What do you know about Identity Theft?

With the recent news about Target and Neiman Marcus getting their customer records hacked, we thought it was the right time to focus our blog on identity theft.  

Today we present some important statistics about identity theft. As you read some of these frightening numbers, I hope you will take some extra time to consider what you and your family are doing to prevent yourselves from being victims. 

Recent Identity Theft Statistics

Compiled from the FBI and U.S. Bureau of Justice Statistics 

·         As many as 12 million Americans are victims of identity theft annually. That’s over 32,000 victims per day.  

·         About 15% of ID theft victims don’t find out for four years.   

·         85% of incidents involved the fraudulent use of existing account information, such as credit card or bank information.  

·         Nearly $250 billion a year is lost by businesses who are victims of identity theft.  

·         14% of victims experienced an out of pocket expense of >$1. About half of those experienced losses of more than $100.  

·         On average, a victim of identity theft will lose between $2,000 and $14,000; victims will subsequently spend an average of $851 to $1,400 in expenses related to their case.  

·         If 14% took losses of some sort, then 86% were victimized and had to have, at minimum, a new checking account and/or a debit or credit card re-issued for them. The costs of these replacements are generally born by the financial institution.  

·         Over 50% of victims have most of their issues solved after 24 hours. About 29% spend about a month resolving problems.  

·         The total average of time spent repairing the damages realized through identity theft is approximately 330 hours.  

·         50% of identity theft victims experience trouble getting loans or credit cards as a result of identity theft.  

·         20% of victims will experience higher credit card rates, while 16% of identity theft victims have higher insurances rates because of the theft.  

·         72% of identity theft victims will have trouble resolving or terminating the negative information left on their credit reports or other information left on their personal records.

WHAT TO DO IF YOU'RE A VICTIM OF IDENTITY THEFT

Step One: Contact the fraud department of the three major credit bureaus

·    Experian (TRW) 888-397-3742

·    TransUnion 800-680-7289

·    Equifax 800-525-6285

Step Two: Contact the account issuer in question

·    Ask for the fraud/security department of the compromised or fraudulent account issuer.

·    Notify them by phone and in writing.

·    Close all tampered or fraudulent accounts.

·    Ask about replacement cards.

Step Three: Contact your local police department

·    Notify the police department in the community where the identity theft occurred.

·    Obtain copies of all police reports made.

Keep a detailed log of all contacts:

·    Location called.

·    Name of person(s) you spoke to.

·    Title and call back number with extension.

• Ask and write down what the procedures are for that entity.

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The Credit Myths Workshop provides you with information on the top ten myths of managing credit. Join us to bust some myths and catch up on the latest methods of managing and protecting your personal credit.  

Our next FREE Credit Myths financial education workshop will take place:

January 22^nd 6:30 pm 

Meriwest Credit Union Main Office Training Room

5615 Chesbro Ave

San Jose CA 95123 

To RSVP, please contact Greg Meyer at gmeyer@meriwest.com or 408-365-6328

Electronic Money – The World has Changed

There once was a time that “Cash was King.” It was acceptable in any transaction up to any amount. When buying a car back in the day, someone might take more than ten thousand dollars with them to pay for the transaction. Paying debts with large amounts of cash was not uncommon. In the 1940’s and 1950’s, there were only three ways to pay for something; cash, check, or a wire transfer. The popularity of charge cards had not begun.

In the 1960’s charge cards or credit cards became a normal part of our financial world. Now we had a fourth way of paying for our wants and needs; a credit card. “Buy now and pay later” was the motto of many back then. It was a popular option for those with limited cash, as credit cards allowed them to purchase expensive items and pay for them at a modest interest rate over time. Credit cards changed the way we looked at cash. Cash dollars were no longer a necessity in a transaction.

The 1970’s and the introduction of the ATM was what really set us on the path to electronic money. An ATM made it possible for someone from out of town to get cash from their account without having to write a check and show several forms of ID to get it cashed. They could go to the ATM of the nearest bank and, for a small fee, access their account and get up to several hundred dollars from their account. They did not have to go to the ATM of their bank. Banks would exchange the money electronically between them to settle the transaction.

After the ATM card, came the ubiquitous debit card. The debit card was originally created by a Frenchman, Roland Moreno, in 1974. EFT/POS (Electronic Funds Transfer/Point of Sales System) or the debit card system as it is popularly referred to, changed how we all exchange money for goods and services. Suddenly, if we had the cash in our account, we could pay for any item if the merchant accepted EFT. Cash money was no longer a required part of monetary transactions. In 2011, only 27% of transactions were of the cash type and it is expected to drop to 23% by 2017. Another number that is expected to drop is the use of paper checks for payments; only 7% of transactions in 2011 involved a paper check.

There are convenience stores and other markets that are refusing cash and moving to 100% EFT transactions. Considering that merchants must pay a small fee for each transaction, why are we going to 100% EFT?

For years, checks were the way we paid for things when we did not have the cash readily available. That system worked just fine but it had pitfalls. What were the dangers of accepting a check?

·         It took several days for a check to clear. Prior to electronic check clearing in the late 80’s, it took even local checks seven days to properly clear. An out of state check would take two weeks !

·         We never knew if the money to pay the check would be available on the date the check cleared.

·         Once the check “Bounced” back to us, it would take a couple of days to get the check back to us. Taking time away from recovering on the bad check.

Checks could be stolen, duplicated, or altered. If a merchant took a bad check, the merchant paid for it and took a loss. With electronic transactions, particularly with PIN style transactions where the accountholder must enter their PIN code in order to complete a sale, it gives the merchant much more confidence that the person processing their transaction is not a fraud. Electronic transactions reduce the amount of fraud losses for merchants.

In a few years, paper checks will be a thing of the past!

