDSM
HunterSM
Authentication Services enable online identity verification for secure transactions using “out of wallet” information.
Fraud Shield provides alerts to lenders when indicators of high fraud risk appear in the credit report, such as address and Social Security number variations.
Precise IDSM combines a number of tools including Experian’s National Fraud Database, an FCRA compliant database of known fraud, and Knowledge IQ, which uses challenge-response question technology to identify potential fraud.
Hunter is a shared application anomaly detection platform that “hunts for the bad guys” by comparing data from multiple sources such as credit applications and compares it to credit report data.

13. How can you discover new account fraud?
Review your credit report annually
Have an application declined by a lender
Receive calls from unknown creditors or collection agencies
Subscribe to a credit monitoring service
Everyone should check their credit reports at least once a year. It’s free, and can be one of the best ways of discovering new credit account fraud. It’s better to discover a potential fraud problem through an alert than by receiving a declination notice from a creditor because your credit report has been damaged by fraud.
In many cases, you will discover fraud first because you get a billing statement from a company with which you have never done business.
Calls from collection agencies and creditors might also be an unwelcome alert that you are an identity theft victim.
To be alerted of potential fraud quickly, you might consider subscribing to a credit monitoring service, like Experian’s ProtectMyID.com.

14. Take immediate action Four key stepsü
Notify law enforcement
Make an online report with the Federal Trade Commission at
Contact credit reporting companies
Contact sources reporting fraudulent information
If you do become a victim, it is very important to contact law enforcement to file a police report, the FTC to file a fraud report, and the creditors who have also been victimized by the fraudsters to complete affidavits.
Because an identity theft report is required for many of the credit report consumer assistance services, this step is very important for real victims, as you will see as we discuss the assistance process.

15. Do you think you may be a victim? Add an Initial Security Alert
Contact any one of three credit reporting companies online or through automated telephone system
Request an initial security alert
Asks lenders to take additional precautions before granting credit
Can include an unverified telephone number
Automatically deleted after 90 days
The first step in receiving fraud assistance is adding a temporary security alert to your credit report. With just one contact an initial consumer alert will be added to the credit reports provided by each of the national credit reporting companies.

16. Initial Security Alert
You are automatically opted-out of prescreened credit offer lists for six months
You can request a free credit report
Fraud recovery and assistance information is provided
Request for the alert is shared with the other national credit reporting companies
When you add an initial security alert Experian automatically removes your name from prescreened mailing lists for six months.
You also can request a free copy of your credit report and will receive specialized fraud recovery information and assistance.
Experian shares the alert with the other national credit reporting companies, Trans Union and Equifax. Each will add the alert and offer you a free copy of your report for review.

17. Found evidence of fraud in your credit report? Next steps
Initiate investigation through Experian with the information source
Consumer reporting company provides source contact information
You should contact source directly as well
Source may require completion of fraud affidavit or other documentation as part of investigation
It is important for you to understand that you don’t want to just “fix” your credit report. You need to make sure the account information is accurate with the company that holds the account and reports it to the credit reporting companies.
When fraud is involved, often the best way to correct the reporting company’s records is to contact the creditor directly to see what documentation they need or if additional information can be provided to help them clear up their records and investigate the fraud.

18. Next step Add a seven-year victim statement
Extended fraud victim statement can be added
You must provide identity theft report
Asks lenders to call before granting credit
Shared with other national credit reporting companies
Automatically deleted after seven years
Two additional reports may be requested free of charge within 12 months to monitor for fraudulent activity
If fraud is confirmed, the next step is to add an extended fraud victim statement, which remains for seven years or until removal is requested in writing with proof documentation and identification.
Additional reports also are available to help bring peace of mind that there has been no additional activity.
Note: some state laws allow for more than two reports after adding the victim statement. California, for example, allows the consumer to request one additional report each month for 12 months.

19. Summary Experian’s fraud alerts
Initial security alert
Reason to believe you might be a fraud victim
Alerts creditors that you may have been victimized
Remains 90 days
Extended fraud victim alert
You may submit a valid identity theft report and add an extended alert to warn creditors that you have been victimized
May include two telephone numbers
Remains seven years
The initial alert can be added immediately online and a free report requested. That gives you an opportunity to check for evidence of fraud.
The extended alert should be added only if you are an actual victim. Doing so requires a police report or valid ID theft report.
Because creditors are required to take additional precautions in checking identity, it often takes the application process out of the automated system and makes it a manual process, which can delay the approval process.

20. Summary Experian’s fraud alerts
Active duty alert
Alert for deployed members of the U.S. military
Helps protect them from potential fraud and identity theft
Remains 12 months
This is the newest alert. It is designed to protect military service personnel stationed overseas.
Note that the alert remains only 12 months so that their credit activity can return to normal after the overseas tour of duty.

