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Monday, February 7th, 2011

Nothing Says ‘I Love You’ Like Avoiding Identity Theft

With Valentine’s Day around the corner, many Americans are likely thinking about ways to treat their loved ones, or considering their options for meeting a romantic partner. And in the age of online dating and connections, the Federal Trade Commission has issued a guide for keeping your personal information (and money) safe from identity thieves while you enjoy all Cupid has to offer.

Here’s a look at some of the FTC’s Valentine-specific warnings.

Know the Warning Signs for Valentine’s Day Scams

  • Online dating & social networking: Online venues for meeting and interacting with people have ballooned in popularity in the last several years, but that doesn’t mean they’re always safe. The FTC suggests proceeding with caution when engaging in any sort of online relationship, especially if you notice any of these identity theft warning signs. The important thing to keep in mind is not to let your guard down even if you’re feeling particularly sentimental around the holiday.
  • Flower delivery scams: Another warning the FTC has issued concerns flower delivery services – obviously a classic choice for February 14th. According to the FTC, some flower delivery scams involve telemarketers offering their services over the phone for more money than a local florist’s shop would charge. Naturally, that’s not a good deal for anyone. If you’re thinking of sending blossoms to a loved one this year, make sure you know you’re working with a legitimate company and paying a fair price.
  • Financial habit compatibility: While financial matters may not seem like the most romantic topic to broach during a Valentine’s dinner, they are important to any serious relationship. Luckily, the FTC offers a fiscal compatibility quiz for partners interested in seeing how their spending, saving and budgeting habits match up. (Hint: offering to do this quiz together for a Valentine’s Day date might not go over well if it’s the most romantic thing you’ve got planned.)
  • Magazine subscription and renewal scams: Thinking of giving a gift that your valentine can enjoy all year long? Be careful if you choose a magazine subscription, because some scammers have begun sending phony renewal notices to subscribers in hopes of tricking these people into sending checks they think are to maintain their subscriptions. Instead, visit the web site of the magazine you want to share with your loved one and make sure that web site is a secure place to enter any financial information.

The Relationship between Love & Money

Americans tend to think of love and money as unrelated subjects, but any serious relationship demands a consideration of financial matters from both partners. After all, the stress of debt problems can wreak havoc on a relationship, so show your partner you care by putting financial matters on the table this Valentine’s Day!

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Wednesday, January 5th, 2011

What You Can Learn from 2010’s Top Scams

While many people are looking forward to the new year, it’s also important to take time to look back on what we learned from 2010. So here’s a review of some of the major scams that we saw in the past year and what you can do to protect your finances from similar ones.

Protect Your Finances from Future Scams

  • Mortgage Relief Scams: Scammers know that people who are feeling desperate make good targets, so times of economic distress provide scam artists with plenty of opportunities for ripping people off. Scams offering fake mortgage relief take advantage of people in danger of losing their homes by offering fake services to negotiate with lenders or change mortgage terms, and real opportunities for struggling homeowners to throw away money they can’t afford to lose. Lesson: You are the only one responsible for saving your home and/or mortgage. If you want help, you must ask for it and do some work to find the right group to provide it.
  • Debt Relief & Reduction Scams: Like mortgage relief scams, debt relief scams work by charging consumers steep upfront fees for debt-reduction services that the scammer never delivers. Though new rules have strengthened consumer protections against debt settlement companies (which are sometimes little more than dolled-up scammers), many groups are apparently still finding ways to get around these rules. Lesson: Do your homework before committing to any debt relief firm. Visit the Better Business Bureau, compare fees among companies, and consider your alternatives (like credit counseling and bankruptcy). Most importantly, if something sounds too good to be true, don’t believe it.
  • Robocall Scams: These scams work by contacting vast numbers of consumers with recorded telephone messages and promising some attractive service (like quick debt reduction) – naturally, for a steep price. Lesson: Getting out of debt is almost never a quick process. If someone promises a quick fix for your debt, turn the other way and run (and don’t write any checks in the meantime).
  • Identity Theft Scams: Identity theft is perhaps one of the most troubling crimes of the information age – correcting the damage done by identity thieves can take hours of time and lead to anger and frustration. And identity thieves are masters at taking advantage of new technologies to get our information – emails, text messages, online buying sites and other popular media have all been used by identity thieves to lure in unsuspecting consumers. Lesson: Guard your personal information carefully. Don’t ever wire money to strangers, reply to unfamiliar emails, text sensitive information or otherwise reveal too much of your personal data.