Happy Holidays to everyone! Stay safe this season.

Financial Self Defense - ID Theft and Technology

 A recent study put together by The Javelin Group has some disturbing findings: The incidence of identity theft in 2012 was up 13 percent, compared to the previous year. The total amount stolen was about the same, but the thieves successfully scammed more people.

Facebook, Google+ and LinkedIn users take heed: The study found that there were specific factors that put social media users at elevated risk of getting scammed:

• 68 percent of social media users publicly shared their birthday.
• 63 percent shared the name of their high school.
• 18 percent shared their phone number.
• 12 percent shared their pet's name.

All of the above information represents the kinds of things a company would use to verify your identity, according to the study's authors. In some cases, scammers have been known to bluff their way through customer service representatives to get access to other important information - and even wipe out entire accounts. When young or vulnerable people share this information, it could make them more susceptible to stalkers or sexual predators.

The Smartphone Factor

The study also found that smartphone users were a third more likely to be victims of identity theft than non-smartphone users. This doesn't mean, necessarily, that smartphones are to blame. But it does seem to indicate that the people who use smartphones are doing something to make them more vulnerable or attractive to scammers.

What can you do to avoid being a victim?

• Password protect your phone.
• Don't use credit cards for Internet transactions over public networks. Thieves have "sniffers" that can extract that data.
• Don't store credit card numbers or bank account information on your laptop.
• Use different passwords for mobile banking apps on your phone than passwords you do for your phone and email.
• Promptly report any suspicion that your sensitive personal information has been compromised.
• Keep documents that list Social Security numbers off of your laptop, or encrypt that data if you do store there.
• Keep private information private. If any company uses specific information about you to verify your identity - your mothers' maiden name, pet names, birthdays, etc., keep it off Facebook and any other social media site.

Tip:

Is your mother on your Facebook page? Does she use her maiden name? You are vulnerable.

Pro tip: If your mother is on your Facebook page, and you share your date of birth, you are a prime candidate for ID theft.

  

Preventing ID Theft

Preventing ID Theft is not difficult. Some may have you think that you have to see your credit report on a daily basis to be safe. They appeal to the very paranoid among us with offers of free 24/7 access to your credit report for a nominal monthly fee. Does 24/7 access to your credit report really prevent ID Theft? NO. It does not prevent anything. It does not stop anyone from using your credit card number. It does not stop computer hackers from accessing your PC through the internet. It does not stop anyone from stealing your wallet and using your identity.

Being able to view your credit report on a daily basis only gives you warning AFTER someone has committed an identity crime. By the time an identity thief has built a credit account in your name and it has posted on your credit report, the damage is already done. At that point you need to file a complaint with your credit card issuer and file a fraud hold with the credit reporting agencies.

There are some things that are very difficult or even impossible for you to prevent, such as a hacker accessing your personal data from a third party’s files or if someone placed a debit/credit card skimmer at your favorite gas station or market. Both of these issues have happened to me. I have been hacked and skimmed. In both instances, I found out at least 60 days after the fact. That’s an awful long time for someone to have my data and, luckily, nothing happened. My financial institution took action as soon as they knew about it and cancelled and replaced my Debit Card each time. Not everyone is as lucky as I was.

Some of the best ID Theft prevention can be done right in your own home. Having solid anti virus protection and a good internet firewall solves a myriad of issues. For a lot of people, the firewall that is included in Windows does the job. If you are an “at risk” websurfer, meaning you wander off the regular beaten internet pathways, you might want to have something stronger than the Windows version. There are a lot of good commercial firewalls and anti virus programs available and some can be had for free.

A lot of ID theft happens when someone’s wallet or purse is stolen. Even in a paperless world, there are a lot of important papers and cards in our wallets and purses. How do we protect our cards if our wallet is taken? One simple fix is to take a permanent marker and write, “Ask for ID” in big block letters on the back of all of our credit and debit cards. Not all clerks at check out counters will check identification, but with this on the back of your card, you will see an increase in the number of stores that ask for it.

If you are notified of an ID Theft situation on your cards where your personal info is compromised or suspect it has happened, you can take some actions to prevent further losses. The first thing is to check your credit report for any recent activities that might indicate someone has your information. Go to WWW.AnnualCreditReport.com to access a copy of your credit report from all three credit bureaus. Check each report for suspicious entries. If you don’t see anything but still suspect something may come up in the near future, please contact the three major credit bureaus and place a 90 day Fraud Alert on your account.

• Equifax: WWW.Equifax.com or 800-525-6285;
• Experian: WWW.Experian.com or 888-397-3742;
• Trans union: WWW.Transunion.com or 800-916-8800

Make sure the bureaus have your proper contact data. If anyone tries to use your credit in the next 90 days without your knowledge, you will be contacted by your bureau to verify the credit inquiry. If you did not initiate the inquiry, you can stop it immediately and authorities will be notified of the fraud.

You can also place a “Credit Freeze” on your account. A “Credit Freeze” is another tool the bureaus have to prevent ID Theft. For more detailed info on what a “Credit Freeze” does and how it can be placed in your state, please check this link here from The Consumers’ Union.

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Our next Financial Education Workshops will be taking place in our main office this month.

Sept. 19^th 6:30pm – Teen Reality Based Budgets – Help your teenager or young adult learn how to create and manage a personal expense budget. This is a “life after college” simulation. Please contact me to RSVP for the workshop. Gmeyer@meriwest.com or 408-365-6328.

Sept. 26^th 6:30pm – Credit Myths and Repair – Learn the top ten myths of credit management, how to access your credit report for free, and how to address information on your reports that is inaccurate, invalid, or out of date. Thousands of South Bay residents have benefitted from this workshop over the past five years. Please contact me to RSVP for the workshop. Gmeyer@meriwest.com or 408-365-6328.