While fraud and identity theft have been around for years, it’s easier than ever for scammers to gain access to your personal information. While there’s nothing you can do to protect yourself with 100% certainty, there are some precautionary steps that you can take to protect your identity and finances.

In this article, I’ve compiled a few general suggestions for protecting your personal information as well as some tips for avoiding e-mail scams.

Protecting your personal information

Be cautious with your personal documents. Keep your driver’s license, bank statements, credit and debit cards, checkbooks, etc. in a safe place. Beyond this, don’t carry your birth certificate, social security card, or passport in your purse or wallet unless it’s absolutely necessary.

Shred sensitive documents. Identity thieves have been known to go through garbage to get information about their targets, so be sure there’s nothing for them to find. Take care to shred not only financial statements, but also credit card offers, paycheck stubs, etc.

Don’t give out personal identification unless you have to. Please be careful with who you share your Social Security number with. Don’t be afraid to ask why it’s necessary to provide your Social Security number. Some doctors request your Social Security number for their records but you can often get away without providing it.

Be careful at the ATM. You can never be too careful. People in the vicinity of the ATM may be on the prowl for victims, and might be able to see your PIN over your shoulder. Beyond this, scammers have been known to modify ATMs to skim your account numbers. If something seems amiss, trust your instincts and move on.

Don’t carry passwords or login information with you. Either memorize this information or store it in an encrypted file on your computer. This makes it significantly harder for an identity thief to get their hands on your data.

Avoiding e-mail scams

Another common way for scammers to get their hands on your info is via e-mail. Remember, if it sounds too good to be true, then it probably is. Here are some common e-mails scams to be on the lookout for when checking your inbox.

Standard phising schemes. Scammers often pose as financial institutions and send messages alerting you to possible account tampering, etc. They then go on to direct you to a website to change your login credentials to protect yourself. The bad news is that the site that they send you to is fake, and you wind up providing them with everything they need to gain access to your accounts. Never click a link and hand over your information, no matter how real the e-mail looks. When in doubt, call the institution or manually type their web address into your browser.

Work from home schemes. These scams are often presented as opportunities to make a lot of money with little time and a “small cash investment.” You buy some sort of kit from the scammer and you either never hear from them, or your work get rejected for not meeting their standards.

Stimulus check scams. Many people have been contacted by individuals posing as the IRS or another governmental agency who ask for banking information so they can receive their stimulus check. If you receive something like this, please ignore it. The 2008 stimulus checks were sent out automatically, and there won’t be a second stimulus check. Instead, you’ll see a little more money in your paychecks due to reduced withholding.

Credit repair scams. In this case, scammers offer to miraculously remove negative information from your credit report. This is especially dangerous as they almost always ask for your Social Security number. Believe it or not, you can fix errors on your credit report yourself, so don’t get taken in.

Contest prize scams. You may get an e-mail claiming that you have won some money from a contest, and that you simply need to send in a “small processing fee” to claim it. Guess what? You’ll pay your money and never here from them again. Ignore these e-mails.

Of course, the ways in which identity thieves and other scammers work are constantly evolving. Thus, you need to be vigilant about guarding your personal data. And even if you’ve fallen victim to one of these scams in the past, you shouldn’t blame yourself. Instead, focus on getting your life and finances back in order.

As always, if you have any tips, stories, or questions, please leave a comment below. And please don’t hesitate to share this information with friends or family members.

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Related Articles at fivecentnickel.com:

» Ten New Money Scams, Part 1
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» Identity Theft Tops FTC Complaints
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» Called by a Collection Agency
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I’ve talked at length in the past about how your credit score is determined and why it’s important. Aside from paying your bills on time, one of the biggest things you can do to protect your credit score is to keep a close eye on your credit report.

While you’re entitled to one free credit report per year from each of the three major credit reporting bureaus (see #1, below), sometimes that just doesn’t cut it. Take, for example, our run-in last year with a wayward collection agency.

