A true story of identity theft

This was originally published on Monday, May 2 ,2016 in the Pacific Daily News.  Click here to subscribe to the PDN.

Identity theft is something very real even to residents of Guam. I recently discovered that a person very close to me is a victim of identity theft.  I thought this real life situation could assist other people if they discover they are a victim.  We sat down and discussed the experience.  The following is what we talked about.

I was most curious about the first red flag that alarmed him to possible identity theft.  He was completely unaware of the identity theft.  One day his wife pointed out that their Social Security income had been reduced.  They called the Social Security Administration  and were informed that there was a levy on their Social Security income and that it was being garnished due to delinquent payment of taxes.  The Social Security agent told him to call the Internal Revenue Service (IRS).

He called the IRS and informed the IRS of what had occurred.  The agent asked for his full name, Social Security Number, and mailing address for verification.  The agent told him that the mailing address he provided did not match the address that was on record.  Upon further investigation the IRS agent informed him that his W2 from his employer was not included in his 2012 tax forms.  The agent asked him if he had his 2012 tax forms to verify the amount of the missing W2.  The amount reported on his W2 and the amount reported to the IRS was the same amount.  The agent then asked where his 2012 tax forms were filed.  My friend replied that he and his wife had been filing their taxes here on Guam for thirty years. The agent then asked how long they lived in Guam, how long they lived at their current address, and if they ever worked for a company based in Texas.  He answered he has been a resident of Guam for many years and that he and his wife never worked for a company in Texas.  The IRS agent then told him that he was a victim of identity theft and someone in the United Sates filled a tax return using his name and Social Security number.  The IRS agent gave him instructions on how to go about reporting his identity theft.

His first reaction was shock. He wondered how could this happen to him. He thought that if this could happen to his Social Security information what else was compromised?  He became worried about his savings and checking accounts and credit cards.

According to the Federal Trade Commission’s, FTC, identity theft website, https://www.identitytheft.gov , the first thing you do right away is call the companies or agencies where you know the fraud occurred.  Next, place a fraud alert and get your credit reports.  Then report your theft to the FTC.  Lastly, file a report with your local police department.  Depending on the type of identity theft of which you are a victim  will determine your next steps.  Visit the website for complete and compressive checklists on steps to take to report and recover from identity theft.

My friend says it is not easy and he has realized that working with the IRS is a major challenge.  It has taken him hours on the phone talking to several different agents and numerous phone calls.  He has filed several forms with the IRS to lift the levy on his Social Security income.  He was told that it could take up to 180 days to resolve the issue, but it could take longer to receive the reimbursement.  I can’t imagine if this were to happen to a person who solely relies on Social Security as the source of their income. This would be devastating.

My friend’s advice is that you should ensure that your personal information such as your bank accounts and credit cards be safeguarded. Set up notifications on your credit card if a transaction over a certain amount is made.  Check your credit scores regularly and consider enrolling in an identity theft protection system.  Just remember, even if you do safeguard your personal information, identity thieves have many different ways of stealing your identity. Be diligent with your bank accounts and personal information and monitor everything closely.

My friend may never find how or who stole his identity or if criminal charges will ever be filed.  He does know that it is a long and tedious process to fix and that identity theft impacts you in many ways.  Stay on top of your financial transactions and make it a habit to keep your personal information safe.  I am truly sorry for what has happened to my friend and I appreciate that he shared this information with me and allowed me to share it with my readers.

Michael Camacho is president and chief executive officer of Personal Finance Center. He has more than 20 years of experience in retail banking and at financial institutions in Guam and Hawaii. If there is a topic you’d like Michael to cover, please email him at moneymattersguam@yahoo.com and read past columns at the Money Matters blog at http://www.moneymattersguam.wordpress.com.

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Signs that your identity has been stolen

This was originally published on Monday, July 1, 2013, in the Pacific Daily News.  Click here to subscribe to the PDN.

QUESTION: My next door neighbor just had his identity stolen. How can I protect myself from identity theft and what can my neighbor do to repair the damages that the identity theft created?

ANSWER: Identity theft is one of the fastest growing crimes in the United States. Technology has made access to our finances, work and socializing so much easier. Unfortunately it has also made us much more susceptible to identity theft. This month, I’ll be outlining ways to protect yourself from identity theft.

The United States Department of Justice defines identity theft and identity fraud as “types of crime in which someone wrongfully obtains and uses another person’s personal data in some way that involves fraud or deception, typically for economic gain.” Identity theft can cause serious damage to your credit, your job and even your reputation. Protecting yourself and your family should be a priority.

When we hear the words ‘identity theft,’ most of us think about credit cards, bank accounts and money. There are several different types of identity theft:

• Tax-related Identity Theft happens when someone uses a Social Security Number to get a job or for tax purposes.

• Child Identity Theft is when a minor’s social security number is being misused, usually to open accounts, apply for a loan or utility service, apply for government benefits or open a credit card.

• Medical Identity Theft occurs when health insurance numbers or a policy is used to receive medical attention, prescription drugs or file a claim with your health insurance provider.

• Criminal Identity Theft occurs when a crime is committed using another person’s name.

