Credit freezes: your best identity theft protection
Countless companies are hawking ways to keep your identity safe from fraud. But Julia Scott shows you why the best — and perhaps the cheapest — way to protect yourself is a credit freeze and how you can arrange one.
TRANSCRIPT
What’s the best way to prevent credit card fraud? It’s not what you think
Forget hours of shredding mountains of paper and fears about mailing letters from your – gasp – mailbox.
So what’s my secret?
FREEZE YOUR CREDIT!
Not literally, silly. What I mean is, contact the three major credit card bureaus.
Experian, TransUnion, and Equifax.
You can put a freeze on your credit online, over the phone, or by snail mail. It’s super easy.
And it only costs $3-$12, depending on what state you live in. That’s a lot cheaper than monthly credit monitoring, which can be up to $25 PER MONTH.
Hmm, run that by me again.
Now, if you’ve had your id stolen, chances are freezeing your credit is FREE
So what’s so great about this? When you freeze your credit, the three bureaus can’t legally release your information to ANYONE without express authorization.
So scammers that try to open credit or take out a loan in your name? Blam! No dice.
Just remember to put the freeze on at all THREE bureaus, or thieves could find a loophole.
Of course, if you’re about to take out a car loan or mortgage, you’ll need to unfreeze your credit.
For CreditCards.com, I’m Julia Scott
Duration : 0:1:39
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Cyber Identity Theft and How to Prevent It
Cyber Identity theft has become a major problem in today’s electronic cash and Internet shopping world. It seems that whenever banking and online security advances to keep out the baddies they go and improve the types and variety of their hustles. Sometimes however it is not the breaching of electronic security but the complacency and misplaced faith of the individual that allows these transgressors to get away with your money.
While the loss of the initial money removed from your bank accounts or credit cards is enough of a shock what is often worse is the proceeding problems that you may face long after the actual crime. Things such as your credit history will have a record of unpaid bills or bad credit associated with the theft that can be far harder to overcome and create ongoing problems and stress.
The best way to combat identity theft is prevention. By being alert regarding transactions made on your credit cards or bank accounts, and taking action quickly you can limit your losses if you notice any fraudulent transactions. If you do notice any questionable transactions on your accounts then there are a few steps to take to limit your losses.
Notify your bank or credit card company’s fraudulent claims department immediately that there are debatable transactions on your account. You may be liable for the cost of fraudulent transactions on your account until the time you notify your bank so vigilance is the key, however many credit cards have a $50 maximum liability.
If necessary close your accounts and open new ones with completely new passwords etc. Request that the accounts be closed via phone initially and then in person to ensure that your request has been acted upon.
Contact the main credit reference agencies (such as Equifax, Transunion and Experian) and place a fraud alert on your file. This will help to prevent further fraud by the criminals who have your information.
Report the fraud to the authorities who will issue you with a crime number. This number is required to make any claims against insurance etc.
Advise the Federal Trade Commission (FTC) and report the details of the fraud. This helps the police to keep up with any new methods being used by criminals to commit ID theft and thus helps to stamp it out.
Apart from the steps to take if you are a victim of ID theft there are some simple measures to take to help prevent it in the first place. Simple things such as never carrying your PIN number in your wallet or purse with the card are too often forgotten giving criminals easy access to your cash should you lose your wallet. Never respond to emails that require you to log into your bank account from a link within the email that appears to be from your bank. This kind of account password harvesting is known as Phishing and catches more people that it should by gaining access to their account details and then clearing the account of all funds before the owner knows it.
Cyber Identity theft and other types of fraud are all too common and will always be a danger to the electronic banking system we have today. Unfortunately that danger is the price we pay for convenience and access to our credit. Despite these risks however if you remain vigilant and take some common sense measures to protect yourself from this type of fraud you can limit your losses and sometimes escape relatively unscathed.
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How You Can Stop Identity Theft
By now everybody has heard of some horror story about identity theft from TV shows or magazine articles. In the popular culture, references of identity theft are found in the novels and movies, notably Frederick Forsyth’s novel, “The day of the Jackal” and the 1995 movie “The Net.” In real life, the Identity Theft Resource Center reports 8.9 millions identity theft victims in 2006.
So, what is an identity theft? An identity theft occurs when somebody steals vital pieces of personal information, e.g. your social security, credit card numbers, etc. and uses that information for financial gains by taking your identity. The most common form of identity theft involves credit card and mortgage frauds. But it can also be used for vicious crimes like drug dealings, terrorism, etc.
You may be surprised to know that many minor identity thefts are committed by someone you know. So, don’t make it an easy job for a person to steal your personal information from your wallet, checkbook, etc. Avoid leaving things containing your personal information lying around for others to have an easy access to that information.
Shred, shred, shred. Buy a cheap paper shredder from an office supply store and shred all your paid bills, used check books, etc. before tossing those into the trash. Put aside 30 minutes every Saturday morning for shredding anything that contained your personal information that you intend to trash. Make it a habit.
Never give out your personal information like your social security number; birth date etc. over the phone when the call is received unsolicited. Your financial institutions have that information and they will not ask you for that. Sometimes, for verification purposes, they make ask you the last four digits of your social security number.
Don’t pay anybody to get a copy of your credit report. Because of a congressional mandate, all three-credit report bureaus will give you a copy of your credit report for free every year. Go to AnnualCreditreport.com to obtain your free credit report every year from TransUnion, Equifax, and Experian. While obtaining your free credit report, these bureaus will push some paid services. You are not required to accept the offers.
Don’t get your free credit reports from the three bureaus all at the same time. Then you have to wait one year before you can get your reports again for free. In the mean time, some unwanted stuff may show up in your report. Get your free report every four months from each bureau. If you are using a PDA, password protect it to prevent others from accessing it.
Phishing is a popular method to steal sensitive information for identity theft purposes. Don’t be a phishing victim. Avoid clicking on any link that comes to your way through e-mails or IM. The e-mail will disguise itself coming from your financial institutions (your bank or PayPal accounts) and will urge you to click a link to verify your accounts or resort to such other tricks. Sometimes, it can be outright threatening. If you click the link you will end up in the thief’s website. And if you enter your user name and password, the thief will have enough information to log into your actual account.
Begin online accounts for all your credit cards and financial accounts. Online accounts are not only convenient for faster bill paying, paperless transactions, etc., they also monitor your accounts frequently, instead of waiting for the monthly bill or statement to arrive. Monitor your accounts online every week and if you see any suspicious charges, checks, etc., call you banks immediately. Also setup e-mail based account alerts, if available, to alert you when charges are made to your accounts.
Avoid putting your outgoing mail containing bills and checks in your mailboxes for easy access by a thief. Deposit them in mailboxes located in the post office or street corners. Better yet, setup online bill payment with your bank and avoid the snail mail for bill paying.
You also want to keep your computer safe. Thieves can get in to computers through spyware and unprotected wireless or network connections. Use anti-spyware programs and turn on your Windows default personal firewall program. To prevent viruses infecting your computer, use an anti-virus program. Setup accounts for each user of your computer and ask them to use strong passwords that include a combination of letters and numbers.
One way to prevent identity theft anybody, including you, from opening any credit in your name is to freeze your credit account. This way is not available in all states. If it’s available in your state and you opt for this option, you need to lift the block before you allow anybody, e.g. an employer for a new job, creditor for a car loan, etc., to access your credit information.
How To Protect Your Online Identity
As people turn to the web for entertainment, shopping, and social networking, identity thieves pop up to take advantage. Following these tips will help avoid getting caught in a sticky web.
Duration : 0:1:44
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Ways To Defend Against Computer Identity Theft
Computer Identity theft is a major crime that is expanding each year. If you are a victim of identity theft it may take months, even years, trying to repair credit history. A seriously damaged credit report can compromise your chances of getting a new job, a bank loan, insurance or even rental housing. It’s even possible to be arrested for a crime you didn’t commit if someone else has used your identity to break the law.
Unfortunately, many of the methods that thieves use to steal identities are beyond your control to guard against. Although it’s rare, even store clerks have been known to use their position to pass along information to identity thieves. There are measures you can take, that will make it more difficult for a thief to use your identity.
Protect Your Credit Card Number After It Has Been Swiped When Buying Items
Protect your credit card number after It has been swiped when making a purchase, check to make sure that the printed receipt hides all but the last 4 digits of your credit card account number (usually there will be Xs in place of the first 12 digits). Some terminals still print receipts that show all of the account number, and may include the expiration date as well. After your card is swiped, you are permitted by law to hide the first 12 digits of your account number on the copy of the receipt that the vendor retains. A marking pen that will do the job usually.
When you go to a restaurant, it is important to make sure that the first 12 digits of your credit card number are hidden on your receipt. You may be in the habit of signing it and then leaving the restaurant’s copy on the table after your meal. An identity thief can easily steal the signed receipt before the waitperson comes back around to pick it up from the table. Don’t take any chances.
Do You Really Need To Give Your Social Security Number?
Another important way that you can guard against identity theft is to avoid giving out your social security number unless it’s absolutely required. Although you need to share your social security number when you apply for credit or for a bank account, sometimes a store or an organization will want to use it as an ID number, simply to identify you within their system. This is a common practice even though the law says that social security numbers aren’t to be used as ID numbers. In these situations, use your judgment. There’s usually an alternative if you ask.
Destroy Documents That Contain Personal Information
Buy a paper shredder and use it to shred documents you are throwing away which contain personal info such as credit card numbers, social security numbers, phone numbers and dates of birth. This is important to do both at home and at work. Identity thieves aren’t above going through someone’s trash to find valuable personal information that can help them obtain credit in your name.
If you are a victim of computer identity theft, take the following steps at once. Notify credit card companies, shut off your accounts immediately immediately and ask to have new cards issued to you. Place a fraud alert on your file with any one of the three major credit bureaus. The other two will be notified automatically. File a police report. You may need it to show to creditors as proof of the crime.
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