In today’s article, Intersections’ Consumer Security Adviser, Neal O’Farrell shares some important tips to keep us safe during the upcoming tax-filing season. April 15th may be several months away, but it’s never too early to protect yourself!

I don’t normally start talking about tax time identity theft this early, but if you want to prevent someone else from grabbing your refund before you do, early filing is essential. That’s the advice I recently gave to one victim who found that every member of his family had their identities compromised, as a small ring of thieves did everything they could – from applying for mortgages to opening new credit cards – as soon as they got their hands on the stolen information.

And at this time of the year, one of the first things a thief will do with a stolen identity is concoct a fake tax return and submit it using the victim’s identity. When the victim files their own return, the scam is exposed, leaving the victim without a refund they might have been relying on to pay important bills. And the IRS can take up to a year or more to investigate the fraud and issue a new refund. If they issue a new one at all.

And it’s not just the living who are victimized. In 2009, the IRS issued more than $12 million in tax refunds to 5,000 dead people, part of a variety of scams using the identities of the dead to defraud the IRS. And that impacts us all. Not only does it deprive us of money that belongs to taxpayers, it consumes a huge amount of time processing these fake returns, investigating the frauds, and trying to recover the funds.

According to a recent story by Bloomberg, the IRS is woefully unprepared to investigate fraudulent returns. Bloomberg cited a government watchdog that claims the IRS does not have the funds to identify potential identity theft and investigate suspicious tax returns. It said that last year the IRS identity theft caseload grew by 20 percent to more than 226,000 and that the number of tax returns the IRS decided needed additional screening for possible fraud exceeded 1 million, a 72 percent increase over 2010.

And this is what thieves are preying on. I’ve written a few times about Operation Rainmaker, a stunningly-successful scam in Florida last year where street level drug dealers turned to IRS-related identity theft and were able to scam the IRS out of more than $130 million in bogus tax refunds.

The scam took advantage of the fact that because of budget and manpower issues, the IRS rarely investigates tax refunds of less than $10,000. So the drug dealers learned how to steal identities and prepare tax returns, and were quickly able to earn millions from the scam. A scam that was not discovered by the IRS but by a local employee who became suspicious of all the text refunds going to the same addresses.

There are some things you can do to protect yourself and your refund:

• File early so you get your refund before the thieves do.

• Choose your tax preparer carefully. There seems to be a worrying uptick in recent years in the number of tax preparers stealing or abusing the identities of their clients.

• Be wary of any emails or even phone calls you receive claiming to be from the IRS. They rarely call and they never email.

• If you plan to mail in your return, take it directly to the post office to reduce the risk of mail thieves intercepting it.

• If you can, have your refund deposited directly to your bank account so that your refund check is not intercepted by thieves.

• If you file online, make sure your computer is free from malware. You should be doing this anyway.

• If you think your Social Security number has been compromised or exposed, call the IRS identity theft hotline and ask them to place a red flag on your Social Security number. You can call the IRS Identity Protection Specialized Unit, toll-free at 1-800-908-4490

Learn more about identity theft protection.

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Although Santa has come and gone, it’s never too early to start a wish list for the New Year. So today, Intersections’ Consumer Security Adviser, Neal O’Farrell shares his security wish list for 2012.

Another year over and a new one is just about to begin, but hand it to hackers to spoil all the fun. As we look back on the year that was, and try to predict what lies for us in the year ahead, it might be a good time to think and talk about all the things we’d like to change so that the bad guys don’t win more than they have to.

With that in mind, I’ve put together a wish list of just some of the things that I’d like to see happen – things that would protect consumers and make life easier for victims.

1. Consumers could take the threats more seriously and get more involved in their own protection. We know from experience that the majority of security incidents could be avoided if consumers were more vigilant, more involved, and more willing to change the bad habits that often get them in trouble.

2. Stop using zero liability as a safety net. Consumers make the mistake of assuming that zero liability means zero loss or zero responsibility. As any victim will tell you, zero liability leaves a lot to be desired and often leaves the victim on the hook for costs they never anticipated.

3. Banks should play a greater role in educating and alerting their customers. Banks are in the best position to educate and information their customers about security risks, and alert them to the latest threats. But most financial institutions would prefer to say as little as possible about security in case it makes their customers worry.

4. The IRS, Social Security Administration and other government agencies should be more sympathetic to the plight of victims and change their practices. I hear so many horror stories of identity theft victims whose Social Security number is being repeatedly misused and abused by crooks, and in many cases it’s because the Social Security Administration has few resources to help in such cases.

5. Law enforcement should be more aggressive, especially when it comes to taking victim reports and sharing intelligence. One of the many worrying trends in identity theft is the evolution of super thieves – low level crooks who are never arrested or get into any law enforcement database, and so go unchallenged and undetected for years. Which gives them plenty of time to practice and get much better. By the time law enforcement spots them, they’re too good to be caught.

6. Data breach laws should focus on the needs of the consumer and not the breached company. Too many of the proposed laws focus on the needs of business rather than the impact on consumers.

7. Consumers should watch their credit reports more carefully – I still come across consumers in their 50’s who have never checked their credit reports and don’t know how.

8. Accelerate the move to chip-and-pin cards. This should help slow down the surge in skimming attacks that take advantage of the vulnerabilities of traditional magnetic stripe cards.

