Avoiding online car buying scams – National Consumers League

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When it comes time to buy a car, consumers are more empowered than ever thanks in large part to the Internet and its offerings of car reviews, online vehicle history reports, detailed car listings, and more. The Internet has also, unfortunately, given scammers a new venue to find auto-buying victims.When it comes time to buy a car, consumers are more empowered than ever thanks in large part to the Internet and its offerings of car reviews, online vehicle history reports, detailed car listings, and more. The Internet has also, unfortunately, given scammers a new venue to find auto-buying victims.

One car-buying venue that consumers are increasingly turning to is online classifieds sites such as Craigslist. There are many advantages to using such sites to purchase an automobile, most notably cutting out the dealership middlemen. Unfortunately, NCL’s Fraud Center also hears frequently from consumers who have fallen victim to fraud when purchasing a car via these services. Different scams tend to affect buyers and sellers. Here are some of the more common variants, though this list should not be considered exhaustive, as con artists are among some of the more inventive criminals out there.

The “Price Too Good to Be True” scam

In this scam, a prospective buyer sees an attractive-looking car (often a classic or exotic car) for a price well below market value. When the buyer contacts the seller, he or she is notified that the seller and the car is outside of the country and will arrange for shipment of the car upon receipt of payment, most often via wire transfer (such as Western Union) or bank-to-bank transfer (for very large payments). When the money is transferred and collected, the “seller” breaks contact and the buyer is out the money.

The overpayment scam

A legitimate seller posts a car for sale. He or she is then contacted by a prospective “buyer” (really a scammer) who offers to send a cashier’s check immediately plus additional funds to cover shipment of the car overseas. When the check arrives, the seller is instructed to deposit it and wire the overage to the “shipper.” When this is done and the wire transfer picked up, the “buyer” breaks contact and the seller is left on the hook to their bank for the fraudulent check and the missing funds.

Escrow scams

Many consumers are rightfully wary of sending large amounts of money to someone they’ve never met. Scammer frequently recommend the use of fake “escrow” services that will hold funds involved in the transaction until both parties are satisfied that the transaction has been completed. In a typical scam, a legitimate buyer will be approached by a scammer selling a car (again, often an exotic or classic car priced, but usually priced well below market value). The scam seller will offer to ship the car and that there is no risk of fraud due to the “escrow” service (purportedly eBay, PayPal, or another service). Once the money is transferred, contact is broken (or sometimes additional funds are requested to cover “unforeseen” events). In any case, the legitimate buyer never receives a car and loses their money.

How to avoid car-buying scams

  • NEVER wire money or use a bank-to-bank transfer in a transaction.
  • ALWAYS try to deal locally when buying or selling an automobile or other high-value merchandise
  • DO NOT sell or buy a car from someone who is unable or unwilling to meet you face to face.
  • NEVER buy a car that you have not seen in real life and had inspected by a professional. A vehicle history report may also be a good idea, though scammers have been known to use fake vehicle identification numbers to defeat this countermeasure.
  • WAIT until a check (personal, cashier’s, certified, or otherwise) has cleared the bank to transfer title or the car itself. Funds being made available by a bank DOES NOT mean the check is not counterfeit. Clearing a check can take days or weeks depending on the financial institutions involved. Check with your bank about their particular processes for clearing checks.
  • NEVER trust a seller or buyer who says that the transaction is GUARANTEED by eBay, Craigslist, PayPal, or other online marketplace. These sites explicitly DO NOT guarantee that people using their services are legitimate.
  • BEWARE sellers or buyers who want to conclude a transaction as quickly as possible. Scammers want to get your money before you have time to think or have a professional examine the deal.
  • CALL the buyer or seller to establish phone contact. If the buyer or seller seems to neglect details agreed to via e-mail or is unable to answer questions about their location or the location of the automobile in question, it is likely to be a scam.
  • ALWAYS trust your gut. If a deal feels “fishy” or sounds too good to be true, it probably is. Plenty of people use online classified ads to buy and sell cars every day. The vast majority of these transactions are legitimate and go smoothly. Losing out on a “great” deal in order to work with someone you trust could save you big in avoiding a possible scam.

