Identity Theft 2011

Most of the information in this article comes from a newsletter by Sid Curry. It was sent to me by a friend of this blog.

I saw something very scary on one of those investigative journalism bits on the local TV news. A guy selling security services went undercover with a TV reporter and a cameraman to expose the vulnerabilities inherent in the new credit cards that have an imbedded Radio Frequency Identification Chip (RFID). You can tell if you have one of these new cards. It will have a little black circle that appears to be emanating black circular arcs that might be radio waves. The security specialist put his laptop in a backpack, wired himself up with a little probe that connected to the laptop, and headed down the street. He would walk past a “victim” and use his system to collect the data off any cards with RFID chips that happened to be in their wallet or purse. Then the TV reporter, the cameraman, and the security specialist would reveal themselves to the victim and tell them their card number, expiration date, PIN number, and address. Very scary stuff. The security company sells little wallets that protect your card from this kind of fraud. I am told they are lined with aluminum foil, but I have not verified this as fact.

Identity theft is running at about $37 Billion a year. The good news is that number is dropping as consumers become more cautious and credit monitoring services and the government become more sophisticated in fighting these crimes. Still there were 8.1 million victims of identity theft in 2010. That the number dropped from 11 million in 2009 is of little comfort to the 8 million who lost an average of $631. Also straightening out these messes is taking the consumer an average of 59 hours. This number is up from 41 hours in 2009.

Debit card fraud is increasing. Remember, your debit card is not protected by the same laws as a credit card and you may be on the hook for a larger portion of the losses. Also you may lose access to your bank account for an extended period of time.

The big news in identity theft crime is counterfeit cards. Using various methods and devices, criminals collect the necessary data and make exact duplicates of your cards.

Another disturbing trend, in 43% of these cases, the criminal was a friend or family member. Parents are even applying for credit cards in their children’s names to fraudulently obtain cash. Disgusting!

Here are 13 security suggestions from Sid Curry:

1. Don't sign the back of your credit card - put "Photo ID Required" - it puts the liability on the merchant if they don't check.

2. Print checks using initials - you need a full name to establish credit.

3. When paying credit cards, only put last four digits on the check - the credit card company will know where to apply your payment, just include payment stub.

4. Put office phone (never home phone) on checks.

5. Use P.O. Box as your address on all info if possible - most lenders will not accept a P.O. Box when applying for credit.

6. Photocopy all wallet contents (front and back). Saves time and frustration - criminals know that they have two hours to do the most damage and they know it will take you much longer to find the information to report and cancel the cards.

7. Cancel cards as soon as possible - within the first hour is preferred.

8. Immediately file a police report in the jurisdiction the crime took place -filing a report gives you creditability and often confirms that it is not friendly fraud.

9. Call all three credit bureaus to place an alert on your account.

Equifax - 800.525.6285

Experian - 888.397.3742

Trans Union - 800.680.7289

10. Call the Social Security Administration at 800.269.0271 if it has been compromised.

11. Contact the Federal Trade Commission at 1.877.382.4357 or (www.ftc.gov) - they track and shut down fraud rings but can't do it without your help.

12. Over 50.2 million consumers have credit monitoring services - it is worth the money.

13. Many banks have free monitoring services for your checking, debit cards and credit cards, SIGN up immediately. You will be instantly notified of any and all account activity.

I have an identity theft rider on my home insurance policy. It was so cheap, I just added it. At the time I knew what I was buying, but today I don’t remember the details. I think that identity theft insurance is a good idea. I also think I better check on what I am carrying I might need better coverage.

And Hey! Let’s be extra careful out there.