Signs of identity theft

Most people don’t know that they are victims of identity theft until it’s too late and the damage is quite extensive. Be aware of the signs that may indicate you’re a victim of identity theft:

• Your credit score is unusually low;

• Unauthorized withdrawals or purchases on your accounts;

• You’re not receiving mail, especially your bills;

• You’re receiving credit cards or bills for accounts that you never applied for;

• You receive phone calls from debt collectors about debts that are not yours;

• The IRS has informed you that more than one tax return was filed in your name;

• Financial institutions are denying you credit or only offering you high interest rates;

• Your credit report shows inaccurate personal information or unfamiliar accounts; and

• Medical providers bill you for services you didn’t use.

Michael Camacho is president and chief executive officer of Personal Finance Center. He has more than 20 years of experience in retail banking and with financial institutions in Guam and Hawaii. If there is a topic you’d like Michael to cover, please email him at moneymattersguam@yahoo.com and read past columns at the Money Matters blog at www.moneymattersguam.wordpress.com.

More options for saving for your retirement

This was originally published on Monday, April 15, 2013, in the Pacific Daily News.  Click here to subscribe to the PDN.

Gone are the days of retirement that most of our parents enjoyed. We can no longer expect our employer pension and social security benefits to get us through the golden years. Planning for retirement is necessary. Last week I discussed two retirement plans, IRAs and 401(k). Here are more retirement plans:

403(b) — Is a retirement fund very similar to a 401(k) but is available only to certain employees of public schools, employees of certain tax-exempt organizations, and certain ministers. To set up an account you must go through your employer.

Profit-Sharing Plan — Is a plan set up by an employer to give employees a sense of ownership in the company. The company decides what percentage of profit will be shared. Employees do not contribute to the plan only the employer. There may be penalties for early withdrawals.

Money Purchase Plan — Is a pension plan in which the employer and the employee make contributions. The contributions are based on a percentage of annual earnings. The employee’s benefits are based on the amount of contributions to their account, whether it is a gain or loss, at the time of retirement. In other words the employee is responsible for the amount available at retirement.

Employee Stock Ownership Plan (ESOP) — Is a plan that gives employees the opportunity to buy stock of their employing company. There are certain tax benefits that both the employer and employee share. This plan encourages employees to do what is best for the company’s shareholders since the employees themselves are shareholders.

Take advantage

If your employer offers a retirement plan you really should consider participating. Especially if the plan requires that your employer matches your contributions. Many retirement funds provide great tax incentives that may reduce your end of the year tax payments. The Internal Revenue Service website, www.irs.gov, offers more information on these plans. Know what your contribution limit is. If you can max out your contributions do so. It definitely will ensure a comfy nest egg when you retire.

Consider participating in more than one retirement plan. An investment mix that has a good balance between asset allocation and diversification is wise. Asset allocation spreads out your investment risk through various types of investments (cash, stocks, bonds, etc.). Asset allocation is a strategy that tries to balance your risk versus your reward. Diversification mixes a wide variety of investments to reduce risk within your portfolio which allows for a more stable performance of your money under different economic conditions.

Michael Camacho is president and chief executive officer of Personal Finance Center. He has more than 20 years of experience in retail banking and with financial institutions in Guam and Hawaii. If there is a topic you’d like Michael to cover, please email him at moneymattersguam@yahoo.com and read past columns at the Money Matters blog at www.moneymattersguam.wordpress.com.

Get started early on filing your taxes

This article was originally published on Monday, 04 February 2013 as the Money Matters article in the Guam Pacific Daily News (PDN).  Click here to subscribe to the PDN.

Question: This year I plan on starting early to prepare my 2012 taxes. Do you have any good tips that may help me?

I applaud you for starting early, many of us wait till the last minute to prepare and submit our taxes. Starting early will definitely reduce the stress of preparing taxes. It also gives you time to ensure that your taxes are done properly.

Some people think that they have to wait till April to start and submit taxes, when in actuality you can start preparing your taxes as long as you have your W-2 form from your employer as well as your bank, mortgage and investment interest statements. Although do note that because Congress passed new tax laws late in 2012 the Internal Revenue Service (IRS) will need some time to reprogram their computers to the new changes in the tax laws so there may be a slight delay before you can file.

Start organizing your records. Your employers and other financial institutions by law must send out tax-related documents by the end of January. If you have not received them yet it is a good idea to start asking questions. If you have received them, put them in an area where they are easily accessible and start making a file to keep all your tax-related documents together.

Start collecting your financial documents from the past year such as cancelled checks or receipts from charitable donations, work-related expenses, moving expenses, medical and dental expenses, real estate taxes, and daycare or childcare costs. Other documentation you may need are records from supplementary income such as rental income or alimony.

You may want to use a personal finance software program next year to be able to file and manage all the information you need next tax season.

Create a tax checklist. Having a checklist is a great way to know exactly what you need to start preparing your taxes. You can find a tax preparation checklist free online at the H&R Block and Turbo Tax websites. These lists are general lists and not everything will apply to you so just pick the items you need and disregard the ones you don’t.

Use the correct forms. Using the correct forms is very important. You may visit the local Department of Revenue and Taxation or the post office to pick up your forms. Don’t forget that forms also are available to you through the Internal Revenue Service website at www.irs.gov. They have a comprehensive list of forms and publications that you can search through and print right at home.

Michael Camacho is president and chief executive officer of Personal Finance Center. He has more than 20 years experience in retail banking and at financial institutions in Guam and Hawaii. If there is a topic you’d like Michael to cover, please email him at moneymattersguam@yahoo.com. To read past columns visit the Money Matters blog at https://moneymattersguam.wordpress.com.