When we first discovered the problem, we burned through our free credit reports trying to figure out what was going on. We then needed to monitor the situation until it was resolved, so we ended up using a free trial of TrueCredit (see #3, below) to keep an eye on things.

Given the above, I thought I’d put together a list of options for getting your credit report for free. Start at the top and work your way down.

1. Get it free, the old-fashioned way. As noted above, you can go to annualcreditreport.com and get one free credit report from each of the three major bureaus.
2. Place a fraud alert on your credit report. Whenever you file a fraud alert, all three credit bureaus will automatically send you a free hardcopy of your credit report.
3. Get it from TrueCredit. A 30 day free trial of TrueCredit provides you with access to reports from all three credit bureaus plus your credit score. Just don’t forget to cancel – here’s how.
4. Get it from MyFICO. You can sign up for a free 30 day trial of ScoreWatch from MyFICO.com, which comes with access to your Equifax credit report and FICO credit score. Here again, don’t forget to cancel.
5. Get it from FreeCreditReport.com, bay-bee! Last but not least, you can sign up for a free trial of TripleAdvantage, which access to your Experian credit report. FreeCreditReport.com has gotten a bad rap in the past, so just know this… You’re signing up for a seven day free trial. If you want a truly free credit report, be sure to cancel before it ends.

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» FTC Cracks Down on ‘Credit Repair’ Scams
» Free Credit Scores from Credit Karma
» Dealing With the (Possible) Theft of Your Personal Data
» Weekly Roundup – 01/05/06
» Six Reasons You Should Review Your Credit Report
» Money Moves for 2006, Part 5: Your Family
» MyFICO ScoreWatch: Free Access to Your FICO Credit Score

Identity theft is on the rise. According to the FTC, an estimated 8.3 million consumers fall victim to identity theft in the United States each and every year. While simple steps such as placing a fraud alert on your credit record can go along way to protect you against financial identity theft, you have an even stronger tool at your disposal… The credit freeze.

What’s a credit freeze?

A credit freeze (a.k.a., a “security freeze”) allows an individual to lock their data at the major credit bureaus, meaning that it’s virtually impossible for an identity thief to do anything in your name that requires a credit report. The credit freeze concept has its roots in a 2003 California state law which caused many other states (40 at last count) to pass credit freeze laws of their own. As of late 2007, however, all three major credit bureaus began voluntarily credit freezes regardless of your state of residency.

Once you place a credit freeze, you’ll receive a personal identification number or password that can be used to temporarily lift or completely remove the freeze. While a credit freeze prevents the credit bureaus from releasing your information without your authorization, enitites with which you have an account (or collection agencies acting on their behalf) are exempt from these limitations.

The downside of freezing your credit

While credit freezes are for more effective than fraud alerts, which are actually ignored by some creditors, they’re not without their drawbacks. For example, while a credit freeze will stop new account applications in their tracks, it won’t do anything about existing accounts that have been compromised. Thus, if your credit cards are lost or stolen, you’re out of luck.

In addition, because a credit freeze completely prevents access to your credit report, having one in place can delay or prevent the approval of all kinds of applications. Given that your credit report is used for far more than just extending credit, this can be quite an inconvenience. If you go down this road, be forewarned that you might need a few days of lead time to unlock your credit report.

Another inconvenience is that a credit freeze will prevent automatic updates to your name or address. Thus, if either of these things change while you have a credit freeze in place, you’ll need to manually update this information with the credit bureaus.

The final downside is cost. For states without a credit freeze law, the default fees are $10 to place, temporarily lift, or completely remove a credit freeze. While many states mandate lower fees, it’s not necessarily cheap to do this, particularly if you envision needing to unlock your credit report frequently. This is especially true given that you have to lock/unlock your report at the different credit bureaus individually.

The good news is that, if you’re a victim of identity theft (and can prove it), then you can freeze and unfreeze your credit for free.

