By Bruce McClary
There are few people who have been untouched by the effects of identity theft. According to the latest data, nearly 100 million Americans are at risk of identity theft each year because their personal identifying information is compromised. It is also likely that many of those people are among the 40 million Americans paying back at least one student loan. Each year the numbers grow, placing even more people in the cross hairs of criminals.
It can be easy to overlook how identity theft impacts student borrowers since it is most commonly associated with credit and debit cards. The objective is to be alert to the signs of identity theft and be ready to take action when it happens.
Be Aware of Possible Ways an Identity Thief Can Take Action
One of the most damaging examples is when someone obtains a private student loan in your name. Despite the popular misconception that the proceeds of these loans are required to be used exclusively for school expenses like campus housing or tuition, the truth is that borrowers can spend the money on anything. This makes student loans an attractive target.
Victims may find out that someone has obtained a student loan in their name at a time when it’s too late. It’s best to be aware of the problem before a debt collector calls or when your loan application is rejected as you apply for federal student loans. This is where checking your credit regularly can come in handy. It’s easy to do and free when visiting annualcreditreport.com. If left unnoticed, delinquent federal student loans can prevent you from receiving future tax refunds from the IRS and can also prevent you from obtaining federally insured mortgages.
Take Action as Soon as Fraudulent Activity is Detected
Once fraudulent activity has been identified, report it right away. The first step should be to notify the U.S. Department of Education Office of Inspector General Fraud Hotline if the situation involves a federal loan. It is also important to notify law enforcement as well as the three credit reporting agencies, Equifax, Experian and TransUnion. The Social Security Administration and the Federal Trade Commission should also be contacted.
What Information Should be Protected?
Prevention is the key to protecting your financial future, so be sure to keep a watchful eye on your credit report and do not share your FAFSA personal identification number (PIN) with anyone else. The same applies to your social security number (SSN) and other identifying information.
Be sure to use different passwords for online accounts and follow password suggestions like including both upper and lower case characters, numbers and a special character when creating your passwords. We also recommend securing all of these important documents as well as a password list in a locked safe in your home.