If you are one of the many Americans with an offshore bank account with UBS, the largest bank based in Switzerland, your name may be among those reported to the IRS. UBS has admitted that the bank has been conspiring to defraud the United States and the Internal Revenue Service. The bank will pay $780 million to settle the case. From 2002 to 2007, Americans hid a total of $20 billion from the IRS and avoided paying $300 million each year in taxes.
In exchange for protection from indemnity for the bank’s senior executives, UBS is turning over a small percentage of identities from the 19,000 bank accounts under investigation and closing the accounts of its American clients.
The tradition of secrecy within Swiss bank accounts apparently dates back to the Middle Ages.
A Swiss Bank Is Set to Open Its Secret File, Lynnley Browning, New York Times, February 18, 2009.
If someone successfully applies for a loan or a credit card using your identity, there will be a big mess to clear up. I don’t want to downplay the hassle, there. I would be extremely annoyed if that happened to me.
However, what we hear on the news and especially in commercials for services like LifeLock (lots of lawsuits) and FreeCreditReport.com (misleading at best) is inundating us with fear that it’s almost a given that it will happen to us. The truth is, financial identity theft becomes less likely to happen to any one person with each passing year. From Wikipedia:
Identity theft complaints as a percentage of all fraud complaints decreased from 2004-2006. The Federal Trade Commission reported that fraud complaints in general were growing faster than ID theft complaints. The findings were similar in two other FTC studies done in 2003 and 2005. In 2003, 4.6 percent of the US population said they were a victim of ID theft. In 2005, that number had dropped to 3.7 percent of the population.
When listening to people tout statistics, keep in mind also that “identity theft” is a broad category that includes financial identity theft. They’re both awful, and I hope it never happens to you, but you don’t have to feel like forking over $10 a month for identity theft protection is necessary. You certainly don’t want to publish any sensitive information in the newspaper like Jeremy Clarkson did, but you should be fine with shredding anything that has, say, a promotion code, or your name already printed on it.
Here’s an excellent resource from the FTC.
And incidentally, why do the FreeCreditReport.com commercials hinge on the fact that if my credit is compromised, I won’t be able to get a good job? What does my credit report have to do with my résumé?
I mentioned last week that my Citibank credit card was suspended and the issuer supplied me with a new credit card number. At the time, I assumed that this was due to my recent traveling, which might have raised red flags in Citibank’s fraud detection algorithms. A number of visitors suggested calling your credit card in advance of any travel to warn that charges from another area should be considered legitimate.
That is excellent advice, and I should remember to do that in the future. However, it wouldn’t have helped in this case. I was able to get a little more information out of Citibank. It seems that a merchant experienced a security breach jeopardizing the privacy of a customer database. They wouldn’t say which merchant was affected, but they solved the problem by issuing new card numbers to all members.
After I received and activiated my new card, I was able to view my transactions online. I was happy to see that my credit card number had not been used by anyone other than myself. I’ve only started the process of contacting utilities and other services which automatically bill my credit card each month. So far, the process of updating my account has been smooth thanks to the ability to perform most of this maintenance via the web.
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