Identity Theft & Fraud

In case of emergency…

I did a talk last week about financial organization. We all know that we need to keep our financial paperwork in order but sometimes we forget the basics.

The first step is to know what is in your wallet or purse. If I were to take your wallet away from you right now, could you tell me what’s in it? All of it? Most people can tell me most, but not each and every item.

Why is this so important? If you lost your wallet or purse, could you quickly call to cancel your credit cards and replace each and every item? Probably not! Did you know that the sooner you cancel your credit cards, the less liable you are for purchases made in your name?

Take an inventory of everything in your wallet or purse. Start with your credit cards. I suggest that you make a copy of the front of each card. Make sure to write the toll free customer number for each card on the copies you made (that number is found on the back of the card). You should also make copies or keep records of other items in your wallet that you will need to cancel or replace. That could include your driver’s license or any club cards you might have. Make copies of those as well, or create a list. Then keep these copies in a safe place where you can easily find it. I’ve spoken before of having two copies in case of a home disaster like a fire or flood. You might want to keep one copy in a locked home safe and one copy in a safe deposit box at your bank.

Keeping a record of what is in your wallet or purse is one step towards financial organization. Do it this week to be prepared in case of an emergency.

The Winning Prize Scam

Right now, people are struggling with their finances. Some are looking for easy solutions and that is where the scammers come in.

The “winning prize” scam typically starts with a notice that you have won a sum of money. This should be your first clue, since you probably haven’t entered any contests. If you follow the instructions, you will eventually receive a check in the mail for a few thousand dollars. You are instructed to deposit that check into your bank account and wire a “prize fee” to the sender. For example, if you get a $3,000 check, you may be asked to wire $2,500. Do you think you’ve won a $500 prize? Think again!

After you send your money, you will discover that the check they sent you is no good. Not only are you out the money you paid them, but you are liable for all the bank fees associated with depositing a bad check.

I can’t tell you this strongly enough – when you win something, you will NEVER have to pay fees. You should never be asked to give up any money in advance or ever. A legitimate win will be subject to taxes – but those would be paid with your tax returns. If you are contacted, be cautious and never give any money in advance to receive a prize.

Do-It-Yourself Identity Theft Protection

Have you received a letter from your bank or credit card company lately telling you that your personal information may be compromised? We’ve been getting these letters on a regular basis at my house. If you read further, you’ll see that these companies are trying to sell you identity theft protection for a monthly fee. It’s a good idea to guard against identity theft, but buying protection is not the most cost effective plan for your personal finances.

You can monitor your own credit and stop identity theft for minimal money. Simply put a credit freeze on the credit reports offered by the three major credit reporting agencies. A credit freeze prevents anyone from accessing your credit report (including you). If someone is trying to open a new credit account in your name, potential creditors will not be able to access your credit report. Creditors don’t give out new credit without it, so the thief will be stopped in his tracks.

How do you freeze your credit report? Contact all three credit reporting companies and pay a small fee to freeze your credit report. No one, including you, will be able to access your credit. That means if you want to finance a car, you will be denied since the potential creditor cannot access your credit. Don’t worry – you can unfreeze your credit for a fee when you need to.

Bottom line: The cost to freeze and release the freeze is substantially cheaper to you than the $10 plus dollars a month for credit monitoring. Credit freezes can stop new accounts from being opened by thieves even when they have your personal information. The only effort required on your part will be planning for your upcoming credit needs so you can freeze and unfreeze your credit accordingly. How often do you need to open a new credit account? Most of us do it very rarely, so it’s easy to plan ahead.

Guarding your personal information

I have been double checking my personal information and making sure that I have opted out with the companies I am dealing with That got me thinking about what happens to my information when a company closes.

So I started to do some research and don’t seem to find any answers I wanted When a company is open and they have your personal non-public information on file (name, address, account number, checking account number etc) most companies are required to comply with the Gramm Leach Bliley Act to protect your personal information They are required to disclose to you what they do with your personal non-public information Then you have the right to opt out so that they don’t share your information with non-affiliated third parties.

With that said, what happens when that company closes? Not much Recently a company that had your personal non-public information on file to expedite you clearing airport security closed There don’t appear to be any requirements of what to do with all the information they have on file.

At this point, the only thing you can do is to check your credit report and accounts on a regular basis to give yourself piece of mind.

Checking for counterfeit bills

In these challenging economic times and with technology being readily available, counterfeit money is in circulation In 2008, $64.4 million was in the US economy.

How to check if your bills are real? According to the US Secret Service, you should be looking for the differences between the same denominations of bills Check the portrait, the Federal Reserve and Treasury seals, border, serial number and the paper If you think the money is not real, refuse to accept it Ask for another bill If the bill is real, the person who has possession can easily exchange it at their bank.

Older bills, before 1996 are still in circulation and do NOT have these new security features and therefore may seem counterfeit to you Older bills are harder to detect Again, you simply refuse to accept them when receiving money.

Counterfeit bills are out there everywhere The person who possesses the counterfeit money is the person who loses So if you accept counterfeit bills and attempt to use them, it’s your loss (regardless of where you got them from) Check your change before you accept it to be safe.