Keep Your Money Safe in 2011

The sad truth about scams is this: there will always be a new scam out there – the nature of legislation is that it is slow and retroactive, meaning that unscrupulous individuals will always be able to outpace laws. But if you approach your everyday transactions and interactions with reasonable skepticism, you should be able to keep yourself and your money safe.

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Wednesday, December 8th, 2010

A Stealthy New Threat to Your Credit Card Information?

A recent report from a Memphis news station warns of the latest risk to the safety of your credit card information: a super-stealthy computerized scanner that a tech-savvy thief could use to get your credit card digits while passing you on the street.

RFID Technology in Your Wallet

Here’s how the technology works, according to the story, and why it might pose a problem for ordinary consumers.

  • RFID technology: Something called radio-frequency identification is commonly used in passports, credit cards and debit cards to facilitate transactions. Merchants can process information from RFID-enabled cards with a simple scan.
  • Portable computing devices: Unfortunately, the technology that allows for quick transactions in the mall and at the airport also, it seems, opens the door to stealthy identity crimes. The news story mentioned above cautions that a person equipped with easy-to-purchase equipment could discretely scan people’s wallets for card information on the street.
  • Potential identity theft: Clearly, having your identity stolen is not a pleasant experience – but being victimized by identity theft while you’re walking the streets and have your guard down can be both frightening and financially devastating.

Should You Be Worried about Mobile ID Theft?

The jury seems to be out on whether or not the potential for RFID-fueled identity crimes will actually translate into a rash of such crimes. An estimated 140 million Americans have some sort of card with RFID capabilities, though, generally speaking, you can guard against identity theft by taking certain precautions:

  • Check your bank account regularly: Log on to your online account often and review your monthly statements carefully to make sure that no unusual activity is taking place. The more regularly you check your account balance, the more likely you’ll be to catch a withdrawal from an unauthorized source.
  • Shred any sensitive documents: Though we’re well into the digital age, plenty of identity thieves still get their information by rummaging through the trash or recycling bins. Whenever you get documents with sensitive information on them (including your Social Security Number, your bank account numbers and your credit card number), shred them before disposing of them.
  • Take only what you need: When you leave the house (especially for longer trips) limit yourself to only the credit cards you’ll absolutely need while you’re away. Limiting your chances of losing one or having one stolen is a smart way to play your odds.
  • Change your passwords: If your passwords are easy to guess, change them. Even if they’re not easy to guess, still change them regularly.

The news story mentioned above highlighted the potential for this type of crime to lead to identity theft, but it also mentioned that no actual cases of such crimes have yet been reported – though that could be because the RFID scan theft is such a difficult technique to trace.

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Wednesday, December 1st, 2010

Scam Watch: Avoid Dating & Social Networking Money Scams

The Federal Trade Commission recently published a warning about scams that have been reported on dating and social networking web sites. Here’s what you need to know to identify and avoid these potential money-suckers (and identity thieves).

It’s Probably Not True Love

According to the FTC's OnGuard Online site (onguardonline.gov), a typical online networking or dating scam works something like this:

  • The scammer creates a fake profile.
  • The scammer develops a relationship with someone he’s never met face to face and convinces that person that they’re in love.
  • The scammer asks his “love” to wire money for one reason or another – usually to a location outside the United States.

