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Identity Theft Protection
How to guard against identity theft

Protect yourself against fraud and identity theft—understand ways it can happen, how to avoid the most common fraud-causing situations, and what to do if you are subject to this type of problem.

Fraud & identity theft: what it looks like

Fraud cost the American economy millions of dollars per year in losses. Between January and December, 2003, the Federal Trade Commission received over half a million consumer fraud and identity theft complaints, with losses of over $400 million reported. The losses affect consumer savings accounts, retirements and the ability to purchase homes. Bank accounts have been emptied with no recourse.

Increased e-commerce from the rise in Internet use has opened the doors for easier fraud perpetration. While companies involved in information technology have invested in increased security, identity theft protection is a continuing battle requiring the awareness of both consumers and businesses. The good news is that there are simple steps you can take to help prevent unauthorized access to your information and finances and guard against identity theft.

Although fraud can take many forms, our advice will be mainly focus on the types that most affect credit reports and scores. We have also provided additional links at the end of this section for further research.

In 2008, the FTC presented its Red Flags Rules requiring all creditors and financial institutions to implement an identity theft prevention program. To support this ruling, Advantage Credit developed the Red Flags Report, enabling these financial institutions and creditors the ability to check for the Red Flags of Identity Theft instantly, and cover their liability for Red Flags Rule compliance. Many in the industry are hopeful that the ruling will curb identity theft to some degree.

Common types of fraud affecting credit reports
  • Identity theft
  • "Phisher" or mock websites
  • Social Security fraud
  • Intercepting credit card information from online transactions
  • Mishandling of credit reports

 

1. Identity theft: Identity thieves gain access to information that allow them to pose as someone else. They may steal boxes of checks, bank statements or other mail from a mailbox; steal a wallet or purse and use the information to open new accounts, as well as spend on existing credit cards or checks; or extend a bogus offer to you via phone or email.

Many people who have had their identities stolen and used have not found out until the next time they went to open a credit account, apply for a home loan, or initiate another normal transaction.

2. "Phisher" or mock websites: This is more recent phenomenon, whereby perpetrators duplicate a website and send emails requesting that a customer reapply or provide security information. The information is then used to steal the consumer's identity, access bank funds, or apply for fraudulent loans. The phisher site spam emails instruct consumers to click on a link to what looks like a real corporate website and input their personal information. The fake website looks like it comes from a legitimate company with whom a consumer may have a relationship, but the fraudulent site is really just a vehicle to steal information.

3. Social Security fraud: This occurs when someone gains access to a Social Security number and uses it, along with other gained information, to commit fraud or identity theft. Social Security numbers of deceased persons or retired persons via their Social Security checks, along with an address, can allow someone to apply for credit reports that often contain enough additional information for a perpetrator to take the next step.

4. Intercepting credit card numbers from online transactions or databases: When people buy goods or services over the Internet, it's rare these days to have the credit card information transferred without encryption, or coding, designed to prevent hacking. But there are still cases where computer hackers gain access to information as it is sent. Hackers also search for weaknesses in databases maintained by businesses, government and financial institutions, and attempt to exploit them to gain account numbers. The incidence of breaking into these databases is not high, but one access breach can give perpetrators potential access to hundreds or thousands of account numbers at once.

5. Mishandling of credit reports: Credit reports contain all the information any thief would need to steal using existing accounts, or to swipe one's identity completely and cause major financial harm. There are several ways those in the credit reporting industry manage to balance the need for accurate account information to rate, while keeping enough information hidden to protect identities from theft. Strict compliance regulations from bureaus and the government require credit report users to have passed many hurdles to begin ordering & using credit reports. In addition, account numbers are partially masked on copies accessible to consumers. Data security standards are extremely high, and audits are frequent.


Services that can prevent identity theft

Advantage Credit's Red Flags Report is a comprehensive identity theft prevention system which helps banks and credit unions detect and prevent identity theft and get in compliance with the Red Flags Rules issued by the FTC.