How can I freeze my credit?

So… You’ve read through this and you’ve decided that you want to freeze your credit. How do you go about doing it? Since the details vary from one bureau to the next, I figured it would be easiest to just link to the pertinent pages at each:

• Equifax
• Experian
• TransUnion

Photo Credit: weirdvis

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Not long ago, I received a letter stating that my personal data, including at least one old address and my social security number, may have been compromised. Needless to say, this was a bit unnerving. While I have no way of knowing whether or not this information was truly stolen, I have to assume that it was. So, what’s a guy to do?

I started by placing a fraud alert on my credit record. We also placed one on my wife’s credit report just to be on the safe side. Fortunately, all of this happened shortly after the final credit check associated with our refinance, so the fraud report didn’t cause any problems there.

The next logical step would, of course, be to check our credit reports. Unfortunately, while we’re entitled to one free credit report per year from each of the major credit reporting bureaus (Equifax, Experian, and TransUnion), we used those up last fall when dealing with a wayward collection agency.

The good news is that, having filed a fraud report, we’re entitled to receive free hard copies of our credit reports. Instructions for requesting the free report are included with the confirmation of your fraud alert, which you should receive within a few days of placing the alert. Once that’s done, we just need to keep an eye out for any suspicious activity.

According to the FTC, the following are signs that your identity may have been stolen:

» accounts you didn’t open and debts on your accounts that you can’t explain

» fraudulent or inaccurate information on your credit reports

» failing to receive bills or other mail

» receiving credit cards that you didn’t apply for

» being denied credit, or being offered unfavorable credit terms for no apparent reason

» getting unwarranted calls or letters from debt collectors

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» Ten New Money Scams, Part 1
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» The Riskiest States for Identity Theft
» Identity Theft After Death
» Late Monday Roundup – Guitar Hero Edition

How’s this for conflicting data? Just yesterday I wrote about Bank of America being among the worst “big” banks when it comes to fraudulent incidents per billion dollars on deposit, and yet…

According to a recent blurb in Bottom Line/Personal, Bank of America was (for the second year in a row) rated better than all other ‘major’ banks when it comes to protecting customers against fraud. While the scoring criteria weren’t entirely clear, Bank of America’s security measures scored 78 out of a possible 100 points.

Other well-known banks near the top of the list included JPMorgan Chase, Washington Mutual, and Wells Fargo, all of whom scored 70/100. Citibank scored 69/100, BB&T scored 68/100, and Wachovia scored 61/100. Looking at the other end of the spectrum, Bank of the West scored 35/100, Banco Popular scored 31/100, and Comerica came in last with just 24/100 points.

Interestingly, the top-rated banks in these rankings all come out near the bottom in terms of real-life performance. Hmmmm…

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If you’re interested in opening an online savings account, check this out:

FNBO Direct, Everbank. and ING Direct have all received a four star rating from Bankrate, indicating a high level of solvency and stability. If you’d like to see the complete rundown, please check out my updated list of the safest online banks.

Beyond this, ING Direct’s parent company has received high marks in terms of protecting customers from identity theft. In talking about how well different corners of corporate America do when it comes to protecting their customers, the NY Times Bits weblog put together a rundown of the estimated annual number of “incidents” related to identity theft per billion dollars in deposits for each of the 25 largest banks in the United States.

Interestingly, ING came out smelling like a rose, with just 0.085 incidents per billion dollars in deposits, whereas HSBC came in dead last*, with 21.293 incidents per billion dollars in deposits.

Other notables included Bank of America, which was second worst with 17.646 incidents/billion, Washington Mutual (3rd worst) with 16.163 incidents/billion, JP Morgan/Chase/Bank One (4th worst) with 11.306 incidents/billion, Wells Fargo (5th worst) with 10.117 incidents/billion, US Bank (6th worst) with 9.360 incidents/billion, and Citibank (7th worst) with 7.450 incidents/billion.