So how can you distinguish between someone who is honestly interested in friendship or a relationship and someone who only wants to drain your bank account or steal your identity? The FTC provides a list of warning signs that your digital romance might be less than ideal.

  • The scammer expresses a desire to move away from the dating or social networking site and use instead a personal email or instant messaging account. This suggests that the person wants to fly under the radar of whatever body governs the site, or wants to use a less-secure (and perhaps less traceable) method of communication.
  • The scammer begins to claim feelings of love early on in the relationship. This should raise a red flag, particularly if you’ve never met the person face to face – claiming to be in love sets the stage a little too neatly for asking for favors from that loved one.
  • The scammer indicates that she is from the U.S. but is currently living overseas. This provides a handy explanation for why she would want a victim to send funds outside of the country (presumably to an account regulated by less stringent laws than those in the U.S.).
  • The scammer insists that he wants to visit the victim, but is unable to do so because of some unfortunate life event (such as the death of a loved one, job loss, or similar).
  • The scammer offers seemingly “valid” reasons why she needs money, such as a relative’s sickness, a minor financial setback, or similar – and, after the victim sends money, the scammer continues to ask for more.

Watch Out for Requests from Friends and Family

Of course, not every scam involves establishing a new relationship. Another popular scam involves requests from close friends or family members for money to be wired overseas - usually the story involves an international vacation gone bad, and the friend needs money wired to pay for an emergency. In reality, the friend's account has been compromised by a scammer.

The Dangers of Identity Theft

So why are scams such as these so treacherous? The obvious answer is that a scammer could take in an unsuspecting victim and drain his or her bank account. But the risk of identity theft might put a victim at even greater risk.

Identity theft can cause long-term damage to your finances and credit, which can make it difficult to get loans, apartment rentals, credit cards and more. In general, be wary any time a person you’ve never met asks for money – particularly if you’re being asked to send it outside the U.S.

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Wednesday, October 27th, 2010

Take Advantage of Free ID Theft Protection & Education Materials

The Federal Trade Commission has announced that, in honor of National Protect Your Identity Week, it will provide consumers with a wealth of free information and materials about how to fight, avoid and protect themselves against identity theft.

Where to Learn about Identity Theft Prevention

Though federal laws exist to protect the finances of people who are victimized by identity theft, it’s still fairly common for bankruptcy filers to indicate that identity theft contributed to the financial distress that led them to file for bankruptcy. Here’s a look at what the FTC has to offer:

  • Basic information: This “one-stop national resource” provides consumers with information about what identity theft is, how to recognize it, how to prevent it and what to do if they’ve been victimized by identity theft. Additionally, the site has information for businesses and law enforcement groups to help prevent and fight identity theft cases from happening.
  • Informative videos: The FTC has posted some educational videos for consumers interested in learning how to reduce their online risk of identity theft and how to protect their digital lives from exposure to identity threats.
  • Online application of skills: At their game portal, the FTC offers consumers a chance to test their knowledge about the risk factors of identity thefts, basic precautions to take to avoid being victimized by identity thieves and apply identity theft prevention skills by playing online games. This site might prove especially helpful for younger computer users who might be resistant to more traditional information sources.
  • Reminder of your rights: Finally, the FTC has posted a reminder about every American consumer’s right to obtain and view copies of his or her credit report and why staying abreast of what appears in your credit is important to financial health.

Legal Help for Identity Theft Woes

To top off its bevy of useful information about fighting and preventing identity theft, the FTC has also announced that it will offer legal guidelines for identity theft victims. This web page is designed to help victims and their advocates (whether lawyers, credit counselors or other activists) determine how to proceed to maximize the benefit of fighting identity thieves.

As many people who have unfortunately felt the sting of identity theft already know, the crime can lead to hours of headaches as consumers try to sort out their financial situation and reclaim their private information. Generally, there are a few practices can help you avoid identity theft:

  • Shred all sensitive documents before disposing of them;
  • Don’t click on unfamiliar links online and definitely don’t enter your personal information unless you’re sure what web site you’re on;
  • Don’t share your passwords with anyone;
  • Check your free credit report every year for suspicious activity; and
  • Make sure your email has a good spam filter. Be wary of emails from unknown sources.