Tips on preventing fraud & identity theft

There are several fraud and identity theft protection methods.

  • Review your credit report regularly. An annual review is not expensive and can help catch unauthorized activity. You can conveniently order your credit report now from this website.
  • Review your online or paper statements for your bank and credit accounts to ensure that only your activity is on them.
  • Do not reveal your Social Security number unless you are sure of the entity and purpose for which it is being revealed. Many organizations have used Social Security numbers as an easy way to identify members. Decline its use and request another identifier if possible.
  • Do not give out your account numbers, login information or passwords for online transactions to others.
  • If you order checks, contact the bank promptly if you do not receive them in the specified delivery period.
  • Know when your account & bank statements come to you by mail, and contact the account holders or bank when you do not receive them by the usual dates.
  • When traveling, have your mail held at the post office or have it picked up regularly.
  • Make sure you do not send your credit card information for online purchases through websites that are not secured & encrypted, or by email.
  • Be aware of those behind you when using the ATM; guard viewing access to your pin entry.
  • Do not give your credit card, Social Security number or other personal information to telephone solicitors. If you are interested in the product, research the company and it's product first and call the company back to order if legitimate. Do not give any personal information over the phone in exchange for the promise of "winning" anything.
  • If you receive an email directing you to the website of a company with which you do business, requesting for you to provide account numbers or other private information, do not provide the information. Contact the company directly to determine the legitimacy of such a request.
  • Do not write your account information or pin numbers on cards or places whereby a thief may be able to access both credit cards & pin numbers in the same theft-for example, do not write your pin numbers on the backs of your credit cards.
  • If you order your own credit report, store the printed version of the report safely.
  • Consider "opting out" of receiving direct mail often contains "pre-approved" credit card offers. Opting out helps stem the flow of such mail and helps minimize wasted paper as well. Information on how to opt out follows in this section.
What to do if it happens to you

The signs can vary, but typical indicators of fraud and/or stolen identity include:

  • One of your creditors informs you that they have received an application for credit with your name and Social Security number.
  • Incoming calls or letters stating that you have been approved or denied by a creditor to which you never applied.
  • You receive credit card, utility, or telephone statements in your name and address for which you never applied.
  • You no longer receive your credit card statements, or you notice that not all of your mail is delivered to you.
  • Your credit card statement includes unusual purchases.
  • A collection agency tells you they are collecting for a defaulted account established with your identity, but you never opened the account.

 

If you think you've become a victim of identity theft or fraud, act immediately to minimize the damage to your funds, financial accounts and credit report. Here's a list, based in part on a checklist prepared by the California Public Interest Research Group (CalPIRG) and the Privacy Rights Clearinghouse, of some actions that you should take right away:

  1. Contact the Federal Trade Commission (FTC) to report the situation, whether
  2. Online,
  3. By telephone toll-free at 1-877-ID THEFT (877-438-4338) or TDD at 202-326-2502, or
  4. By mail to Consumer Response Center, FTC, 600 Pennsylvania Avenue, N.W., Washington, DC 20580.

Under the Identity Theft and Assumption Deterrence Act, the Federal Trade Commission is responsible for receiving and processing complaints from people who believe they may be victims of identity theft, providing informational materials to those people, and referring those complaints to appropriate entities, including the major credit reporting agencies and law enforcement agencies. For further information, please check the FTC's identity theft web pages. You can also call your local office of the FBI or the U.S. Secret Service to report crimes relating to identity theft and fraud.

You may also need to contact other agencies for other types of identity theft:

  1. Your local office of the Postal Inspection Service if you suspect that an identity thief has submitted a change-of-address form with the Post Office to redirect your mail, or has used the mail to commit frauds involving your identity;
  2. The Social Security Administration if you suspect that your Social Security number is being fraudulently used (call 800-269-0271 to report the fraud);
  3. The Internal Revenue Service if you suspect the improper use of identification information in connection with tax violations (call 1-800-829-0433 to report the violations).

