Financial Matters – Stuart Burns

You just opened your credit card bill and noticed a group of charges you are being billed for and never made.  The questions run through your mind like how could someone use my card?  Why did the merchants let these charges go through?  What do I need to do now?  This month we are going to take a look at a topic which most of us will run into in one form or another – Identity Theft.   Arizona happens to be one of the top states where Identity Theft occurs.  We will learn more about identity theft and what you can do to protect yourself from becoming a victim of fraud and identity theft.
1.     What is identity theft?
The term Identity Theft is used to refer to any crime involving the illegal use of another individual’s identity.   Here are some facts about Identity Theft:

  • The number of identity fraud victims in the US has increased 12% in the last 5 years
  • The financial impact of Identity Theft is now about $54 billion annually
  • 18-24 year olds are the most at risk

The most common forms of identity theft are:

  • Drivers License Id
  • Social Security Id
  • Medical Id
  • Character Id
  • Financial Id

True or False — Identity Theft is more prevalent through the internet.   The answer is FALSE – there is not a higher likelihood but you should continue to make sure you are on a secured website when giving out personal information.
 2.     Who steals identities?
The largest % of identity theft is committed by someone the victim knows.

  • Because of media attention, most people believe the theft and resulting fraud is perpetrated through the internet by persons unknown.  This is false and in over ½ the cases the identity thief is someone that the victim knows.
  • 19% are relatives and 14% are friends or roommates.  In these cases the identity thief has pretty easy access to the wallet or personal information.

The best advice is to keep personal information in a secured area or locked file cabinet.
3.     How does identity theft happen?
 Most cases of identity theft occur through the following means:

  • Theft of personal information
  • Breach of internet security
  • Group identity theft
  • Phishing, Vishing, Smishing
    • Phishing can be emails that attempt to look legitimate to get a response with personal information (“I am an attorney in different country and your relative you never knew just passed away and left you millions if you send me your bank account number, social security, etc)
    • Vishing is using voice mails (“please call 800 …”).
    • Smishing is the latest activity using cell phones to send text for information.   

True or False: Most people discover they are victims of identity theft by monitoring their own accounts.  This is True.  According to a FTC survey, 52% of all ID theft victims discovered the theft my monitoring their accounts either by reviewing statements or through their credit report.  We will discuss the importance of this in a moment.
 4.     How is the information used after stolen?

  • 26% use the information for Credit Card fraud – such as either taking your card directly and making charges or opening accounts in your name and making charges
  • 18% commit Utility Fraud.   Many times someone needs good credit for a new electric, gas, or water account.
  • 17% are in Bank Fraud.  Opening accounts in a fraudulent identity and overdrawing the account.
  • 12% use the information for Employment Fraud.  Normally someone without a social security number using a valid social security number to get a job
  • There are other types such as Loan Fraud, Government Fraud, and Criminal Fraud.
  • Medical Fraud is starting to grow but this can also lead to wrong treatments.

5.     Is there any help to stop this activity?
The Fair and Accurate Credit Transactions Act provides some help for consumers after they become victims of identity theft.
The act requires:

  • Credit reporting agencies to stop reporting allegedly fraudulent account information when a consumer establishes that he or she has been the victim of identity theft;
  • Creditors or businesses to provide copies of business records of fraudulent accounts or transactions related to them.

This information can assist victims in proving that they are, in fact, victims.
6.     How can I stop this from happening to me?

  • Get the free copy of your credit report on a yearly basis and make sure the information is valid
  • Shred all personal information, receipts, and junk mail
  • You can choose to opt out of pre-screened credit card offers
    • Call 1-800-567-8688
    • Read all bank and credit card statements
    • Guard your social and other personal information

You can protect yourself from identity theft by using the guidelines discussed and remember to always:

  • Protect your personal information
  • Check your credit report and statements on a regular basis
  • Use the 5 steps listed above to avoid being a victim

 
Keep your eyes open for upcoming Father Matter’s seminars and I hope to see you soon.

For some great financial tools and resources go to:   http://learn.bankofamerica.com/money-management/ and http://www.bettermoneyhabits.com  or contact Stuart Burns at 602-464-1381 or email me at stuart.j.burns@bankofamerica.com