A Twitter chat with Federal Trade Commission (FTC) officials for National Consumer Protection Week generated questions that highlight timely issues.
We asked tweeters to give us the number one tip for consumers to protect against identity theft when you file taxes.
The FTC recommends you file taxes early. At first, the recommendation sounded strange. But there’s a logic to it that also reveals what a crazy time we live in. FILE TAXES EARLY TO AVOID FRAUD It’s a kind of race to stake your claim. The longer you wait to file, the easier it is for someone who steals your identity to file in your name and steal your income tax refund. And it happens more frequently than we’d like.
Tax refund theft is one of the top identity theft-related crimes. If someone gets hold of your Social Security number and files a return before you, they get the refund and then good luck tracking them down.
TIP 2: Take when you choose a tax preparer. The Central Texas Better Business Bureau also participated in the Twitter conversation and recommends that you choose a tax preparer carefully. Some shady preparers work with other thieves and identity theft rings. The BBB recommends that you:
- Look for credentials and choose a CPA.
- Be wary of big refund promises from tax preparation services.
- Make sure your tax preparer is available all year long.
- Read your contract with the preparer carefully so that you know exactly what the service will cost.
It isn’t easy for law enforcement officials to locate identity thieves, many of whom work outside of the United States.
The FTC told us it works with international partners, and we’ve reported about prosecutions especially of thieves based in Canada. But it is difficult for law enforcement to stay on top of white collar bad guys.
ADVICE FOR PROTECTING YOUR IDENTITY Don’t carry your Social Security card. Don’t give out your Social Security number. Shred your documents.
Check your credit report to make sure that no one is using your identity to open phony accounts. You can do this for free three times a year at annualcreditreport.com.