21. Additional fraud victim services Security freezes
You may place a security freeze on your credit report
A security freeze prevents your credit information from being accessed unless you have an existing relationship with the business
You must plan ahead before applying for new credit or services if your credit file is frozen
Experian and the other national credit reporting companies made credit file security freezes available nationwide in 2007.
Freezing your credit file is an extreme measure that should be given careful thought. Doing so removes you from the credit marketplace. While file freezing sounds like a good idea, many people who do so change their mind when they discover how often access to their credit report is necessary or desired and experience the inconvenience of having their credit file frozen.
For example losing the assigned PIN can delay mortgage processing while a new PIN is issued. In that time interest rates can increase, costing the consumer thousands of dollars during the life of the loan.
Losing a cellular telephone can cause unanticipated problems. If you don’t have your PIN with you, the service provider cannot access your credit report and so may not provide you with a new phone or reestablish your account. If you are traveling, that can be a tremendous inconvenience.
A consumer may plan ahead and unfreeze to buy a car, but will they remember that credit reports are also used for utility service, insurance, government licenses, and to activate cellular telephone service?
Further, a frozen file will not prevent fraudulent activity that does not require a credit report to be accessed.

22. How do you freeze your credit file?
You must request a security freeze from each credit reporting agency separately
Process for placing a freeze varies by state and for each credit reporting company
In general, freezes can be placed with Experian by:
Accessing
Writing to Experian and submitting all of the required identification information
Certain state laws include requirements such as toll free numbers, freezes for minors, overnight mail and expedited processing times
You can place a freeze on your Experian credit file via the Internet, by telephone or by mail, depending on your state of residence.
Information specific to your state can be found on Experian’s web site,
By automating the file freezing process, Experian has made it as fast, easy and convenient as possible. But, if you prefer to mail documents, that option is still available. Some state laws may require you to mail documentation in order to freeze or thaw your credit file. You can find details for your state at
You can also lift the freeze instantly online or by telephone, so your lenders can have access to your report when necessary.

23. How do you remove a freeze?
Process for removing a freeze varies by state and for each credit reporting company
You must use PIN provided by the credit reporting company to temporarily or permanently remove a freeze before applying for new credit
Freezes can be temporarily removed for a certain time frame or to be accessed only by a specified creditor
In general, freezes can be temporarily or permanently removed with Experian by:
Accessing
Calling EXPERIAN
Writing to Experian and submitting all of the required identification information
You also can find detailed information about removing a freeze in your state by visiting
Select your state in the drop down box at the bottom of the page.

24. How much does it cost to freeze my file?
Freeze laws vary by state in terms of fees, age allowances and methods of placement and removal
Security freezes are provided at no charge to fraud victims if a valid police report is provided
Prices for placing or removing a freeze vary by state for non-victims
Experian enables anyone to freeze their credit file, and all states have now enacted file freeze legislation. Fees for freezing and unfreezing a credit file vary depending on state laws. Security freezes are available to fraud victims at no charge when a valid police report is provided. Victims can also thaw their files at no charge.
Some state laws allow senior citizens to freeze their credit files at no charge, as well.
For non-victims, there is usually a nominal fee to freeze the credit file and to thaw it when they need it to be available. Fees vary depending on state laws.

25. The battle cannot be won in isolation
Partnership is the key to stopping identity theft:
National credit reporting agencies
Credit grantors
Data providers
Law enforcement
Government agencies
Experian believes in the power of partnerships and works with all of these entities in a variety of ways, trying to find preventative solutions and to improve victim assistance processes.

26. Resources www.lifesmarts.org www.jumpstart.org Education partners
Free annual FACT Act credit report
Access to free report from each of the three credit reporting companies
Experian
Ask Max advice column, sample consumer report, frequently asked questions
Interesting statistics about consumers and credit, compare your credit score to national, regional and local averages, learn about life events and credit
Experian Credit Educator:
Personalized review and guidance about your credit report and score by an Experian professional for a nominal fee.
Subscription fee service that monitors your credit report and other sources for evidence of identity theft, provides alerts and dedicated fraud assistance
Subscription fee service for credit monitoring and unlimited Experian credit reports and scores
For fee vehicle history reports to help consumers ensure they make good pre- owned auto purchasing decisions
Education partners
Check out our advice column on our Experian web site, as well as a wealth of information about credit reports.
Our ProtectMyID.com service monitors your credit history, Internet activity and other sources for signs of identity theft. It provides alerts to potential fraud and dedicated fraud recovery assistance.
We also offer a free report and score at freecreditscore.com to consumers when they sign up for our monitoring services. It serves as an opportunity for Experian to further educate consumers and provide a service that keeps them fully informed about activity on their credit reports.
LifeSmarts is a national consumer knowledge competition for high school-aged students, conducted under the auspices of the National Consumers League. Experian is a strong supporter.
The JumpStart Coalition for Personal Financial Literacy works with state boards of education to require financial literacy be included in school curriculums. JumpStart has compiled an extensive bibliography of financial education resources for teachers.
The final important resource is YOU! Please share your knowledge with your customers/relatives and friends --- You tell 10 people and maybe they will tell 10 people, and so on, and so on.
Most importantly, don’t forget to teach your children about credit and financial management. It will be one of their most critical life skills. 26

27. ©. 2012 Experian Information Solutions, Inc. All rights reserved
© 2012 Experian Information Solutions, Inc. All rights reserved. Experian Public. 27