Protect Yourself Against ID Theft and Credit Card Scams

Zebert L. BrownIf you’ve paid close attention to the news recently, you’ve probably heard about the millions of medical record accounts that were compromised by hackers at a major medical facility in Alabama and the retail accounts that were hacked by Target stores.  In this digital age, identity theft and consumer scams are fast becoming a big problem for consumers and retailers alike.

According to Javelin Strategies and Research, a leading consulting firm on retail merchant transactions, over 13 million consumers fell victim to identity theft in 2013 at a cost of over $18 billion. Such criminal activity also impacts retailers. According to a report by CyberSource Corp, a leading business-to-business payment processing and risk management consulting firm, retailers lost an estimated $3.5 billion in revenue to online fraud in 2012.

The leading cause of identity theft for consumers continues to be weak password protection to websites that conduct ecommerce transactions. For retailers, the problem goes a lot deeper. Most retail merchants fall victim to malicious software that seek to steal consumer Social Security Numbers, credit card numbers or bank account numbers. The good news here is banks, credit card companies and most major department store retailers take various steps to protect consumers who fall victim to identity theft offering everything from refunds on sales to discounts toward their next purchase and free identity theft protection services.

Consumer scams are a constant problem for shoppers and the scams get more elaborate over time. According to the Better Business Bureau, the top 10 consumer scams for 2013 were:

  • Medical Alert scam

  • Auction Reseller scam

  • Arrest Warrant scam

  • Invisible Home Improvements scam

  • Casting Call scam

  • Foreign Currency scam

  • Scam Texts

  • Do Not Call scams

  • Fake Friend scam

  • Affordable Care Act scam (BBB’s “Scam of the Year”)

So, what can you do to protect yourself from identity theft and prevent being scammed? Here are a few suggestions:

  1. Keep your anti-virus software up-to-date.  The best way to protect your online identity online is to keep your anti-virus software updated.  Most anti-virus programs, including the free versions, allow you to schedule your computer to receive automatic updates on a daily or weekly schedule you set.  But a word to the wise:  Unless you’re using a paid commercial version of anti-virus software, such as, Norton Antivirus or McAfee All-Access, most free versions only provide limited security features.  That doesn’t mean you can’t have decent anti-virus protection using free software.  However, it does mean you may need to utilize a combination of other anti-virus, malware and spyware programs to keep your online presence safe and secure.  One exception to the rule might be Windows 7 and Vista users since Microsoft’s Security Essentials is built into its operating systems.  But in order for its built-in security features to adequately protect your computer and keep your online presence secure, you should keep your anti-virus program up-to-date.  You can do this manually from the Security Essentials’ control panel or you can download the latest security updates using the Windows Update feature from your computer’s Control Panel.

  2. Use strong password encryption. A strong password consists of a combination of upper and lower letters, numbers and symbols (e.g., Ab1$3dC$). When deciding on a password, be creative.  Mix it up alittle.  For example, suppose I wanted to use the word “super cool” as my password. I could use, “souperkool” or “SoupERKoweL”.  I could even add numbers or special characters to strengthen the encryption making it even more difficult for hackers to decipher my password.  Whatever you do, don’t use personal identifiers such as the name of your spouse, child or family pet as your password. And if you’re still using “password” as your password, you should change it now!  I would also recommend changing your password to all Internet-capable devices at least once every 30-60 days.  If you must maintain a list, don’t save it on your computer’s hard drive.  Save it on a USB drive instead and keep it in a secure location, i.e., a locking file cabinet, away from your computer if possible.

  3. Don’t click on unfamiliar links or email attachments. Whether at home or at the office, never open email attachments or click on links from senders you don’t know or websites that are unfamiliar to you.  Keep in mind your bank, mortgage company, utility company or retail department store will never contact your via email seeking confirmation of your personal information. They will either call or send you a letter on company letterhead.  But if you suspect someone may be trying to scam you over the phone, try to get as much information from the caller as you can including the caller’s name, employee ID number, business license number, if possible, and a call-back number.  If the caller hangs up or refuses to provided the requested information, chances are it’s a scam.  Follow-up with the Better Business Bureau or your state’s licensing agency to confirm that the company is who they say they are using the information you obtain. 

  4. Shred personal documents. Destroy outdated documents such as bank statements that are more than 3 years old or unwanted credit card applications.  You can purchase a shredder at most retail department store for under $50.  An alternative to shredding your documents would be to rip them up in small pieces and dispose of the pieces in multiple trash cans to make it more difficult to scammers to look through your trash and find such unused documents.  As a last resort, you could burn such documents.

  5. Use browser security features. Internet Explorer, FireFox and Chrome all provide “InPrivate Browsing” to keep websites from tracking the websites you last visited.  Never set your website to automatically save your passwords.  This may be a convenient way to quickly log back into a website your frequent, but it’s also an easy way for hackers to obtain your password using keystroke tracking malware.

