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.

Financial Literacy…How Important Is It?

LeeHeadShot4   Financial literacy has quickly become the hot new buzz term in personal financial management, but what does it truly mean?

Financial literacy refers to having a basic understanding of how money works, as well as, how to apply knowledge and skills in financial managment to make well informed decisions concerning personal financial matters.  How you earn money, manage money, invests money or donate money to help others are all part of financial literacy.  The more knowledgeable you are about basic financial principles, the better financial decisions you are able to make.

In the wake of the Great Recession, there’s been a lot of finger pointing going on where people of all stripes have played “the blame game” where personal finance meets personal responsibility.  While it is true that many consumers acted irresponsibly taking on more debt than they could afford, it’s also true that commercial entities took on more risk than they could reasonable manage.  Nonetheless, this isn’t about whose more at fault for the present state of our nation’s economy.  It’s about what you can do to take control of your personal economy.  The truth is that for over a generation our nation has fostered a culture of consumption and debt, and that culture has led consumers to take on more debt obligations than they could reasonable afford.

I remember when I was in high school one of the mandatory courses I had to take as a senior before I could graduate was Government and Economics – or “civics” as some like to call it.  Aside from learning how our government worked, this course also taught the basics in financial management. I admit it hasn’t always been easy for me to apply those financial skills I learned back then in my every-day life as a consumer, but I do try to live by the sound teachings I learned from that mandatory course back in my high school days and I can honestly say that in applying those teaches I’ve managed to make a few prudent financial decisions along the way.

I say this to make a point:  financial literacy is something that has to be taught! You can’t just pick it up as you go along. Granted, certain aspects of financial literacy are rooted in common sense, i.e., don’t spend more than you earn, but true financial literacy requires having a keen understanding of various aspects of consumer finance, such as, how to properly calculate interest rates whether it’s the Annual Percentage Rate (APR) on a credit card, the interest rate on an Adjustable Rate Mortgage (ARM) or simple compound interest earned on a savings account.  Knowing how to “do the math” properly can help you to make better buying decisions that are sure to affect your bottom line.

It’s a fact that wages have remained flat for many Americans. As such, our overall buying power gradually decreases over time with inflation.  Unfortunately, the only alternative many consumers have to made up the difference between what they earn and what they’d like to afford is to put more and more of their purchases on their credit card, or take out a home equity loan or a line of credit against their home.  Is there any wonder then why so many people are living paycheck-to-paycheck or that fewer households have anything in savings or that many ordinary people are unable to invest because they just don’t have the extra capital to do so?  The only way to change things is for consumers to return to using sound financial principles, and it begins with implementing one common sense practice – drafting a budget and maintain it regularly.

No matter who you are, what you do or what side of the economic divide you’re on every financial planner, credit counselor or tax accountant will tell you that unless you maintain a budget on a regular basis, you’ll never know where you’re money’s going, where the excesses are, what you can do realistically to cut back on expenses or how much of your hard earned money you can put to work earning you money.

Improving your financial literacy is key to becoming a better steward of our money and will also help you to make better financial decisions.  As you consider your financial literacy skills, ask yourself the following questions:

What steps have you taken to become more financial literate?

What’s the worst financial mistake you’ve ever made and what did you learn from it?

What’s the best financial decision you’ve ever made and how did the decision improve your net worth?

What advice would you give to your partner, spouse or child concerning how to invest in their financial future?

That’s my blogpost for this week.  Become part of 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 the book, Break the Debt Cycle in 3 Simple Steps He is also a 16 year Navy veteran with specialties in administrative management, career development and public relations.  Like him on Facebook and follow him Twitter.