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identity theft

Cash – Your Best Defense Against Identity Theft

By //  by Kevin M

Amid all the internet clamor over the lowest rate credit cards, zero interest transfers, and of course, rewards points, it’s often easy to forget the fact that good, old fashioned cash is your best defense against identity theft. That alone is a compelling reason to use it as much as possible.

Sure credit and debit cards offer various forms of fraud protection, but cash keeps identity theft from happening in the first place.

Theft Of Money Is Nothing Compared To Identity Theft

Identity Theft Protection

We can agonize over the potential for the loss of cash in a bank account as a result of a lost or stolen debit card, or of the potential for a thief to tap out the remaining balance on a credit line. But neither of those potential losses comes close to the outright theft of our identity. And each carries a limit of loss anyway.

If all we could lose in an identity theft situation was a limited amount of money, it wouldn’t be nearly so terrifying. But if access to a single account is stolen, a thief could take over and plunder every account we’re connected with, and a whole lot more.

With sufficient information, a thief could become “you“ – for financial purposes – and do some or all of the following:

  • Empty your bank accounts and investment accounts
  • Max out your credit cards and credit lines
  • Get employment in your name
  • Obtain new credit in your name
  • Apply for government benefits in your name
  • File a fraudulent income tax return and obtain a huge refund in your name
  • Commit other illegal acts in your name
  • Sell your identity to a third party for immediate cash

Sure, eventually you will remedy that situation, but it may take months or years, and that is disruptive. And if the theft is severe enough, you may even need to get a new Social Security number, and transfer all of your financial information from what ever the source. In a financial sense, that’s like having to create a whole new you!

[Find out how to protect yourself from identity theft while using Facebook & other social media!]

Credit And Debit Card Paper Trails

A generation or so ago, no one worried about identity theft. There are various reasons for this, but one of the most significant is the widespread use of credit and debit cards. Every time you use plastic in a transaction, a paper trail is created! That paper trail is a rich target for identity thieves.

As a result of a single transaction, a thief will know your bank, your account number, your signature and other important information, which may be all that’s needed to gain access to your account, and ultimately to your entire identity.

Back when most transactions were conducted in cash, this threat was non-existent. After all, cash leaves no paper trail. There’s a lesson in there somewhere.

“Inside Jobs”

A large percentage of identity theft is “an inside job” – it isn’t initiated by some shady looking dude with a wide brim hat hanging out in a dark corner of the store, but by an employee of the establishment. In fact, it is estimated that as much as 65 to 75% of identity theft is committed by employees.

And why not – employees are the ones with access to the paper trails! When we do business with any company, we’re supplying them with personal information that could be used to perpetrate identity theft. We’re relying heavily on the integrity of the employees of that company and on the hope that they won’t use that information to steal our identity or commit some other form of fraud.

But not all employees have integrity. Access to personal financial information – in combination with an employee’s need (or greed) for cash or other benefits – could cause them to cross the line to the dark side.

Transactions completed with plastic increase the possibility of this outcome. But if you pay with cash, there is no personal information supplied on your part. Identity theft thwarted!

Using Cash To Minimize Identity Theft

By paying in cash – especially for small purchases – you lower the chance of being a victim of identity theft. The last thing that you want to have happen is to become a victim of identity theft as a result of a purchase of a bottle of soda at a dollar store! Paying cash for small purchases is a way to minimize that outcome.

Plan to carry a certain amount of cash with you at all times, and establish guidelines for payment methods based on the amount and type of the purchase.

For example, you could decide that you will pay cash for any purchases under $50 – that would probably eliminate most credit/debit card transactions. Any transactions of a higher amount could be paid by either credit or debit card.

If that strategy cuts your use of plastic by 75%, it will also lower your chance of being a victim of identity theft by 75%!

Paying cash is a way of disarming would-be identity thieves. Cash is virtually “invisible” – it leaves no record of it’s users. That’s your single best protection against identity theft.

How common is cash as a payment method in your life?

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photo credit: freedigitalphotos.net

Filed Under: Commentary Tagged With: A Victim Of Identity Theft, credit card, Credit Cards, debit card, Debits And Credits, electronic commerce, Identity, identity theft, Identity Thief, Protect Yourself From Identity Theft, Protection Against Identity Theft, theft, Victim Of Identity Theft, Your Identity

Watch Out For This New Traffic Light Camera Scam Which Steals Your Identity

By //  by Khaleef Crumbley

I came across an article recently on Yahoo which talked about a new scam. This scam revolves around traffic light cameras, and is designed to steal your identity.

When I began to read this article, I expected to read about some fancy IT person hacking into traffic cameras, and somehow using them to read information off of your EZ-Pass or some other recognizable thing on or in your car. But instead, crooks are using laziness and fear to take advantage of people.

The Red Light Camera Scam

What happens is that the con man will choose a number at random; and once a person answers the phone, they simply tell them that they have an overdue fine for running a red light camera. According to the article, they are then told that “the only way to avoid a significant late fee, mandatory court case, or even jail time is to pay the bill right then and there, over the phone. If you don’t pay up you’re threatened with a warrant for your arrest.”

Of course, when this happens, there’s no bill, no unpaid ticket, no red light camera, and the person who was calling does not work for the police station or the clerk’s office. They are just hoping to use your fear and laziness to get you to automatically make a payment. If you receive a phone call from someone claiming to be a police officer (and maybe even giving you a supposed ID number), fear may overtake you and cause you to do whenever that person on the other and says in order to avoid the consequences that he is promising.

Traffic Camera

What’s The Point?

Once you agree to pay the fine, the person on the other end will then ask for your credit card number and security code (that three digit number on the back) in order to process the payment. Once they have that, they can then move forward and ask for your billing address, date of birth, and even your Social Security number – assuring you that all of this data is needed in order to handle your payment.

Of course, you would assume that if the police station was able to get your phone number from whatever information came up on the red light camera, they will also be able to get your address, and at least have the date of birth of the person to whom the car is registered. But again, when the fear of a hefty fine or possibly even jail time overtakes someone, the ability to think clearly and to logically assess a situation is greatly diminished.

You can rest assured that there is no police department in the country that will conduct business in this fashion. They conduct all of their business through snail mail and will not call you and give you the option to make a payment over the telephone. Even if you’re at the point of debt collection, all of this is first handled via mail, and once the phone calls are initiated, you should verify everything in writing before making any types of payments.

Covering Their Tracks

According to the article, the thieves will sometimes place a follow-up phone call and tell you that it was a mistake and then assure you that your card has not been charged. They will even apologize for causing you stress or bothering you in the first place. The purpose of this is to cause you to be so relieved that you aren’t in any type of trouble that you won’t get suspicious, and to also ensure that you will not check your bank account to make sure the payment went through. This should give them enough time to place a number of fraudulent charges before you decide to check your account.

So remember that if you ever receive a phone call stating that you were caught with a red light camera, going through a toll booth without paying, an unpaid parking ticket, or anything else of this sort, you should hang up the phone and call the police station or the clerk’s office yourself and inquire about the matter.

In fact, you should avoid giving out any sensitive financial or personal data through the phone, unless you are the one who initiated the call and you are 100% certain that you were speaking with the correct party.

photo credit: sskennel

Reader Questions

  1. Have you every had anyone call you with a scam to get your information?
  2. Have you ever been the victim or known a victim of this type of fraud?
  3. How would you handle this phone call?

Filed Under: General Tagged With: fraud, identity theft, New Traffic Light, Red Light Camera, red light cameras, Running A Red Light, scam, scams, Steal Your Identity, The Red Light, traffic cameras, Traffic Law, Traffic Light Cameras

Identity Theft And Facebook: How To Protect Yourself From Fraud

By //  by Khaleef Crumbley

It’s no secret that many people share personal information on Facebook. However, many people don’t realize that they are sometimes giving enough information to make identify theft and Internet fraud extremely easy!

How Facebook Fuels Identity Theft And Internet Fraud

Imagine that you have a few accounts with some very sensitive and/or private data and so you not only assign a password, but you also choose a couple of “security questions” that very few people could answer about you. Then you go and post the answers on a website to which over half a billion people belong!!!

At first, this idea sounds crazy, but just think about the various information that you share on Facebook and other social networks…does it still sound crazy? Think about the information that many financial institutions use in order to keep your information free from Internet fraud and identity theft:

  • Address
  • Phone Number
  • Pet’s Name
  • Street Where You Grew Up
  • Birthday
  • City of Birth
  • Favorite Book/Author
  • Favorite Movie
  • Favorite Historical Figure

I’m sure that you can think of more things to add to this list as well. Now think about how many times you have shared this information on Facebook. I can go to most of my friends’ profiles and find out their phone number, pet’s name, birthday, hometown, favorite author/book/movie, etc.

Not only are many sharing this private data, but they also fail to understand the privacy features of Facebook and other websites. For instance, Facebook is always changing their default privacy and account settings, and when those changes happen, you have to remember to make the necessary adjustments each time!

 

Identity Theft Internet Fraud Caveman
So easy…a caveman can steal your Identity

 

 

 

 

 

So, not only can your “friends” see the answers to your security questions and passwords, but so can “friends of friends”, and sometimes even perfect strangers and search engine traffic!

Status Updates And Check In Points

Do you know what you are saying when you post your current location on Twitter, or Foursquare? I’M NOT HOME, PLEASE ROB ME!!! In fact, the site PleaseRobMe.com used to post this type of information. They would search on Twitter and Foursquare, and whenever someone would post their location, or tweet about where they are, it would get posted to the “Please Rob Me website”!

They have since received a lot of publicity and decided the shut the service down, since their message of warning has finally been taken seriously – many people actually saw them as a “one-stop-shop” for robbers.

