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30 June 2005

Responding to Identity Theft

Sherry Kughn
News Bureau

Stacy Wood of Talladega had no idea she would spend so many hours restoring her credit after a thief stole her wallet in May.

Weeks later, she still has to deal with the problem, and she has been told it will take months before her credit can be fully restored. Thankfully, she won't have to assume an enormous loss of money because her renter's insurance policy will reimburse her for days missed from work, the expense of travel involved in the recovery, and other incidentals, including the cost of a new wallet and duplicating and filing papers.

Insurance companies have responded to consumer anxiety about identity theft. The problem is growing, and consumer confidence is being shaken by news of the increased number of security violations among financial institutions.

More than ten million Americans have been the victims of some degree of theft, according to a recent press release by MetLife Auto & Home. Several insurance companies are offering policies that not only reimburse expenses incurred during the credit restoration process, but also they offer advice about how to prevent theft and restore credit.

Some companies provide the coverage at no additional cost to homeowners or renters. Others charge from about $2 to $5 a month to provide the coverage. Companies often wait until a client's policy needs renewing before notifying them about the addition or about the opportunity to add riders onto existing policies.

"I started hearing about this addition coverage at the beginning of the year," said Jonathan Pfeiffer of Nationwide Insurance in Anniston. "It took the company about six months to work out the details and to implement it. They rushed it up."

Policyholders who do not want to wait until renewal time should call their carriers to request the additional coverage or to learn about coverage they may already have.

An additional safeguard against identity theft is credit card monitoring, which alerts customers to unusual purchases or increased purchase activity. Coverage costs between $8 and $12 per month per card, considerably more than credit restoration insurance coverage. Together, the two could run $10-17 or more per month per card.

"It is easy to overindulge in the use of insurance," said Dr. Bill Scroggins, head of the finance, economics and accounting department at Jacksonville State University.

"Sometimes consumers do so by attempting to insure away practically all of the many risks to which they are exposed. To do so becomes cost prohibitive."

However, Scroggins said the cost of additional coverage is reasonable when compared to the losses from identity theft. Since credit cards can be accessed online, said Dr. Scroggins, consumers can monitor their own cards daily or weekly to minimize losses or risks. Consumers should also use common sense to minimize risks by practicing good identity theft protection.

Mrs. Wood is determined to make something good come of her bad situation.

"This has been an education," she said. "I do not want friends and family members to have it happen to them."

She has shared with others the lessons she has learned, starting with how important it is to guard the Social Security number. Because she carried hers in her wallet, thieves were not only used her credit cards but also blocked access to her bank account by changing the pin numbers. She also recommends not having the Social Security number on the driver's license, a change that can be made when the license is renewed.

The police station in Talladega gave Ms. Wood an identity theft kit. It contains not only information about correcting problems related to theft but also tips on how to avoid it.

Dr. Scroggins takes heart in that improvements are being made in technology that minimizes security breeches.

"Maintaining security and protecting data bases is a focal point of computer development and information system instruction right now," said Dr. Scroggins.

The best insurance against identity theft is prevention. Here are other tips:

Conduct a credit check by contacting Trans Union at, phone 1-800-888-4213: Experian, phone 1-888-397-3742: or Equifax, phone 1-800-685-1111.

Read credit card and bank statements closely to spot any unusual items.

Notify the police at once if fraud is committed.

Notify all credit card companies and banks at once if fraud is committed.

Shred all items that have personal information on them before discarding.

Ask companies who take your personal information if they shred discarded documents. Trash theft is one way thieves gain information.

Drop bills into a postal box rather than flagging the home mailbox.

Ask the post office to hold mail when leaving home.

Never give out personal information over the phone or Internet.

Use secure browsers when shopping on the Internet, and update virus protection on home computers.

David Glass of Calhoun County Insurance Center has brochures for concerned consumers from GuideOne. Call 435-2242 to obtain one. Other information about identity theft, according to the brochure, can be found at,,, and

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