CFS Identity Theft & Prevention 3 — Questions and Answers
Question 1: A fraudster calls a victim pretending to be an IRS agent and demands immediate payment using gift cards to avoid arrest. This is known as:
- Phishing
- Smishing
- Vishing (Correct answer)
- Pharming
Correct answer: Vishing
Vishing (voice phishing) uses telephone calls to deceive victims into revealing personal information or making fraudulent payments, often impersonating government agencies.
Question 2: What is the primary purpose of a credit freeze (security freeze) for identity theft victims?
- Improve the victim's credit score
- Prevent new creditors from accessing the credit report to open accounts (Correct answer)
- Dispute fraudulent accounts on the credit report
- Notify law enforcement of the identity theft
Correct answer: Prevent new creditors from accessing the credit report to open accounts
A credit freeze restricts access to a consumer's credit report, preventing lenders from pulling the report and thus blocking new account opening in the victim's name.
Question 3: Under FACTA, consumers are entitled to place an initial fraud alert on their credit file, which remains active for:
- 30 days
- 90 days
- 1 year (Correct answer)
- 7 years
Correct answer: 1 year
FACTA as amended by the Economic Growth Act provides that an initial fraud alert remains on a consumer's credit file for one year.
Question 4: Which of the following best describes 'account takeover' identity theft?
- Creating a new account using stolen PII
- Gaining unauthorized control of an existing victim account (Correct answer)
- Using a deceased person's identity to obtain credit
- Combining real and fake information to build a credit profile
Correct answer: Gaining unauthorized control of an existing victim account
Account takeover involves a fraudster gaining access to and controlling an existing legitimate account, often by changing contact information to prevent victim notification.
Question 5: The FTC's IdentityTheft.gov website is the official resource for victims to:
- File criminal charges against identity thieves
- Obtain a free credit report
- Create a personalized recovery plan and dispute letters (Correct answer)
- Freeze their Social Security number
Correct answer: Create a personalized recovery plan and dispute letters
IdentityTheft.gov guides victims through creating a personal recovery plan and generates pre-filled dispute letters for creditors, debt collectors, and businesses.
Question 6: When investigating identity theft, a fraud examiner should obtain which document as a foundational step in the victim's recovery?
- A restraining order against the suspect
- An Identity Theft Report combining an FTC affidavit and police report (Correct answer)
- A court order vacating fraudulent accounts
- A credit bureau suppression notice
Correct answer: An Identity Theft Report combining an FTC affidavit and police report
An Identity Theft Report, combining an FTC Identity Theft Affidavit with a police report, is the key document creditors and credit bureaus require to investigate and remove fraudulent information.
Question 7: Child identity theft often goes undetected for years primarily because:
- Children cannot file fraud alerts
- Children's Social Security numbers are rarely monitored for credit activity (Correct answer)
- Federal law prohibits credit checks on minors
- Creditors are not required to report fraud involving minors
Correct answer: Children's Social Security numbers are rarely monitored for credit activity
Since children do not have credit histories that are actively monitored, fraudsters can exploit their clean SSNs for years before the victim discovers the theft, often upon turning 18.
CFS Identity Theft & Prevention 3
A fraudster calls a victim pretending to be an IRS agent and demands immediate payment using gift cards to avoid arrest.
This is known as: