Is Your Credit Identity Protected?

It should come as no surprise that not everyone in the world has our best interest at heart. And that’s putting it mildly. But what may come as more of a shock is the sheer volume of fraud perpetrated against consumers in recent years. Approximately 8.4 million Americans, for example, fall victim to credit identity theft every year.

According to one study by Javelin Strategy & Research, each identity theft incident averages $7,260 in damages. Take that figure and multiply it by the 8.4 million Americans and you arrive at a number in excess of $60 billion! It’s tough to put a number like that into perspective.

Although it is true that banks, credit card companies, government agencies, and consumer advocacy groups are making strides to combat identity theft more than ever, the problem is showing no signs of disappearing anytime soon. So, if you want to avoid falling victim, just remember the old maxim: The best defense is a good offense. Once you understand how these criminals operate, chances are you’ll walk away unscathed each time you’re solicited.

So, What Are the Danger Areas of Credit Card Identity Theft?

Since you’re probably reading this article on the Internet, let’s begin right here. You receive tons of spam emails every day, right? But how good are you at knowing which emails are spam and which are legitimate?

One of the most underhanded trends to ever emerge on the Internet has been so-called “phishing.” Under this scenario, criminals send fake emails to millions of email accounts. It’s a shotgun marketing approach, technically speaking. That is, they pretend to be any large e-commerce website at which a significant number of users are likely to have an account. Often they’re designed to resemble major sites like Paypal, eBay, or any number of top-tier banks or credit card companies.

From there, they email blast their fake messages to the masses, hoping for “bites.” After all, it only takes one or two responses out of millions of messages sent in order to achieve success (defined here as their gaining access to your credit card information).

If you have a major credit card and receive an email with that company’s logo and address, you might not be too skeptical upon receiving it. In fact, the trick is often masked by reporting some sort of problem, which can be fixed by clicking a hyperlink. Complicating the matter, for anyone who does click, the site it takes you to likely resembles the actual corporate web site for that credit card, bank, payment service, etc.

But now that you know the routine, it won’t happen to you! Right? You’ll now remember to: (1) be highly suspicious of any similar, unsolicited incoming email requesting you to take action, even if it appears legitimate in all ways; (2) never attempt to access your bank, credit, or other sensitive accounts online in response to emails; and (3) trust your instincts. Regarding that last item, if something seems amiss, it probably is. Many victims of identity theft are in fact able to trace events back to such a moment of doubt involving an email.

Additional tips:

• Also be wary of similar emails that request your involvement via phone. This related scam, known as vishing (voice phishing), has the same ultimate goals: to coax private credit card, account number, and password information from you. If you’re concerned about an email and want to talk to your bank or credit card company, get their telephone number from your printed statement first.
• When you want to visit your bank or credit card’s web site, do so only by typing the address yourself, not by clicking a link on an email.
• Be particularly cautious about any email that appears to be from a bank, credit card company, Internet auction site, or Internet payment site. (Actually, any email that involves any sort of monetary transaction at all should be highly scrutinized.)
• You may also report fraud to the government. The Federal Trade Commission accepts complaints at www.ftc.gov, as does the Internet Crime Complaint Center at www.ic3.gov.

Aside from My Computer, My Home’s Safe from Fraud, Right?

Unfortunately, no. You have one other major connection with the outside world, thanks to Mr. Alexander Graham Bell – your telephone. It’s difficult to imagine the enormity of this problem. Americans lose approximately $40 billion per year on telemarketing fraud.

We’ve learned of numerous scams, which generally fall into a few major categories.

• You Won! Some fraudsters will claim that you’ve won some sort of prize. Only, there’s a catch: You’ll need to pay a small fee to cover shipping, taxes, or some other cost. This sort of fraud could affect you on many levels. For one, there is likely no prize at all. Or, if there is, it’s likely something nearly worthless. What’s worse is the criminal’s darker goal of possessing your credit card information.
• Won’t You Help? One of the more shameful schemes involves posing as a charity. As a rule, we advise that you never make a donation over the telephone – especially when you’re not the one initiating the call. If a charity calls and you’re inclined to donate, request that they mail you the appropriate forms. That way, you’ll review their literature, see copies of their letterhead, be able to verify their address, etc.
• I’ve Got an Unbelievable Opportunity for you! Investment scams are another major category. Even when you’re in the market to invest money, it’s best to do so on your own terms. In other words, you should select your own investment company through which to purchase such products, not respond to some unsolicited potential crook with talk of unbelievable returns. At best, it’s going to be an astronomically high risk investment; at worst, it’s blatant fraud / credit theft.

A great tip to help reduce telemarketers in general is to sign up with the Federal Trade Commission’s “Do Not Call” database. Visit www.DoNotCall.gov for details.

What About Using My Credit / Debit Card at ATM Machines?

Glad you asked. For the most part, the practice is safe. Most ATM machines are located in banks, convenience stores, gas stations, and other locations generally regarded as safe. However, you should still use caution; any thief who would steal a credit or debit card right from your hands (and, they’re out there) is by definition a more offensive criminal. Whereas the other areas for fraud described above are carried out over distances, these criminals work in direct contact with their victims.

Occasionally, they’ll invent novel schemes to separate you from your credit or debit card. In one such example, the criminal places a thin plastic sleeve into the machine (one of the machines that take the card inside, as opposed to the ones where you swipe the card). Then, when an unsuspecting ATM user drops by, the card becomes caught inside. Eventually, the person will leave the area (perhaps to report the problem, perhaps assuming the machine retained the card for some unknown reason). This gives the criminal an opportunity to retrieve the card and run off.

This rather complex scheme may be rather rare, but you should nonetheless be on the lookout for anyone lurking suspiciously nearby. It’s also wise to use only safer, well-lit ATM locations.

Where Can I Turn for Advice?

The professional credit counselors at our Consumer Credit Counseling Service (CCCS) agency know the proper ways to handle and protect your credit. Whether you'd like more information about credit as it relates to your credit report, credit counseling, or debt management, contact us at any time. Visit us on our website at www.cccsstl.org.