If you feel you or someone you know has been a victim of a car-buying scam, report the scam to NCL’s  Fraud Center at www.fraud.org.

Scammers preying on weak economy in top frauds of 2009 – National Consumers League

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The recession is helping at least some people prosper despite tough economic times – scammers preying on consumers who are looking for ways to earn money. NCL’s Fraud Center has just released its annual Top Ten Scams report, and the news for consumers is that scammers are going after those of us hit hard by the economy in 2009.The report, which is compiled from consumer complaints submitted to NCL’s Fraud Center, looks at trends in Internet and telemarketing fraud in 2009. What the report finds is startling.

“Consumers are looking for ways to supplement their income or learn new skills,” said NCL Executive Director Sally Greenberg. “Unfortunately, fraudsters know this all too well and they target vulnerable consumers with business opportunity or scholarship-related scams.”

Top Ten Scams of 2009

  1. Fake Checks 42.01%
  2. Internet: General Merchandise 24.87%
  3. Prizes/Sweepstakes/Free Gifts 9.57%
  4. Phishing/Spoofing 7.17%
  5. Nigerian Money Offers (not prizes) 2.88%
  6. Business Opportunities 2.02%, Franchises/Distributorships 2.02%
  7. Advance Fee Loans, Credit Arrangers 1.82%
  8. Internet: Auctions 1.17%
  9. Friendship & Sweetheart Swindles 1.00%
  10. Scholarships/Educational grants 0.95%

Fake check scams—in which fraudsters lure in their victims with phony mystery shopper jobs or sweepstakes “winnings,” asking their victims to cash realistic-looking checks and wire a portion of the proceeds back to the scammer before the check bounces—continued to be the most frequently-reported scam to NCL’s Fraud Center, making up 42 percent of all complaints. Internet merchandise scams, fake sweepstakes, phishing, and Nigerian money offers remaining unchanged as second through fourth most-reported scams, respectively. Business opportunity scams and scholarships and educational grant scams, which were not top ten in 2008, became the sixth and tenth most-reported scam in 2009, respectively.

This year, NCL’s Fraud Center saw a spike in complaints related to bogus business opportunities and scholarship grants. Clearly, scammers know how the economic environment is affecting consumers, and they are profiting from it.

How the scams work

In a typical business opportunity scam, the victim is promised unrealistic or “guaranteed” profits in return for a significant up-front investment in a business – such as magazine stands, vending machines, or Internet kiosks. Though the profits almost never materialize, the victim still loses their initial fee and the scammer disappears. In a scholarship or educational grant scam, the victim pays a fee to the scammer in return for promises of a “guaranteed” scholarship award or generous financial aid package, which never come to fruition.

With many consumers making efforts to improve their education level or skills in order to make themselves more marketable in a tough economy, scammers are taking advantage. With state and local consumer protection budgets cut to the bone by the recession, it’s even more important for consumers to stay vigilant to avoid falling victims to these frauds.

Older consumers falling prey

NCL’s Fraud Center has also noted a link between age and vulnerability to fraud. In 2009, consumers in the top age groups—56-65 and those over 65—made up a larger portion of fraud reports than in the previous year, increasing by about 2 percent versus 2008.

Advocates fear that older consumers may not be as quick to check out a company’s bogus claims on the Internet, where many scams have been exposed by previous victims or watchdogs. NCL urges relatives and caregivers to pay special attention to older family members who suddenly start exhibiting the signs of having fallen victim to a fraudster.

These signs include a sudden inability to pay monthly bills, unusually heavy volumes of junk mail or telemarketing calls, or a reluctance to discuss repeated large payments to “a friend.“ Consumers concerned that an elderly friend or relative is a fraud victim should contact their local consumer protection office or state attorney general.

Read the full report, which includes a breakdown of telemarketing and Internet fraud, locations and ages of victims, and further analysis here.

Don’t waste your money – or risk your health – on counterfeit drugs – National Consumers League

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When shopping around for prescription medications, watch out for fakes! You could throw your money away on drugs that don’t work, or — even worse — get sick by taking counterfeits that aren’t what they pretend to be.