Stop Posting Your Vacation Plans!

This is another one that has become very popular! People are constantly putting their vacation plans on Facebook and Twitter in advance! All you are really telling others is, “my house will be completely empty for the next 10 days, feel free to take whatever you want…we won’t even be in the country!”.

If you want people to share in that moment, just wait until you get back and then post pictures!

Quizzes And Games

Remember that information that we listed above? Well, if you don’t include that in your profile, there are other ways to get it out of you! Think about all of those quizzes that ask you a bunch of personal questions and then you can see how well your friends know you. Be careful about what information you share!

The same concept is true with all of the games and applications that want access to your personal information in order for you to play or use them. Definitely think twice about paying real money in order to interact with these games.

In fact, one quick piece of advice is that when you are shopping online be sure to either use a service such as PayPal, or a credit card (preferably with a virtual account number). This way you are protected against various Malware that tracks your keystrokes and other information.

Final Thoughts

I recently wrote about the fact that the consequences of identity theft are becoming more severe and expensive. Being careless on Facebook is not worth the time, effort, and money that it takes to recover from identity theft and Internet fraud.

One quick piece of advice is that when you are shopping online be sure to either use a service such as PayPal, or a credit card (preferably with a virtual account number). One of the most common of the credit card benefits is fraud protection. However, this should not replace the idea of being careful and using discretion while posting information online!

photos by Don Hankins

Reader Questions

  1. Have you ever posted your vacation plans on a social network?
  2. Do you have any of the information listed above available on Facebook or some other network?
  3. Are you planning on making any changes to your profiles?

Filed Under: Personal Finance Tagged With: crimes, ethics, facebook, fraud, identify theft, identity theft, identity theft internet, internet fraud, online social networking, personal information, privacy, protect yourself from, social media, social networking, twitter, web 2.0, world wide web

4 Credit Card Benefits You Should Not Ignore

By //  by Khaleef Crumbley

We constantly hear and read about all the negative attributes of credit cards. But if we use them correctly, we can take advantage of the many credit card benefits that are available! Below are the four most prominent:

Credit Card Benefits On Items You Purchase

One of the most useful of these credit card benefits is a feature that is sometimes known as “purchase protection“. Most of the major types of credit cards will shield you from loss if you are not happy with your purchase within a certain period of time.

Imagine that you purchase a brand new HTC DROID INCREDIBLE . Then you go to set it up and realize that it’s used – the stored numbers of “mom”, “wifey”, and “Nicole” give it away! You bring it (or send it) back to the vendor and demand a refund, and they refuse to issue one (claiming that you just didn’t like the phone and you put the numbers in, just to try and return it 😮 )!

If you paid with cash, you would have to fight with the vendor in order to get your money back. However, if you made your purchase with a credit card, all you have to do is call the issuer and tell them to withhold payment to that vendor. Once you display that you are not satisfied with the item and have returned it, they will credit the charge back to your card!

Credit Card Benefits That Protect You From Identity Theft

Most credit cards also offer fraud protection. If you report your card lost or stolen and then charges are made against your account, you will only be liable for the first $50. So if someone steals your credit card and then goes out and buys a new Apple MacBook Pro , you will only have to pay $50 for the charge. Actually, many banks will even waive the $50 fee for you!

Did Somebody Say Rewards?

Many cards will offer a rewards program, that will convert your purchases into airline miles, points that are redeemable for various merchandise and gift cards, and even cash! The more that you spend, the more rewards that you can earn.

Some finance “experts” don’t like credit card rewards because they believe that these programs promote irresponsible spending. If people are buying things that they wouldn’t normally buy, just to get a few more points, then these experts are correct. However, these benefits are worth it to those who are able to manage their spending in a disciplined fashion.

Easier to Track Spending

Most banks will offer a breakdown of your monthly and annual spending online. This can be very useful when you want to get an overview of your spending. If you make all of your purchases with one card, then all of your spending will be presented to you in a nice table or graph – and you will also rack up a fair amount of rewards!

A Quick Warning

We touched on this already, but if you have had problems with making irresponsible purchases in the past, please make sure you have addressed your undisciplined financial lifestyle before considering these benefits. One or two bad purchase can easily offset these credit card benefits. If you are currently battling with debt, here are a few simple ways to cut your credit card expenses. Then be sure to check out this credit score guide to see where you stand.

photo by The.Comedian

This article was featured in the following carnivals:

Carnival: Best of Credit Cards and Money

Family Finance Carnival

Carnival of Wealth #27 – Feb 27 2011 Edition

Reader Questions:

  1. Do you use a credit card for any of the reasons listed here?
  2. Have you ever needed to call a card issuer to get a refund because the vendor refused to give you one?

Filed Under: Credit Cards Tagged With: credit, credit card, credit card benefits, Credit Cards, debit card, finance, gift card, identity theft, payment systems, Personal Finance, stored value card

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