In recent years, there have been several high profile instances of credit card information breaches at major retailers (TJX Companies – 2006-2007; Target – 2013; Home Depot – 2014). Credit card theft is annoying – I personally had credit cards compromised from all three stores listed above. Make no mistake, credit card theft is a huge issue for businesses. For individuals, except for certain circumstances, it’s mostly a payment inconvenience: (1) waiting for a new card to be issued; (2) transferring recurring payments; and (3) any transition of transactions/returns from old card to new card, etc.
Frequently, people state that they had their “identity stolen”, when, in fact, they only had their credit card information compromised. They couldn’t be more wrong.
Credit card information by its nature is temporary (credit cards have expiration dates, can be immediately cancelled, etc.). Fraudsters have a limited window in which to utilize the compromised information before credit card information is cancelled, etc.
However, identity information is permanent: (1) Legal name (maiden names); (2) date of birth; (3) social security number; (4) addresses and/or former addresses; and (5) employment history, etc.
The passage of time does not make this information obsolete. Anthem (formerly WellPoint) disclosed a major breach of identity information in February 2015.
Fraudsters can collect identity information and hold it for years. Once any media frenzy regarding a credit card breach ends, any identity information that was compromised is still valid. Additionally, repercussions from identity theft can have farther reaching impacts than financial losses (e.g. crimes committed with fraudulent identities, fraudulent tax returns filed with social security numbers, etc.). In fact, in early 2015, TurboTax suspended (or was forced to suspend) the electronic submission of state income tax returns due to fraudulent electronic tax return submissions.
In most instances, fraudulent use of identity information will appear on an individual’s credit report. Individuals have the right to a free copy of their credit report once per year. Additionally, credit reporting agencies offer more frequent access to credit reports and active credit report monitoring for nominal fees.
Diligent monitoring of your personal identity information and credit reports is essential to identify and remediate any identity theft issues as soon as possible.
About the author
G. Matt Barberich, Jr., provides business valuation, forensic accounting, and litigation support services for attorneys and clients