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Wednesday, October 20th, 2010

Payday Lender Charged with Improper Disposal of Customer Data

A press release from Illinois’ attorney general’s web site notes that an Illinois payday lender, Payday Loan Store, has been accused of dumping consumer’s sensitive information in trash receptacles outside several locations. Lisa Madigan, the attorney general, is reportedly suing the company for “allegedly failing to safeguard consumer data.”

Here’s a look at the details and what you need to know to keep your information safe.

NOTE: If you’re really strapped for cash and feel like you’re at your wits’ end trying to make ends meet, now might be the time to consider filing for bankruptcy.

Sensitive Documents Found in Trash

Reports indicate that various documents, including highly sensitive consumer information, were discovered in trash bins outside some Payday Loan Store locations.

  • Enough information to allow identity theft: Police reportedly found documents that included customers’ Social Security Numbers, bank account numbers, canceled check information, credit counseling history and more.
  • Earlier promises to protect such information: According to sources, Payday Loan Store guaranteed customers that it would protect their sensitive information. The discovery in the trashcans suggests a breach of both that promise and federal law.
  • Fine and penalties sought: The press release notes that Madigan will seek a civil penalty of $50,000 from Payday Loan Store for each incident of improper handling of consumer information. Further, Madigan apparently hopes to permanently bar Payday Loan Store from engaging in deceptive and unfair practices.

More Dangers to Payday Loans?

The news of this improper data handling adds a new element of danger to the already risky short-term, high-interest loans offered at outlets like Payday Loan Store. If you’re contemplating taking out a payday loan, consider this:

  • State laws have banned or limited them: In recent years, payday lenders have been outright banned or severely restricted in many states.
  • They come with sky-high interest rates: In those states where payday lenders still operate freely, associated fees on cash loans are equivalent to interest rates up to 390 percent.
  • They’re excellent debt-cycle promoters: While most people who take out payday loans fully intend to repay them in full at their next payday, the majority of payday lending customers end up in multi-cycle debt traps, paying far too much for the short-term loans they’re getting.

As if all that weren’t reason enough to avoid payday lenders at all costs, Attorney General Madigan’s new suit suggests that the dangers of borrowing from a payday loan store could include identity theft. Yikes.

So what should you do if you’re in need of quick cash and can’t get a loan from a traditional source? Many financial insiders recommend pretty much anything besides a payday lender: asking for a loan from friends and family, asking for a paycheck advance, selling unwanted household items, selling blood or plasma, applying for a new credit card, etc.

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Wednesday, September 29th, 2010

FTC Supports Data Security Legislation

Even though federal law protects victims of information crimes, every year some people who file for bankruptcy cite identity theft or another information crime as one of the reasons for their financial distress. And, in an age of increasing online transactions, we’re more exposed than ever to data breaches that could lead to serious privacy risks.

That’s why it’s good news to hear that the FTC recently testified to Congress in favor of data security legislation.

Your Personal Data & Finances

You probably already know that your Social Security Number, your credit card numbers, your bank account numbers and similar information are valuable and should be guarded carefully. But, it seems, some businesses that collect and store our personal information don’t always take the same precautions we might ourselves.

The FTC testimony specifically suggests the passage of laws that require the following:

  • Businesses that make claims or promises about data security must know that these claims are accurate and up to date.
  • Businesses should take steps to guard against well-known technology threats to data security.
  • Businesses must know the recipients, if any, of sensitive consumer information.
  • Once they no longer need sensitive information, businesses must not continue to store it.
  • When disposing of sensitive information, businesses must do so properly and completely.

If it surprises you that these laws aren’t already in place, take note. This should serve as a wake-up call to remind you to keep careful track of your personal information at all times.