Call the fraud units of the three national credit bureaus:

Equifax:

  1. To report fraud, call (800) 525-6285 or write to P.O. Box 740250, Atlanta, GA 30374-0250.
  2. To order a copy of your credit report, click here or call (800) 685-1111.
  3. To dispute information in your report, call the phone number provided on your credit report.
  4. To opt out of pre-approved offers of credit, call (888) 567-8688 or write to Equifax Options, P.O. Box 740123, Atlanta GA 30374-0123.

Experian (formerly TRW)

  1. To report fraud, call (888) EXPERIAN or (888) 397-3742, fax to (800) 301-7196, or write to P.O. Box 1017, Allen, TX 75013.
  2. To order a copy of your credit report, click here or call (888) EXPERIAN.
  3. To dispute information in your report, call the phone number provided on your credit report.
  4. To opt out of pre-approved offers of credit and marketing lists, call (800) 353-0809 or (888) 5OPTOUT or write to P.O. Box 919, Allen, TX 75013.

TransUnion

  1. To report fraud, call (800) 680-7289 or write to P.O. Box 6790, Fullerton, CA 92634.
  2. To order a copy of your credit report, click here or call (800) 888-4213.
  3. To dispute information in your report, call the phone number provided on your credit report.
  4. To opt out of pre-approved offers of credit and marketing lists, call (800) 680-7293 or (888) 5OPTOUT or write to P.O. Box 97328, Jackson, MS 39238.

Contact all creditors with whom your name or identifying data have been fraudulently used. For example, you may need to contact your long-distance telephone company if your long-distance calling card has been stolen or you find fraudulent charges on your bill.

Contact all financial institutions where you have accounts that an identity thief has taken over or that have been created in your name but without your knowledge. You may need to cancel those accounts, place stop-payment orders on any outstanding checks that may not have cleared, and change your Automated Teller Machine (ATM) card, account, and Personal Identification Number (PIN).

Contact the major check verification companies (listed in the CalPIRG-Privacy Rights Clearinghouse checklist) if you have had checks stolen or bank accounts set up by an identity thief. In particular, if you know that a particular merchant has received a check stolen from you, contact the verification company that the merchant uses:

  1. CheckRite: (800) 766-2748
  2. ChexSystems: (800) 428-9623 (closed checking accounts)
  3. CrossCheck: (800) 552-1900
  4. Equifax: (800) 437-5120
  5. National Processing Co. (NPC): (800) 526-5380
  6. SCAN: (800) 262-7771
  7. TeleCheck: (800) 710-9898
Additional resources for fraud & identity theft

Advantage Credit has compiled several links from fraud prevention services, the three credit bureaus (Experian, TransUnion & Equifax), the Department of Justice, the Federal Trade Commission and the Social Security Administration for your further research.

Equifax: If you're a victim
Equifax's resource center for fraud and identity theft.

Experian's Fraud Assistance Center
Experian's resource center for fraud and identity theft.

TransUnion Fraud and Identity Theft Information
TransUnion's resource center for fraud and identity theft.

http://www.usdoj.gov/criminal/fraud/idtheft.html
The Department of Justice's (DOJ) links on identity theft, identity fraud, preventing fraud, what to do in the event of identity theft and more.

http://www.ftc.gov/opa/2000/02/idtheft.htm
Information and a toll-free number to the Federal Trade Commission (FTC) call if you have been subject to identity theft.

http://www.consumer.gov/idtheft/
FTC's page on what to do & whom to contact in the event of identity theft, and best methods for recovering.

http://www.ftc.gov/bcp/conline/pubs/credit/bbcr.htm
A broad explanation of the most important topics in credit, fraud, identity theft and more by the FTC.

http://www.ssa.gov/oig/guidelin.htm
Social Security Administration information page regarding Social Security fraud, how to prevent it and what to do if you're a victim.

http://www.usdoj.gov/fraud.htm
Department of Justice notice warning consumers about the different methods of fraud and identity theft, both off and online.
 

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