  • Counterfeit drugs may not have the same active ingredients as the real thing. They may also be produced in unsanitary conditions. Counterfeits could actually make you MORE ill.
  • Only buy prescription drugs from safe, reputable sources. Check unfamiliar sellers with your state board of pharmacy or the National Association of Boards of Pharmacy (NABP). Go to www.nabp.net, click on “Who We Are,” then “Boards of Pharmacy” for a list, or call 847- 391-4406. When buying online, look for Web sites displaying the NABP’s VIPPS seal, indicating that the pharmacy meets state and federal requirements.
  • Don’t be fooled by the packaging. Know the size, shape, color, taste, and side effects of the drugs you take, and examine new packages to make sure everything is right. If you notice anything different about the packaging or the actual medicine, alert the pharmacist and your doctor immediately.
  • Also report your suspicions to the U.S. Food and Drug Administration (FDA). If you bought the drug by mail, telephone, or in person, contact the FDA Medwatch program, 800-332-1088. To report counterfeit drugs purchased on the Internet, use the form at www.fda.gov/oc/buyonline/buyonlineform.htm or call the Medwatch number.
  • For more information from the National Consumers League about counterfeit drugs, visit Fraud.org.

Don’t fall for fake check scams – National Consumers League

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If someone you don’t know wants to pay you by check but wants you to wire some of the money back, beware! It’s a scam that could cost you thousands of dollars.

  • There are many variations of the fake check scam. It could start with someone offering to buy something you advertised, pay you to do work at home, give you an “advance” on a sweepstakes you’ve supposedly won, or pay the first installment on the millions that you’ll receive for agreeing to have money in a foreign country transferred to your bank account for safekeeping. Whatever the pitch, the person may sound quite believable.
  • Fake check scammers hunt for victims. They scan newspaper and online advertisements for people listing items for sale, and check postings on online job sites from people seeking employment. They place their own ads with phone numbers or email addresses for people to contact them. And they call or send emails or faxes to people randomly, knowing that some will take the bait.
  • They often claim to be in another country. The scammers say it’s too difficult and complicated to send you the money directly from their country, so they’ll arrange for someone in the U.S. to send you a check.
  • They tell you to wire money to them after you’ve deposited the check. If you’re selling something, they say they’ll pay you by having someone in the U.S. who owes them money send you a check. It will be for more than the sale price; you deposit the check, keep what you’re owed, and wire the rest to them. If it’s part of a work-at-home scheme, they may claim that you’ll be processing checks from their “clients.” You deposit the checks and then wire them the money minus your “pay.” Or they may send you a check for more than your pay “by mistake” and ask you to wire them the excess. In the sweepstakes and foreign money offer variations of the scam, they tell you to wire them money for taxes, customs, bonding, processing, legal fees, or other expenses that must be paid before you can get the rest of the money.
  • The checks are fake but they look real. In fact, they look so real that even bank tellers may be fooled. Some are phony cashiers checks, others look like they’re from legitimate business accounts. The companies whose names appear may be real, but someone has dummied up the checks without their knowledge.
  • You don’t have to wait long to use the money, but that doesn’t mean the check is good. Under federal law, banks have to make the funds you deposit available quickly – usually within one to five days, depending on the type of check. But just because you can withdraw the money doesn’t mean the check is good, even if it’s a cashier’s check. It can take weeks for the forgery to be discovered and the check to bounce.
  • You are responsible for the checks you deposit. That’s because you’re in the best position to determine the risk – you’re the one dealing directly with the person who is arranging for the check to be sent to you. When a check bounces, the bank deducts the amount that was originally credited to your account. If there isn’t enough to cover it, the bank may be able to take money from other accounts you have at that institution, or sue you to recover the funds. In some cases, law enforcement authorities could bring charges against the victims because it may look like they were involved in the scam and knew the check was counterfeit.
  • There is no legitimate reason for someone who is giving you money to ask you to wire money back. If a stranger wants to pay you for something, insist on a cashiers check for the exact amount, preferably from a local bank or a bank that has a branch in your area.
  • Don’t deposit it – report it! Report fake check scams to NCL’s Fraud Center, at www.fraud.org. That information will be transmitted to the appropriate law enforcement agencies.