One thing that you’ll notice is that, even though these data are scaled against the size of the bank, it’s still the biggest banks that are doing the worst. In fact, the seven worst banks listed above are amongst the nine largest banks on the list.

Despite ING Direct’s major online presence, ING is the fifth smallest bank on the list. This makes me wonder if there’s a meaningful difference in security practices, or if bigger banks are disproportionately targeted by fraudsters because they’re so large and well known.

*Note that this is a rating of each bank overall, and not just their online endeavors.

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Awhile back, I noted that we had received a mysterious collections call, and later learned that we had been inadvertently sent to collections by our local Urgent Care facility. Unfortunately, I had used up my free annual credit reports when I first got the call, so when we later learned what was going on, I wanted to check to see if anything had subsequently shown up on our reports.

Our state actually requires the credit bureaus to give us two credit reports per agency per year, but the additional reports would’ve had to come via snail mail (much like requesting a credit report for a minor). Since I didn’t feel like waiting around, I decided to find another way to access our credit reports for free.

My search led me to TransUnion’s TrueCredit service, which is a credit monitoring and credit protection service. While their service typically costs $14.95/month, they have an introductory offer that gives you 30 days for free. The beauty of this offer is that it gives you unlimited access to all three of your credit reports. The downside is that it auto-renews, and you have to call in to cancel.

In the end, I decided to sign up with TrueCredit so I could keep track of my credit record while the collections saga was unfolding. I actually ended up sticking with them for the free month plus a paid month, as I wanted to be sure that nothing ended up creeping onto my report before I was confident that this matter was settled.

Earlier this week I checked my calendar and saw that the end of the second month was fast approaching, so I dropped by the TrueCredit website to get their contact info and cancel.

In case any of you find yourself in a similar situation, I thought I’d jot down some notes about the cancellation process:

(1) Call TrueCredit at 1-800-493-2392

(They’re only open Mon-Thurs, 8AM-Midnight; Fri/Sat, 8AM-8PM Eastern time.)

(2) Press ‘1′ for English, then ‘2′ for cancelling service

(3) Wait while you’re being transferred (I was disconnected once at this point)

(4) Tell them that you want to cancel and wade through their pleas to keep you as a customer

That’s it.

While they do their best to upsell you, TrueCredit can actually be quite useful under certain circumstances. In my case, it was well worth $14.95 to have unlimited access to my credit reports for two months while sorting things out with the collection agency. That being said, I can’t imagine paying $14.95/month on an ongoing basis for this sort of thing.

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In digging for information on how to deal with a wayward debt collector, I ran across a good bit of information on the Fair Debt Collection Practices Act. Here’s a plain English rundown of the protections that the FDCPA affords if a creditor turns your account over to a third party debt collector…

First off, according to an article from Bankrate.com, collection agencies can’t:

» Call before 8 a.m. or after 9 p.m.

» Talk to anyone but you (or your attorney, if you have one) about the debt.

» Threaten to garnish wages or seize property unless they actually intend to do so. Garnishment is illegal in some states, and in others requires a court order. In many cases, property seizure is not permitted. Check with your state attorney general’s office or state consumer protection office to find out what is legal in your state.

» Threaten to sue unless they are actually taking legal action. In some states, third-party collection agencies may not sue.

» Threaten you with arrest or jail.

» Use obscene language.

» Annoy or harass you with repeated calls.

» Call at work if you have asked them to stop.

» Falsely claim to be an attorney, a representative from a credit bureau or a member of law enforcement.

After digging though the FDCPA myself, I also learned that they can’t:

(1) Threaten you with violence or other criminal means of physical harm or harm to your reputation or property.

(2) Repeatedly or continuously call you with the intent to annoy, abuse, or harass you (although it seems like “intent” is a bit nebulous and hard to prove).

(3) Publish a list of debtors.

