How to Help Your Clients Protect Themselves from Identity Theft

As clients work with their accountants to help them out of their financial troubles, nothing is more alarming than identity theft. This still-growing crime hits people of all ages, and mostly in an uncontrollable fashion. Victims generally get their wallet or mail stolen, or are an unfortunate recipient of a data breach, scam or computer virus.

One report that backs up these trends is the 2013 Employee Financial Wellness Survey, conducted by PwC of more than 1,600 American-working adults. It found that 17% of employees have been a victim of identity theft, while 42 % wouldn’t know what to do in the event they become a victim. Here is a quick glance at what actions you can take to advise your clients on this threatening issue.

File an Initial Fraud Alert

Seek one of the three credit reporting companies: Equifax, Experian and TransUnion. These services allow you to make it more challenging for an identity thief to open more accounts in your name. One company has to alert the other two, and once the alert appears on your report, it stays there for 90 days and a business must ensure your identity before it issues credit. Expect them to contact you.

Order Credit Reports

The next step is to acquire your free credit report. Request that the company only display the last four digits of your Social Security number in the report. If you can discover which account has been tampered with, contact the place it happened and speak with someone in the department. To ensure you are doing everything possible to get your answers fast, follow up in writing and send letters by certified mail, requesting a return receipt. This will establish a proven record of communication.

Create an Identity Theft Report

Finally, develop an identity theft report to help you in your involvement with credit reporting companies, debt collectors and businesses that provide identity theft credits or opened new accounts in your name. In doing so, you can block a company from collecting debts that come from identity thefts, obtain fraudulent information taken from your credit report, track down information on accounts that the identity thief opened or abused, and put an extended fraud alert on your credit report.

The Most Likely to be Hit

Perhaps most surprisingly, children are hit the worst, 35 times more than adults. In this case, no one is off limits, including family and friends. The next two most at risk of identity theft are people who have social media profiles and Smartphone users. The next victim is the deceased, which astoundingly comes in at 3 million people annually. The other most common victims are college students, people of data breaches and higher income individuals.

Closing Statements

As you can see, the despicable act of identity theft can rip through families and people of any age. Take advantage of these necessary steps and information to help your clients avoid identity theft or let it escalate and leave a worse trail on your record.

Editor’s Note: The AICPA recently issued comments to the Senate on the Identity Theft and Tax Fraud Prevention Act of 2013.