Check out NCL’s new brochure.

Beware fraudulent work-at-home offers – National Consumers League

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The advertisement says you can make lots of money working from the comfort of your home. But if this were true, wouldn’t we all be doing it? There are legitimate home-based businesses out there, but also numerous scams – enough to make you think twice about “working from home” offers.Know who you’re dealing with. The company may not be offering to employ you directly, only to sell you training and materials and to find customers for your work.

  • Don’t believe that you can make big profits easily. Operating a home-based business is just like any other business – it requires hard work, skill, good products or services, and time to make a profit.
  • Get all the details before you pay. A legitimate company will be happy to give you information about exactly what you will be doing and for whom.
  • Find out if there is really a market for your work. Claims that there are customers for work such as medical billing and craft making may not be true. If the company says it has customers waiting, ask who they are and contact them to confirm. You can also ask likely customers in your area (such as doctors for medical billing services) if they actually employ people to do that work from home.
  • Get references for other people who are doing the work. Ask them if the company kept its promises.
  • Be aware of legal requirements. To do some types of work, such as medical billing, you may need a license or certificate. Check with your state attorney general’s office. Ask your local zoning board if there are any restrictions on operating a business from your home. Some types of work cannot be done at home under federal law. Look for the nearest U.S. Department of Labor in the government listings of your phone book.
  • Know the refund policy. If you have to buy equipment or supplies, ask whether and under what circumstances you can return them for a refund.
  • Beware of the old “envelope stuffing” scheme. In this classic scam, instead of getting materials to send out on behalf of a company, you get instructions to place an ad like the one you saw, asking people to send you money for information about working at home. This is an illegal pyramid scheme because there is no real product or service being offered. You won’t get rich, and you could be prosecuted for fraud.
  • Be wary of offers to send you an “advance” on your “pay.” Some con artists use this ploy to build trust and get money from your bank. They send you a check for part of your first month’s “pay.” You deposit it, and the bank tells you the check has cleared because the normal time has passed to be notified that checks have bounced. Then the crook contacts you to say that you were mistakenly paid the wrong amount or that you need to return a portion of the payment for some other reason. After you send the money back, the check that you deposited finally bounces because it turned out to be an elaborate fake. Now the crooks have your payment, and you’re left owing your bank the amount that you withdrew.
  • Do your own research about work-at-home opportunities. The “Work-At-Home Sourcebook” and other resources that may be available in your local library provide good advice and lists of legitimate companies that hire people to work for them at home. You may discover that these companies hire only local people and that there is nothing available in your area.

Spot foreclosure rescue scams – National Consumers League

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If you’re at risk of losing your home, check out anyone offering to help because they might really be offering new problems.Lease-Back or Repurchase Scams begin with a con artist’s promise to pay your mortgage and lease it back to you, if you sign over the deed – and all of your rights. This gives them the power to evict you, raise your rent, sell the house, or steal the equity you have in your home.

Refinance Fraud may happen if a con artist tricks you into signing over the ownership of your home by saying that you are signing documents for a new loan to lower your payments.

Bankruptcy Schemes abuse the laws meant to protect you and can actually prevent you from getting help with your problems. A con artist claiming to stop foreclosure and file bankruptcy for you may be getting you into deeper trouble.

Protect yourself:

  • Check credentials, reputation and experience of people or businesses offering foreclosure rescue services, such as the ones above.
  • Know what you’re signing, get promises in writing, and don’t accidentally sign over the deed to your home!
  • Make payments directly to your lender or mortgage servicer.
  • Report suspicious activity to the Federal Trade Commission and to your state and local consumer protection agencies.
  • If you fall behind on your mortgage payments, contact your lender – or a legitimate financial counselor – as soon as possible to help you find options for avoiding foreclosure.
  • Learn more about foreclosure scams, at www.occ.gov

Going once, going twice … scammed! – National Consumers League

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For more than a decade, online auctions have been one of the top-reported frauds to NCL’s Fraud Center. Both buyers and sellers can benefit from online auctions; many people make their living selling items online, and millions of consumers have had positive experiences making purchases. But there are many risks as well, and both buyers and sellers can take steps to avoid becoming a Fraud Center statistic.