9. More consumers using credit cards instead of debit cards. As recent skimming attacks have shown, a debit or ATM card provides direct access to the victim’s bank account. And while stolen funds may be replaced, it might not happen fast enough for the victim to pay urgent bills. Credit cards shift the loss and responsibility on to the financial institution.

10. Faster move to authentication systems to replace passwords. I wrote in a recent blog that IBM believes the password will be a thing of the past within the next five years. And that’s not fast enough for me. There are better ways for users to identify and authenticate themselves, and the sooner they become more practical and effective, the better for security.

11. More security awareness training for employees. Because so many security incidents and breaches are as a result of preventable mistakes by employees, the only remedy is better employee security awareness training. In spite of the fact that it’s one of the cheapest security tools available, most employees receive little if any security training. Which means we’re likely to see more data breaches that result from busy employees making predictable but preventable mistakes.

12. And finally, I’d love to see the creation of a national database of compromised Social Security numbers. Because Social Security numbers can rarely be changed, once an SSN is stolen the victim faces a lifetime of fraud and worry. A national database of compromised Social Security Numbers could significantly cut down on the number of times a stolen Social Security Number is abused.

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Here are some frightening statistics concerning child identity theft.

• Children are 51 times more likely to have their identity stolen than adults
• The average debt of child identity theft victims is over $12,000
• 70% of thieves use child ID for credit card/loan fraud, while 23% use it for mortgage/utility fraud.

Check out our infographic – how much is a child’s identity worth.

Protecting your children is more important than ever. Learn more about child identity theft protection.

In a recent report by the firm ID Analytics, more than 140,000 children across the United States were found to have been victims of child identity theft. The report supported other studies that have found the same troubling trend, as well as a growing awareness in the cybercrime community of the value of child identities and the ease with which they can be compromised.Today, the Daily Shield welcomes Steve Schwartz, Intersections’ Executive Vice President, Consumer Services. In today’s video presentation, Steve shares some thoughts on how parents can help protect their children from identity theft. It starts with parents understanding how and why their child’s personal information is used by schools, at the doctors office, etc.

Learn more about the growing problem of child identity theft and what you can do about it.

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We have written about the growing problem of child identity theft. So today, we have taken an important step in the fight against child identity theft with the launch of our child identity theft protection service kID Sure(sm). In our video today, Intersections’ product manager Lindsey gives us an overview of the kidSure service and how it works.

Learn more about kIDSure.

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In a recent report by the firm ID Analytics, more than 140,000 children across the United States were found to have been victims of child identity theft. The report supported other studies that have found the same troubling trend, as well as a growing awareness in the cybercrime community of the value of child identities and the ease with which they can be compromised.Today, the Daily Shield welcomes Steve Schwartz, Intersections’ Executive Vice President, Consumer Services. In today’s video presentation, Steve shares some thoughts on the growing problem of child identity theft.

Want to learn more about identity theft protection and our credit monitoring services?

Keep informed about the latest threats to your safety. Join our Facebook group.

Intersections’ Consumer Security Advisor Neal O’Farrell shares 10 things you should know about your social security number in today’s post on the Daily Shield.

1. The Social Security number was never designed to be a secret or a method of identification. The financial industry changed all that, which in many ways has created the national problem of protecting Social Security numbers.

2. It’s theoretically possible for thieves to figure out your Social Security number if they already know where and when you were born.

3. Thieves are especially interested in the Social Security numbers of children. The financial and credit systems are unable to tie an age or date of birth to a Social Security number, so there’s little to prevent thieves from using these numbers. And because most kids won’t actually start using their own Social Security number until adulthood, thieves can get away with abusing stolen numbers for many years.

4. While it’s possible to change your Social Security number to minimize the long term impact of identity theft, it’s actually very difficult. Not only can it impact your credit history and still connect you to your old Social Security number, the Social Security Administration seems very reluctant to help identity theft victims change their number.

5. On the black market your Social Security number is the hottest commodity, because to thieves it represents the “keys to the kingdom.” Yet in spite of that, your Social Security number may be worth less than $20. Why? One suggestion is that prices are being driven down because there are just so many stolen Social Security numbers in circulation.

6. According to MSNBC, in 2007 the IRS estimated that 6 million undocumented workers paid federal taxes and that according to the Social Security Administration, nearly 10 million workers pay taxes each using the wrong SSN, whether deliberately or by mistake.

7. According to a study last year by ID Analytics, an estimated 20 million Americans have multiple Social Security numbers associated with their name, 40 million SSNs have been attached to more than one name or person, and 3 to 4 million SSNs have been used to commit identity fraud.

8. It may not be a crime for someone else to use your Social Security number. In 2010 the Colorado Supreme Court ruled that it was not a crime for someone to use another person’s Social Security number as long as they used their own name and not the name of the person to whom that Social Security number belonged.

9. Forget about stealing your Social Security number, how about renting it. Organized crime gangs routinely rent Social Security numbers to illegal immigrants, undocumented workers, and even criminals, who use them for a short time and then dump them for a new number.

10. It’s still legal for businesses to sell Personal Information Profiles (or PIPS) that include the Social Security numbers of children. The businesses typically sell them online ostensibly as a way for others to run credit checks, but in reality they’re sold to people with bad credit who use the personal information of complete strangers to apply for new credit, then dump the credit profile when they’re found out.

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In today’s edition of the Daily Shield, Intersections’ Consumer Security Advisor Neal O’Farrell explains why your Social Security Number might be easier to predict than you think!