Check Your Phone Bill for Fraudulent Charges or "Cramming"

You may have unauthorized charges on your phone bill.

Phone bills can be confusing There are various services charges and taxes associated with using a phone number You may be tempted to ignore the fine print However, I suggest you check your phone bill carefully Circle any charges you don’t understand and call your phone company for an explanation You may be a victim of “cramming.”

What is cramming? According to the FCC: “Cramming is the practice of placing unauthorized, misleading, or deceptive charges on your telephone bill Crammers rely on confusing telephone bills in an attempt to trick consumers into paying for services they did not authorize or receive, or that cost more than the consumer was led to believe.”

Could cramming happen to you? Yes Here are two common examples:

1 You signed up for a new phone service because they offered a low monthly fee However, you weren’t told that common services, like texting or long distance, weren’t included in the fee and you’d be charge extra for each message.

2 You used your phone to donate money to the earthquake in Haiti They said it would be simple and the charge would appear on your phone It did But then you find a new recurring “membership” fee on your account after that donation That’s a classic example of “cramming.”

Here’s the bad news Unlike a credit card company, you cannot contact your phone provider and dispute the charge Typically, the phone company refuses to get involved and you are left to fight this on your own.

So what are you supposed to do? You can contact your phone company to request to block third party charges on your phone bill Once you do this, you can no longer authorize charges either, so texting donations is out It’s an all or nothing option

You should be aware of your bills and look at them closely for anything unauthorized and take appropriate action Do you remember the telephone days of Ma Bell and the breakup back in 1984? Before the breakup, there was only phone company and charges were easy to trace Shortly after the breakup, it was still easy to track your charges because you were billed on one statement regardless of how many companies you used Those days are over Today, you need to carefully review your phone statements to protect yourself against fraud.

For more information on cramming, visit the FCC at www2.fcc.gov/cgb/consumerfacts/cramming.html

Paying by Check Puts You at Risk

When you want to make a purchase with the money in your checking account, do you actually write a check or do you use a debit card I am not talking about paying bills, which is relatively safe I’m talking about making a purchase at a store or a garage sale.

I recently read that some retailers no longer accept checks as a form of payment At first I thought this was strange, but then I realized that I couldn’t remember the last time I wrote a check at a store I haven’t carried my checkbook with me since I had my purse stolen years back It was a bad experience Did you know that your account number and bank routing number are clearly printed on each check? Not to mention your name and address That’s too much information Instead, I use cash and my debit card It’s easy and more convenient.

When you use a debit card, you give away less personal information No one can see your home address or your phone number Your driver’s license number isn’t written down for all to see You might think, “well it just goes in the register and then off to the bank.” But, that’s not the case If you’ve ever worked retail, you know that closing can be chaotic, with open registers and multiple people accessing each register as they balance the sales for the day Then, your personal information goes to the store office, to bank personnel, and then to the check clearing house They all have access to your information And, I’m not even getting into the computer systems that store this information and what can happen with that Who knows if one of them is taking your information for some fraudulent purpose?

The less people who see your information; the less chance of identity theft We all need to do our part to keep our personal information safe.

Credit Card Shaving is Cut and Paste Fraud

Credit Card Shaving – it sounds like what you would say if you were cutting back on your credit cards, but that’s not what it means. This is the latest credit card scam and there is nothing you can do to prevent it. Isn’t that scary?

Credit Card Shaving Q & A

How do they get your credit card number? They get it through guesswork, not by theft. The thief makes a random list of 16 digit numbers. Then he tries to make purchases online with different combinations. If one works, then he knows he has a legitimate account.

Why is it called “Credit Card Shaving?” The thief literally shaves the raised numbers off of other credit cards (usually cheap gift cards) and glues them onto a new card in the correct order. The card looks legitimate. He can even use his own ID to prove the card is his.

How does he change the magnetic strip? The thief doesn’t need the magnetic strip, he just “scores” or scratches it so it can’t be used in the automated stripe reader. This forces the cashier to manually enter the numbers that are glued to the card.

What can you do about it? Always monitor your accounts. Check statements for unusual purchases. If you can access your accounts online, you can check more often.

Is it time-consuming to monitor your accounts? We treat credit cards like pre-approved micro-loans, or feel they’re safer than carrying cash because they can be canceled if stolen. In reality, the more cards you have, the more work is required to watch over them.

Your Password is Easy to Guess

If you do any type of online financial transactions, whether you shop online, pay bills, or manage accounts, then you need good online passwords and you need to change them often. Here are some Do’s and Don’ts:

Don’t use passwords that are easy to guess like “welcome,” or “abc123.” And, don’t use passwords that are easy to research, like birthdays, phone numbers or addresses. It should be impossible for people to guess your password just by knowing you.

Do use a random combination of numbers and letters (both upper and lower case). Don’t use some personal association that’s easy to remember, because, no matter how clever you think you’re being, it will probably be easy to guess. You can learn to memorize a random number. After all, you know your phone number and social security number, and those are random.

Do change your passwords often. There are actually services out there that will steal your email password for a fee. They market themselves as private investigators, catching cheating spouses or business partners. If you use the same password for all your accounts, this puts you at great risk. Changing your password often won’t stop hackers, but it will make their work more difficult and expensive.