  • Understand how the auction works. Many online auctions simply list items that people want to sell. They don’t verify that the merchandise actually exists or that it is described accurately, and they can’t guaranty that the sellers will keep their promises.
  • Check out the seller before you bid. Some auction sites have feedback forums with comments about the sellers based on other people’s experiences. Be aware that positive reports may have been “planted” by the seller and negative comments could be from a competitor. Other sources of information are state or local consumer protection agencies and the Better Business Bureau. Negative information is a good warning sign, but a clean complaint record doesn’t guarantee that your transaction will go smoothly.
  • Be careful if the seller is a private individual. Many consumer protection laws don’t apply to private sales, though government agencies may take action if there are many complaints the same individual or criminal fraud is involved.
  • Be especially cautious when dealing with sellers in other countries. If you have a problem, the physical distance, difference in legal systems, and other factors could make resolving it very difficult.
  • Beware of “shills.” The seller may try to raise the price artificially by making bids under fictitious names or recruiting other people to make bids. Using bogus bidders is illegal and a violation of online auction policies.
  • Get the name and contact information of the seller. The name, physical street address, email address, and phone number are helpful to have for checking the seller out and following up later if there is a problem. Don’t do business with anyone who refuses to provide that information.
  • Be wary of claims about collectibles and other expensive items. Since you can’t examine the merchandise or have it appraised until after the sale, don’t assume that claims about its condition or value are true, or that photographs are accurate. Print out and save the description and any photos to document the claims that were made.
  • Ask about delivery, returns, warranties and service before you pay. Get a definite delivery time and insist that the shipment is insured. Ask about the return policy. If you’re buying electronic goods or appliances, find out if there is a warranty and how to get service.
  • Look for information on the auction site about insurance. Some auction sites provide insurance that covers buyers up to a certain amount if something goes wrong. Others may have links to third-party programs that offer insurance for a fee. Read the terms of the insurance carefully. There is often a deductible, and there be other limitations or requirements that apply. For example, you may not be covered if the seller had a negative feedback rating on the auction site at the time of the transaction.
  • Pay by credit card. Under federal law, you can dispute the charges if you paid the seller with a credit card and the goods were never delivered or if they were misrepresented. If you are paying through an intermediary service, ask what happens in the case of disputes.
  • Look for bonded sellers. Some sellers are bonded through programs that have investigated their business backgrounds and credit histories and guaranty your money back if they don’t fulfill their promises. Click on the program symbol to learn how the bonding program works and verify that the seller is a member in good standing.
  • Consider using an escrow service for expensive purchases that aren’t covered by insurance or bonding. For a small fee, an escrow service takes your payment and forwards it to the seller once you confirm satisfactory delivery.  If there is a dispute, the escrow service may act as a referee.  Ask if the service is licensed and bonded, and how you can confirm that with the appropriate agency.
  • Try mediation to resolve disputes. Not all problems are due to fraud. Sometimes people simply fail to hold up their side of the bargain in a timely manner or there may be a misunderstanding about something. Some auction sites provide links to third-party mediation services that help people resolve disputes. There may be a small fee that is usually paid by the party who requests the mediation.
  • Inform auction sites about suspected fraud. They may have policies to remove sellers from their sites if they use “shills” or don’t live up to their obligations.

Phishing scams: Don’t take the bait! – National Consumers League

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“Phishing” is when identity thieves try to trick you into providing your personal information by pretending to be someone they’re not. A phishing scam involves sending spam or pop-up messages to lure credit card numbers, Social Security numbers, passwords, or other sensitive information from Internet users.In phishing scams, ID thieves trick people into providing their Social Security numbers, financial account numbers, PINs, mothers’ maiden names, and other personal information by pretending to be someone they’re not. Follow this advice from NCL, and read our brochure about phishing, to avoid falling victim.