Protecting Your Information and Money

So how can you reduce the threat of identity theft and thus lower your chances of becoming a victim? Here are some pointers from the FTC:

  • Shred sensitive documents when you’re finished with them. This includes medical documents, financial papers, and anything else that has identifying information about you or your family.
  • Protect your Social Security Number. Keep your Social Security card in a safe spot (not your wallet) and don’t give this number out unless you’re obligated to by law. If you’re asked for your SSN, question why the company needs it, how it will be used and whether you can give an alternate form of identification.
  • Keep your personal information safe. Don’t communicate any sensitive info over the phone, through email or over the Internet unless you’re certain who’s on the other end.
  • Be suspicious of strange emails. If you get an email from an unknown source with a link or an attachment, avoid clicking on them – they could be viruses.
  • Keep your passwords obscure. Using important dates or family names can make it easy for identity thieves to access your accounts.
  • Keep your personal information secure. At home, take special precautions if you have roommates or non-family workers coming and going.

If you’re concerned that you may have been the victim of identity theft, speak with a lawyer today to learn about your rights.

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Saturday, August 14th, 2010

Protect Your Money and Credit: Scams to Watch For

The ever-evolving technology that makes our lives easier and more fun has a flip side: it gives the “bad guys” and endless stream of options for tricking us out of our hard-earned money, racking up debts on our accounts and even stealing our identities.

Here’s a look at some of the latest scams that can pose a threat to your money and identity.

  • Infant Identity Theft: This dastardly scam involves stealing the Social Security numbers of children and selling them to people. Once these people have “bought” the “clean” numbers, they can then run up debts they might have no intention of paying back, which can mean serious trouble for the children down the road. The most frightening part? It’s possible that nobody would discover the scam for years: when the child applies for a driver’s license, when the parents open a savings account for him or when he applies for college.
  • Fake Timeshare Relief: As many financially struggling Americans look for ways to shed debts, many have sought to unload their timeshare properties. Unfortunately, scammers have caught on to the trend and are reportedly posing as sales agents, demanding upfront fees to help sell the homes, and running away with the money without offering any real help. As with other types of scams, proceed with caution any time a seller approaches you and/or demands payment before performing services.
  • Phony Online Car Sales: This scam advertises used cars at steep discounts, claiming that the vehicles have been repossessed to explain the low prices. Interested buyers are prompted to wire part of the purchase price up front and send the remainder when the car is delivered a few days later—but, of course, the car never is delivered, because the whole thing is a scam. This one can be especially deceptive because scammers apparently use information from the web sites of legitimate auto dealers to make themselves look more credible.
  • Busy Phone Lines: If you begin to notice that your phone lines are inexplicably busy (with dead air, prerecorded messages or similar), you could be the victim of a scam. It works like this: fraudsters collect personal information (such as bank account numbers, passwords or other sensitive info), usually by trolling social networking sites, using phishing emails or calling your number and posing as someone else. Then, they tie up your line and drain your accounts of money by asking for transfers or other transactions—usually the bank calls to verify such activity, but it cannot when your phone is busy. In some cases, the scammers even call the banks pretending to be their victims and ask for the transactions to go through. By the time you realize what has happened, it can be too late, so take a tied-up phone seriously—get to a free line and call your bank and credit card issuers!

For more details about these scams and how to protect yourself and your money, visit the FTC’s web site and check out the consumer protection information.

Additional Resources

Recognizing and Avoiding Email Scams

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Saturday, July 24th, 2010

How to Protect Your Social Security Number

In the computer age, one of the most frightening crimes is identity theft. Here’s a look at how you can protect your personal information to avoid the frustrations and financial setbacks associated with identity crimes.

What Is Identity Theft?

