How to Avoid or Recover from Identity Theft: Resilience Education

Identity theft is scary. Experiencing the situation is not only unpleasant, you may have to experience the repercussions for a long time to come.

What happens if it goes on for a long time and you aren’t aware? Some people don’t have the ability to monitor their accounts or receive notices when new accounts are opened in their names.

A PREVALENT EXAMPLE: AN AT-RISK POPULATION  

Imagine this: After 27 months, you have finally finished your prison sentence. In order to begin the process of rebuilding your life and reintegrating into society, you request a credit report to see where you stand. What you learn from the report is that “you” opened several accounts while you were incarcerated, and “you” failed to file a tax return for the income “you” earned during those 27 months incarcerated, which is simply impossible. You are thousands of dollars more in debt than when you went into prison 27 months ago. Your identity has been stolen, and you are not alone; identity theft of prisoners happens much more than you might expect.

While anyone might wake up to find their identity has been stolen, the incarcerated are particularly at risk. Prisoners typically are not allowed to use or monitor their financial accounts, nor do they receive notices of new accounts opened in their names.

According to The Wall Street Journal article outlining the issue, in 2012, “false returns filed with prisoners’ Social Security numbers had surged to about 137,000 … from 37,000 in 2007.”  Identity theft of prisoners is prevalent. Their lack of access to their own financial accounts combined with their vulnerability of having their personal information in the system makes them perfect candidates for an identity thief, and the numbers reflect this. 

A STACKED DECK

For prisoners, with the deck already stacked against them upon release in areas such as the job and housing markets, low credit or debt incurred from identity theft while they were incarcerated adds even more barriers to reintegration into society. A bad credit score impacts one’s life in more ways than this, including but certainly not limited to affecting insurance rates, apartment application approvals, employment opportunities, and even personal relationships, as employers, landlords and banks all have access to credit scores.

These, combined with a prison sentence on your record, can all but assure a struggle to start over, which increases the likelihood of re-incarceration.

Darden Professor Gregory Fairchild wanted to ensure that the students in Resilience Education — a prison business education program he co-founded with Tierney Fairchild — were not only alerted to the dangers of identity theft, but also offered tools to recover their financial lives.

A partnership between the UVA Darden School of Business and Columbia Business School, Resilience Education sends MBA volunteer instructors into prisons to teach cases on entrepreneurship, financial capability and business foundations. These topics provide students the skills, confidence and practical knowledge they need for a successful reentry into society. To date, 93 percent of program graduates, formerly incarcerated, have remained out of prison.

WHAT TO DO ABOUT IT: A GUIDE FOR EVERYONE

An original Resilience Education case offers these four tips to protect yourself against identity theft and five steps to recover from a stolen identity.

IDENTITY THEFT PREVENTION: 4 TIPS

1. Use only secured websites for shopping (the URL should start “https://”), and avoid giving out sensitive information while using public Wi-Fi. For example, do not log in to your bank account while on a public Wi-Fi connection.
2. Your passwords need to be hard to guess: ideally, a random combination of letters, numbers and characters. Keep these passwords in a secure place.
3. Request a free copy of your credit report each year, and check it thoroughly for any accounts you did not open.
4. Consider subscribing to a reputable credit monitoring company, like one with your bank or credit card company. Keep track of any alerts they sent about new accounts opened or potential identity theft issues.

IDENTITY THEFT RECOVERY: 5 STEPS

1. Create an initial fraud alert, informing credit bureaus about the identity theft to stop the thief from opening any more accounts.
2. File an identity theft report with the Federal Trade Commission, also known as a complaint report. This information will form an Identity Theft Affidavit.
3. File a report with your local police and any locations listed on your credit report.
4. Call the Internal Revenue Service’s Identity Theft Protection Unit and complete any necessary paperwork. Repeat the same steps with the state income tax office.
5. Depending on your circumstances, alert the credit card companies, banks and/or employers with whom there has been fraudulent activity in your name:

• For credit card fraud, contact each credit card company, review all accounts and charges made in your name, and send each company a copy of your identity theft report.
• For bank fraud, contact each bank to request any applications submitted in your name and to send a copy of your identity theft report.
• If someone has been working using your social security number, contact the Social Security Administration to report the misuse, and ask employers for any related information (addresses, phone numbers) to pass along to police.
• Be sure to forward any new information you receive to the police.

For more information, the Federal Trade Commission offers further free resources, including templates for reporting identity theft.
Gregory B. Fairchild, Tierney Fairchild, Christina Black and Liz Ivaniw Jones wrote the case Tentacles (Identity Theft) (Darden Business Publishing).

This article was developed with the support of Darden’s Institute for Business in Society, at which Rebecca Little is a research assistant.

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