(4) Contact you (except for very specific purposes) if you notify them in writing that you want to cease further communication.

(5) Use false, deceptive, or misleading practices in connection with the collection of any debt (this includes the false threats of litigation mentioned above).

Beyond this, they also have to provide you with “validation” of the alleged debt (assuming that you ask for it in writing). Such validation includes the amount of the debt, the name of the creditor to whom the debt is owed, a statement that the debt will be assumed valid unless you object to it within 30 days, a statement that they will obtain verification of the debt or a copy of the judgment against the you if you object to the debt, and the name and address of the original creditor (again, if you object).

There are actually a number of other useful tidbits contained within the FDCPA, so I encourage you to give it a quick read if you’re ever faced with a call from a collection agency.

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This is certainly good news to anyone out there that is intent on protecting themselves from identity theft and/or credit fraud:

“Major credit bureaus Experian and Equifax on Thursday joined TransUnion and said they will, this year, let people in all 50 states freeze their credit histories…

The decision by all three bureaus to offer national freezes will let consumers lock down their credit histories — especially if they are victims of identity theft. Until now, a patchwork of laws in 39 states allowed consumers, to varying degrees, to protect themselves…

A credit freeze bars the bureaus from issuing your credit history, the summary of loans and payments that forms the basis of your credit score. Because few lenders will issue credit without first seeing a credit score, freezing your information means identity thieves can’t use stolen Social Security numbers to fraudulently open accounts.”

The bad news is that two of the three bureaus (TransUnion and Equifax) will charge $10 a pop to lock and unlock your credit history. They claim that they’re simply trying to cover costs, but Experian has seen fit to offer this service for free. Given that the entire business model of these companies if based on collecting and distributing our personal information, I’m hardly sympathetic to their pleas to “cover their costs” while doing so.

Nonetheless, this is a good option. And if states pass laws mandating lower (or no) fees, the credit bureaus will be forced to comply.

[Source: USA Today]

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Since I’ve recently written about dealing with found money, I thought I’d go ahead and share some thoughts about what to do if you find yourself on the other side of the situation, having lost your wallet.

1. Try to remember when you last had your wallet. This really goes without saying, but if you can remember specific points during the day when you definitely had your wallet, you should be able to narrow down the list of places where you might have lost it.

2. Check your clothes. Try to remember what you were wearing when you last remember having your wallet, and check your pockets. This goes for outerwear, too. Perhaps you slipped it into a jacket pocket when you normally wear it in your pants?

3. Check your car – or anywhere else you sit for length periods of time. I can’t count the number of times my wallet has fallen out during a long car ride, especially if I’m wearing pants with loose pockets. The same goes for finding my wallet on the floor behind my chair at work. Also be sure to double check when you get up to leave from the theater.

4. Enlist the help of those around you. Ask any friends or family that might be around if they’ve seen your wallet. Also consider asking them to help you look for it. You never know… A fresh (and unbiased) set of eyes might just spot it in a place where you’re sure it couldn’t be.

5. Call around and ask. Generate a list of places you’ve been since you last remember having your wallet and start dialing. Call restaurants, theaters, stores, etc. and ask if anyone has turned in a lost wallet. You might also consider checking with the police to see if anyone has turned in a wallet with a matching description.

6. Return to the scene of the crime. If you’ve been able to narrow down where you might’ve lost it, go back and have a look around. Phone calls are great, but it’s also possible that someone found it and posted a sign looking for the rightful owner.

7. Post signs of your own… And offer a reward. While you’re re-visiting spots where you might have lost it, consider posting signs of your own. You might also consider offering a reward. Let’s face it. People are lazy (and not always honest). The easiest course of action is to pocket the money in your wallet and then toss it in the trash. Offering them a bit of cash might be enough to prompt them to do the right thing and get in touch with you.