Identity theft occurs when someone uses another person’s identifying information to pose as that person. It can manifest itself in a variety of ways, including these:

  • Opening new credit: A thief who discovers your SSN can apply for loans and lines of credit as you. That person can then run up debts and leave you with the headache of contesting all the charges of your credit score and (possibly) paying some of the bills. In some cases, despite laws, consumers have listed identity theft as a reason they had to file for bankruptcy.
  • Using existing credit: A thief who discovers information for your bank account or credit card can use that information to drain your accounts or make massive purchases (remember: you don’t have to present a physical credit card to buy stuff online; only the card number is needed).
  • Getting medical treatment: The crime known as medical identity theft occurs when someone uses your information to get treated for an illness or injury. This can be especially dangerous to you because it could mean that incorrect patient history information ends up in your file. In emergency situations, that could cause you serious harm.

An article from Get Rich Slowly notes that the 2010 Identity Fraud Survey Report found that 11 million Americans were victimized by identity theft in 2009, for a total cost of $54 billion. The average person reportedly spent 21 hours resolving issues and had to pay $373 to do so.

How to Keep Your Information Safe

In general, it’s best to take some precautions to avoid the nightmare of identity theft:

  • Keep your Social Security card in a safe spot (NOT your wallet).
  • Avoid writing your SSN on checks; if any institutions currently use your SSN as your account number, ask them to change it.
  • Never disclose your SSN over email or over the phone, even if the request seems legitimate.
  • Make sure any web sites that require your SSN (such as online lenders) have secure servers.
  • Check your free credit report annualcreditreport.com every year to make sure nobody else is using your identity.
  • Shred documents with identifying information (like bank statements and medical bills) before disposing of them.
  • Know who does need your SSN: employers, banks and some government agencies.
  • Know that some businesses that request your SSN do not actually require you to give it to them. When you’re asked for yours, ask why they need it, how they’ll use it, whether the law compels you to provide it, how they plan to protect it and what might happen if you refuse to provide it.

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Thursday, June 3rd, 2010

New Tips for Protecting Your Money and Identity

Identity crimes—often thought to be the domain solely of tech-savvy online criminals—are on the rise, but thieves are constantly finding new ways to trick people out of their sensitive personal data, and not all of them involve advanced technology.

According to a New York Times article, a new report released by CBS reveals that people who copy sensitive documents on certain photocopying machines are at risk of having their information stolen by unscrupulous thieves.

What You Need to Know

Here’s what the Times report has to say about the risk from photocopiers:

  • Hard drive storage: High-end copiers (like those that allow users to make lots of copies relatively quickly) often have hard drives that store digital copies of every document they scan.
  • Storage and disposal: Because many photocopier owners may not know that their machines store information in that way, they are unlikely to take steps to erase the digital information before disposing of or selling their machines.
  • Easy access: Anyone buying a second-hand photocopier with its hard drive intact could access the stored information without much trouble.

So how should you protect yourself against potential identity thieves from having access to your sensitive information? Take some precautions:

  • If using a public photocopier or one at work, ask a technology expert whether the copier stores information, and if it does, how they plan to delete it before disposing of the machine.
  • This may seem silly, but always be sure to take your originals with you.
  • Consider purchasing a copier/scanner/printer for home use—many computer companies sell such models for relatively little money, and you can rest easy that nobody else will have access to your information.

Improve Your Identity Safety Online

Another Times article offers some handy tips for protecting against the more familiar, online version of identity theft. The suggestions include:

  • Update your browser: Makers of web browsers, such as Internet Explorer, frequently release updates of their product. These updates often contain important fixes to security flaws. If you're running IE 6, you could be putting your computer at risk for hacks and malware. You also may consider upgrading to a more sophisticated browser such as Firefox or Google Chrome.
  • Get the newest Adobe: Anyone downloading PDF files or watching flash video is likely using Adobe programs. Recent updates have made it much less vulnerable to nefarious infiltration.
  • Be careful with ads: Pop-up ads and leading links often lead to dangerous malware or scam offers.
  • Use good judgment: Sites like Facebook and Twitter may be hot spots for online scams. Play it safe by accepting friendship only with people you know.

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