  • Watch out for “phishy” emails. The most common form of phishing is emails pretending to be from a legitimate retailer, bank, organization, or government agency. The sender asks to “confirm” your personal information for some made-up reason: your account is about to be closed, an order for something has been placed in your name, or your information has been lost because of a computer problem. Another tactic phishers use is to say they’re from the fraud departments of well-known companies and ask to verify your information because they suspect you may be a victim of identity theft! In one case, a phisher claimed to be from a state lottery commission and requested people’s banking information to deposit their “winnings” in their accounts.
  • Don’t click on links in emails asking for your personal information. They may lead you to fake versions of legitimate Web sites, where criminals hope you’ll hand over your personal information.
  • Never enter your information in pop-up screens. They may be planted on legitimate Web sites by identity thieves.
  • Beware of “pharming,” con artists secretly planting programs in your computer to hijack your browser and take you to phishing sites, even when you type in the Web address yourself!
  • Keep malicious messages and programs that could be used by phishers out of your computer with a spam filter, up-to-date anti-virus and anti-spyware software, and a strong firewall.

For more tips about phishing, go to www.phishinginfo.org.

Think you’ve been a victim of ID theft? – National Consumers League

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It’s frightening to lose your wallet or discover that someone has used information about you for a fraudulent purpose. Don’t panic — help is available. You will need to remain calm, cool, and collected as you go through the process of resolving the problem.Know that ID theft is a crime.

The federal government and many states have enacted specific laws against ID theft.

You can get detailed advice by calling the Federal Trade Commission’s ID Theft Clearinghouse toll-free at 877-438-4338 or going to www.consumer.gov/idtheft. You can also provide information about your problem, which will help law enforcement agencies investigate and track ID theft. The FTC will send you a free booklet, “ID Theft: When Bad Things Happen To Your Good Name,” or you can get it online. There are other steps that you might want to take right away.

If you believe that someone is using your identity illegally, report the crime to a law enforcement agency. It isn’t always possible for agencies to investigate every case, but making an official “identity theft report” can help you solve problems resulting from the ID theft. The “identity theft report” must be a document that subjects the person filing it to criminal penalties for providing false information. This is intended to discourage people from filing phony reports to try to avoid paying legitimate debts, not to prevent legitimate ID theft victims from reporting the crimes. You can report the crime to:

  • The police department where the theft occurred
  • Your local police
  • A state or federal agency, including the U.S. Postal Inspection Service (do not use a complaint to the FTC as an official identity theft report).

When a financial account is involved, contact the bank immediately. If your credit card, debit card, ATM card, or checks have been lost or stolen, or if you suspect that someone has obtained your account number for fraudulent purposes, inform the financial institution promptly and ask what you need to do to protect your money.

Know your payment rights. Under federal law, you are not responsible for more than $50 if someone uses your credit card without authorization, and most issuers will remove the charges completely if you report the problem as soon as you discover it. While your losses could be greater if someone uses your debit card, the card issuer may have a policy that offers you more protection than federal law provides. You can contest checks that have been used with your forged signature or unauthorized withdrawals from your bank account.

Respond quickly to debt collectors. If debt collectors contact you about accounts opened in your name or unauthorized charges made to your existing accounts, respond immediately in writing, keeping a copy of your letter. Explain why you don’t owe the money and enclose copies of any supporting documents, such as an official identity theft report. You have the right to ask the debt collector for the name of the business that is owed the debt and the amount owed. And you have the right to ask that business for copies of the credit applications or other documents relating to any transactions that you believe were made by the ID thief.

Put a fraud alert in your credit files. This will oblige creditors to take extra precautions if someone applies for credit in your name to verify that it’s really you. There are two kinds of fraud alerts. An “initial fraud alert” does not require you to provide a copy of an official “identity theft report” and stays on your credit records for at least 90 days. This is the kind of alert to use if you think you might be a victim but you’re not sure – for instance, if you lost your wallet or you find out that someone has gotten access to the customer records at a place you do business. An “extended fraud alert” should be placed when you have reason to believe that someone has illegally used your identity. You must provide a copy of an official “identity theft report” to request an extended fraud alert, which will stay on your credit records for 7 years. If you put an initial fraud alert on your files, you can always request an extended alert later if the situation warrants it. Just contact one of the three major credit bureaus to place the fraud alert; it will be shared automatically with the other two: Equifax, 800-525-6285, TDD 800-255-0056, www.equifax.com; Experian, 888-397-3742, TDD 800-972-0322, www.experian.com; TransUnion, 800-680-7289, TDD 877-553-7803, www.transunion.com.

