Identity Theft: Deter, Detect, Defend

Identity Theft: Deter, Detect, Defend

 

Identity theft is when someone uses your personal information, such as name, social security number, or credit number, without your permission, to commit fraud or other crimes.  Approximately 9 million US residents will have their identities used fraudulently each year, with an average cost of $3,500.  The Federal Trade Commission advises a three-part plan of attack to dealing with the potential of identity theft: Deter, Detect, and Defend.

 

Deter.   Keep financial information safe.  Sometimes information is obtained by stealing wallets or credit cards, so carry only what you need, do not carry your social security card, and do not have you pin number in your wallet.  Sometimes information is obtained by sifting through trash bins, so shred any trash that contains sensitive information, including free credit offers and other “junk” mail.  Finally, sensitive information may be sought through phishing, or sending emails that appear to be from legitimate institutions (banks, credit card companies, utility companies), asking you to “update,” “confirm,” or “validate” your account.  However, when you click on the link you are taken to a fake site.  The site appears real, so you may not even realize it’s a fraud until damage is done.  Never click on links in email – legitimate companies do not seek information this way.  Rather, call the company or go to their website yourself to be sure no action is needed.  Always be cautious about opening attachments in emails, no matter who sends them.

 

Detect.  Some people do not know that a thief has opened a line of credit in their name until they review their credit report or are contacted by creditors.  Check your credit report annually for free at annualcreditreport.com.  Review each report to be sure there are no lines of credit or credit cards that have been opened that you don’t recognize.  If you see any unknown credit, contact the creditor directly to find out what’s going on.  Also check the addresses – thieves sometimes file a change of address form so they can obtain credit cards at their home in your name.  If anything is wrong, correct it with the agency (Equifax, Experian, or TransUnion).  Also, it’s a good idea to review your credit card charges monthly to be sure there are no unknown charges. 

 

Defend.  If you have been the victim of fraud, consider placing a fraud alert on your credit by calling any one of the credit agencies (who will alert the other two). Anytime someone attempts to open or increase credit in your name in the next 90 days, the bank or merchant must take steps to verify that it is you.  Close any accounts that you suspect or know have been tampered with, and take steps to correct your credit report.  See ftc.gov for more information about dealing with identity theft.

 

Being aware of how identity theft works and taking simple steps to protect yourself is the most important thing you can do to protect yourself.

 

 

Holiday Budgeting

 

It’s the most wonderful time of the year…until you get the credit card bills in January.  Christmas gift-giving can cause financial stress when shopping and later when trying to pay the bills.  Here are some tips to keep your season festive while still sticking to a budget and not derailing your financial goals.

 

1.      Know your limits.  Set a budget for Christmas spending.  The four biggest categories for most people are gifts, travel, entertaining, and decorating.  But don’t forget about other items that arise – extra tips for service people in your life, holiday clothes, pictures, postage for shipping gifts, etc.  Identify these expense categories beforehand and estimate how much you can spend on each one.  Then, like your regular budget, track your expenses.

 

2.      Plan ahead.  If you can set aside money in your regular budget for a couple months ahead of time, use cash!   If you use credit, plan to pay it off within two months. Next year, plan “holiday spending” right into your monthly budget so you have enough saved by December that you don’t have to use credit.   Monitor your expenses and save your budget to help guide you next year.

 

3.      Make a list.  Jot down the names of everyone you’d like to give a gift to.   Now, see if you can make the list a little smaller.  Could you do a gift swap with your siblings or another group instead of shopping for everyone?  If money is really tight, explain to some people that you have a tight budget and can’t exchange gifts – sharing a potluck meal with friends can result in just as must good cheer as a gift.  When you have your final list, set a price limit for each gift.

 

4.      Think creatively.  Consider your own gifts – what can you make or offer someone?  Some ideas: volunteer in your child’s classroom in lieu of a gift; handwrite a letter to your parents telling them what you have learned from them; offer to make someone a home-cooked meal; or swap babysitting with a friend.  There are tons of ideas online for homemade gifts, from crafts to recipes in a jar to homemade soap.  Take a look and try something new!  If you are purchasing a gift, remember that a thoughtful gift chosen with the recipient in mind will be more meaningful than the latest gadget.

 

5.      Shop early to take advantage of deals.   Maybe.   Taking advantage of Black Friday or Cyber Monday deals is great, but be careful not to buy something just because you’re caught up in the excitement.  With smart phones and the internet, comparison shopping has never been easier.  Make sure it fits into your gift-giving plan.  And, if you do buy early, cross that person off your list and make sure you don’t keep buying for them!

 

Above all, remember the reason for the season!