  6. Report suspected activity immediately. Monitor your bank and credit card statements frequently (online if possible) and contact your bank or credit card company as soon as possible if you notice questionable activity on your accounts.  If you suspect you’ve been scammed, you should contact the Better Business Bureau and report any information you can recall or present any correspondence or solicitations you suspect may be a scam.

That’s my blogpost for this week.  Post your comments below to join the discussion. And don’t forget to tune in next week where I’ll once again share more ways you can break the debt cycle and then go…beyond.

Zebert L. Brown is the author of Break the Debt Cycle in 3 Simple Steps and a 16 year Navy veteran with specialties in administrative management, career development and public relations. Follow him on Facebook and Twitter.

Automate Your Way to Wealth

Zebert L. Brown

Whenever I ask people what’s their #1 reason for not sticking to a budget, I normally get “lack of time” to manage it properly.  I then ask, “Have you tried automating your finances?” It’s at this point folks do that old “I Could’ve Had a V8” bonk upside the head thing.

In today’s busy world, it can be difficult to keep track of your spending especially if you’re still doing it the old fashioned way with pen, paper and calculator.  But if you automate your finances, your world will become a whole lot easier.  Trust me! 

I remember the first time I automated my finances using Direct Deposit back when it was the newest wave in banking.  At the time, I would receive paper checks because I didn’t trust the accuracy or timeliness of the Electronic Funds Transfer system.  But once I saw the benefits of it – no waiting in lines to cash my check and instant access to my money – I was hooked on the new banking technology and I haven’t looked back since.  I’ve even paid off three vehicles using auto-payroll deduction where the car payments were automatically deducted from my paycheck and my budget never missed it!

Today, there are multiple ways to ease the burden of maintaining your budget and you can increase your net worth in the process just by automating your finances.

  • Saving and Investing through Auto Payroll Deduction. The easiest way to get started in investing is to pay yourself first.  That means making regular deposits to your savings account.  But if making regular deposits into your savings account is a habit that remains elusive, you can take the strain out of the process by automating your savings using automatic payroll deduction.  The process is easy: Just contact your HR department, determine the amount of funds to be withdrawn from your pay each pay period, fill out the necessary paperwork and submit them to your bank, credit union or other financial institution and within a payday or two you should start seeing your savings increase.  You can also automate contributions to your 401(k) or IRA (whether Traditional or Roth) using auto-payroll deductions.  Not only is this a fast and effective way to increase your investment portfolio, you can also reduce your taxable income in some cases allowing more of your earnings to go into your bank account and less going to Uncle Same.  Once established, all you’ll have to do is sit back and watch your retirement nest-egg grow and grow and grow.

  • Online Bill Pay. Ever miss a payment on a bill and kick yourself for it?  You can save yourself the agony of watching all those late fees eat away at your hard earned income and stop kicking yourself in the butt in the process by paying your bills online.  In most cases, you simply log in to your creditor’s website, i.e., utility company, mortgage company, car finance company, insurance premium, etc., provide the appropriate account information and the payment is automatically withdrawn from your bank account or credit card.  The neat thing about online bill pay is you can either make a one-time payment or set up a payment schedule where a specific amount is withdrawn from your bank account at the interval you specify (i.e., once a week, bi-weekly, once a month).  There are three benefits to online bill pay: 1) your payment is usually processed within 24-hours saving you a late fee; 2) you save money on postage; and 3) you can stop or start the process, or change the payment method at your convenience.

  • Pros to automating your finances:

    • No hassle savings and investing.

    • Prompt payment processing

    • No late fees

    • Quick payment confirmation (usually via email)

    • Easy payment tracking (i.e., email confirmation, creditor’s website or banking app)

    • Saves time

       

  • Cons to automating your finances:

    • Easy to fall into that “out of sight, out of mind” mentality and forget to account for such deductions in your budget

    • Halting or changing payments made by auto-payroll deduction can take time for the required paperwork to get processed

    • An error in a payment amount could throw off your account balance and take time to correct

It’s important to monitor your banking statements and your budget in order to keep on top of your spending when automating your finances, but the pros far out-weigh the cons.  One word of caution:  You should automate your finances only when you’re absolutely sure your budget can handle it.  If your finances are tight and you’re still not comfortable with your spending being on auto-pilot, automating your finances may not be for you.  But once you get your finances on track and you start seeing consistent positive cashflow in your budget on a regular basis, I would highly recommend calling “All Systems Go” to automating your finances.

That’s my blogpost for this week. Join the discussion by posting your comments below. And don’t forget to tune in next week where I’ll once again share more ways you can break the debt cycle and then go…beyond.

Zebert L. Brown is the author of Break the Debt Cycle in 3 Simple Steps and a 16 year Navy veteran with specialties in administrative management, career development and public relations. Follow him on Facebook and Twitter.