Get free copies of your credit reports. When you file a fraud alert, the credit bureaus will contact you with information about how to get free copies of your credit reports. If you filed an initial fraud alert, you are entitled to one free copy of your credit report from each of the bureaus. If you filed an extended alert, you will be able to get two copies from each of the bureaus, one right away and the other within 12 months. This will help you monitor your account for problems. Since the information at the credit bureaus may be different, be sure to get your reports from all three.

Follow the instructions to dispute any accounts you didn’t open, charges you didn’t make, or other information that isn’t accurate. Be specific about any information that you believe is the result of the ID theft. You can permanently block that information from your credit files; you will be asked for a copy of your official identity theft report to do so. As with fraud alerts, you only need to report problems with your credit reports to one of the bureaus, and it will share that information with the other two (see contact information above).

Keep checking your credit report regularly. A new federal law entitles all consumers to ask each of the three major credit bureaus for free copies of their reports once in every 12-month period. This free annual report program started in late 2004 and is being phased in gradually across the country, from West to East. Go to www.ftc.gov/credit or call 877-382-4357 for more details and to see when you can make your requests. You don’t have to ask all three credit bureaus for your reports at the same time; you can stagger your requests if you prefer. Do not contact the credit bureaus directly for these free annual reports. They are only available by calling 877-322-8228 or going to www.annualcreditreport.com. You can make your requests by phone or online, or download a form to mail your requests.

Your state law may also entitle you to free credit reports. Ask your local consumer protection or state attorney general’s office. Any rights your state law gives you are in addition to your rights under federal law.

Be cautious about offers for credit monitoring services. Why pay extra for them when you can get your credit reports for free or very cheap? Read the description of the services carefully. Unless you’re a victim of serious and ongoing identity theft, buying a service that alerts you to certain activities in your credit files probably isn’t worthwhile, especially if it costs hundreds of dollars a year. You can purchase copies of your credit reports anytime for about $9 through the bureaus’ Web sites or by phone: Equifax, 800-685-111; Experian, 800-311-4769; TransUnion, 800-888-4213.

Protect your identity – National Consumers League

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How would you feel if you were stopped for a traffic violation and suddenly found yourself being handcuffed and taken to jail for a crime you never committed? Or if you got a nasty call from a collection agency for a car loan you never had? Or if your application for a home mortgage was turned down because of information in your credit report about overdue bills on accounts you never opened?These are situations you could face as a victim of identity theft. While ID theft can take many complex forms, the essence of this crime is simple—someone steals personal information about you to use for fraudulent purposes.

ID theft can happen to anyone. By guarding your personal information carefully, you can reduce the likelihood of becoming a victim. But you may not be able to avoid ID theft entirely; it can happen in ways beyond your control. Businesses, government agencies, and organizations that obtain personal information also have a responsibility to handle it carefully and keep it secure.

If you do become a victim of ID theft, there is help available to guide you step-by-step through the procedures that you will need to take to resolve the problem.

Avoid falling victim to identity theft by following this routine:

  • Check credit reports annually and before major purchases.
  • Check bank and credit card statements regularly and report unauthorized transactions immediately.
  • Carry only the credit cards, checks and identification you need.
  • Safeguard your Social Security Number.
  • Don’t give out personal information unless you know the recipient.
  • Pick up receipts from ATMs, restaurants, and stores.
  • Protect your Personal Identification Numbers and never carry them with you.
  • Use strong passwords to protect sensitive information. Don’t use information like birthdays or pets’ names.
  • Shred important documents before discarding them.
  • Destroy expired or unneeded cards.
  • Keep firewall, anti-virus, anti-spam and anti-spyware software current on your computer. Don’t respond to requests for personal information from unsolicited email or pop-ups.