Tax Time: Don’t Let an Identity Thief Get Your Refund

Tax Time: Don’t Let an Identity Thief Get Your Refund

Some people dread tax time: the hassle of filing or the possibility of facing a bill to pay is no fun. Some people look forward to tax time: those who are expecting a refund that will help pay for their summer vacation or home improvement project.

But, you know who really loves tax season? Identity thieves. This is because during tax season, personal and financial information is more plentiful and easier than ever for thieves to intercept and secure. In fact, the IRS reports the number of criminal investigations into identity theft cases more than tripled in fiscal year 2012 over 2011.

While identity theft isn’t 100% avoidable, there are a few simple things you can do to protect yourself from falling victim to identity theft during tax time.  We've compiled a list of questions below that, depending how you answer, can reduce your risk of becoming a victim of identity theft. See how you did this tax season:


·        Did you choose a trustworthy tax preparer? – Tax preparers seem to be everywhere this time of year. Be wary of pop-up tax advertisements. A dishonest preparer can easily redirect your tax refund, or worse, take advantage of your personal information and compromise your credit report and score. Do a little research up front by checking out your tax preparer with the Better Business Bureau. Don’t choose tax preparers that charge a percentage of your return as a fee or refuse to quote you an exact fee up front. Lastly, never sign a blank return and always review your completed return before singing it.

·        Did you protect sensitive documents? Think of all the personal information in the financial documents used in tax filing, like your W-2s and interest statements.  In January, did you watch your mailbox for these and ensure they didn't sit in your mailbox longer than necessary? Did you leave these documents out and unsecure, like on your desk at work, in your purse or on your kitchen table. If you filed your taxes by mail, did you drop off your return directly at your post office instead of leaving it your mailbox?

·        Did you keep your Social Security card safe?  Never carry your Social Security card in your wallet or purse where it could be stolen. If stolen, thieves could use your Social Security number to steal your refund or open up lines of credit in your name (and possibly ruin your credit score.) Keep your Social Security card locked up at home.

·        Did you protect your information online?  The IRS does not contact people by email or social media (or by phone or text). If you receive any electronic messages claiming to be from the IRS, they are likely fraudulent. Forward them to phishing@irs.gov. If you are filing online, always use difficult passwords and a secure network to complete your return.
 
You may be a victim of identity theft if you receive a notification from the IRS that states their records show that more than one tax return was filed for you, or you received wages from an employer you don't recognize. If you receive such a letter, contact the IRS’ Identity Protection Specialized Unit immediately at 1-800-908-4490. 

So now that you’ve filed your taxes (or at least filed for an extension), and are hopefully getting a refund, take a little bit of time to ensure your personal information is safe and secure.

Don't Get Fooled by Credit Offers that Seem “Too Good to Be True”

Don't Get Fooled by Credit Offers that Seem “Too Good to Be True”
If you’re planning to make any type of large investment such as purchasing a home or a new car, having a solid credit rating is important. Especially since lenders use your credit scores to make decisions on loan amounts and interest rates.
However, if you haven't always paid your bills on time, maxed out multiple credit cards, or have even applied for too many loans, you may think your credit scores could be lower than desired or damaged.  
Then one day in your email, you see a “great” offer that promises to help make your credit standing better, increase your score, or help improve your credit standing in some other way. STOP! Before you start handing over your personal information and taking advantage of these so-called “great” offers, make sure you’re not getting misled by one of these common credit solicitations:
  • The “We can raise your score!” offer: Your credit score is your credit score. There are ways you can manage your credit that will ultimately make your credit score stronger. However, no outside party can magically “boost” your credit rating, which is ultimately a reflection of your ongoing credit history, payment history, etc. Don’t be fooled by these types of offers.
  • The “We can erase your credit history!” offer: Think erasing your credit history sounds too good to be true? It is. You cannot erase your credit history. If the information is accurate, it can stay on your credit report for a minimum of 7 years, 7 to 10 years for bankruptcy, and 15 years for certain taxes.
You should also be mindful of the following:
  • Credit impaired cards: While there are a few good credit impaired credit cards out there, be wary of ones that will charge you high interest and high setup fees with a low credit limit, as well as ones that apply fees to your credit card balance leaving you credit-less until they are paid.
  • Credit impaired loans: Similarly, credit impaired loans aren't always what they seem. Look out for tight repayment conditions and unnecessarily high fees.
At end of day, your best protection is to be aware of what’s in your credit files. Each of the 3 major credit bureaus (Experian, TransUnion, Equifax) provide credit data that includes your payment history, account information, public records information, and other factors impacting your credit rating.  

Some credit services also offer score simulator tools. These can help you understand the potential impact to you credit scores when opening new lines of credit, establishing new accounts, and more.
Your credit score and reports are certainly no joke, so don't let offers that seem “too good to be true” fool you.