8. Go dumpster diving. If you’re hell bent on finding your wallet, you might also consider checking in dumpsters and trash cans in and around areas where you think you lost it. There’s a chance that someone picked it up, pocketed the cash, and then tossed it in the trash. Finding it, even sans cash, would be a huge time (and worry) saver. The odds are against you, but it couldn’t hurt to try.

If it still hasn’t turned up at this point, then you’ll want to proceed with damage control…

9. Start calling banks and credit card issuers. This is especially important for debit cards, which have less in the way of fraud protection and limited financial liability. But even with credit cards, it’s important to notify the issuer and get the old card numbers cancelled and have new cards issued as soon as possible. If you’re in the habit of carrying bank account numbers with you, you’ll also want to talk to the bank about that.

10. Take steps to protect your identity. Hopefully you were smart enough to leave things like your social security card at home, but… Even still, there’s a risk that you might become the victim of identity theft. Once you’ve notified your banks, you should also consider placing a security alert on your credit report. This warns potential creditors to take extra steps to insure the identity of the application when handling application with your name on it. If you suspect your wallet was stolen, you should also consider notifying the police and filing a report.

So there you have it… A set of quick tips for dealing with a lost wallet. Please feel free to chime in and leave a comment suggesting ideas of your own.

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Guess what? Social networking sites increase your risk of identity theft, or so says Neil Munroe of Equifax. According to Munroe:

“The problem is that people don’t realize the significance of the kind of information they are putting out on the Web and who may be accessing it. More and more consumers are signing up to these sites every day and chances are they’ll put on their date of birth, location, e-mail, job and marital status.”

He went on to say that:

“Nearly all of us can search for a name of an old friend and find all their personal details online without them even knowing. Unfortunately, the fact is that not everybody is searching for a friend.”

Equifax is thus advising consumers to limit the amount of information they make available online, especially when it comes to things commonly used for identity verification, such as birth date, mother’s maiden name (who would ever put this online?), names of kids and pets, etc. They are also advising people to make their profiles private, such that only close friends can view the information.

I guess anonymity has it’s privileges, doesn’t it?

[Source: Reuters UK]

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I’ve written in the past about how to protect yourself when writing checks (see also “Checkbook Security“), but I haven’t talked much about “check washing.” Check washing refers to the chemical removal of ink from a check that you’ve written such that fraudsters can change the amount and make it payable to themselves. Apparently check washing results in losses totalling $815 million annually in the United States.

Obviously, the best way to protect yourself from check washing is to keep your checks out of the wrong hands in the first place. But failing that, is there anything else that you can do? According to an advertisement that we received that last time we ordered checks, the answer is yes…

Apparently Eberhard Faber has come out with a pen called the Uni-Ball 207 that features a “special ink” that gets “trapped in the paper,” making check washing impossible. I have no idea how well these actually work but, for what it’s worth, these are apparently the only pens endorsed by identity thief turned identity theft expert Frank Abegnale (the subject of the movie Catch Me if You Can). Of course, as online billpay becomes the norm, this will become less and less of an issue.

Have any of you used these? If so, what did you like them? Next time I’m in the market for pens, maybe I’ll try them out.

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Late last week I received an interesting e-mail from a reader — it seems that the juicy $150 signup bonus for the Amex Business Gold Rewards might not be dead. (And yes, anyone can apply for business cards – just use your SSN instead of an EIN and use your name as the business name.)

Hi! I learned about your site thru the February New York Times article. Then I read your tip on applying for the Amex business card. I just received my new card and, when I activated it by phone, learned that it takes 8 – 12 weeks for the $100 credit to appear on your account. It’s not immediate! Just thought you and your readers might like to know about the timing on this.

So… While her point was that it’ll take a bit of time to get the $100 statement credit, the bigger point here is that it sounds like the $100 statement credit might still be alive. And don’t forget about the 5000 reward points (= $50) when you make your first purchase (this pops up when you click to “Learn More”).

The caveat here is that the signup page no longer lists the $100 credit (although the 5000 extra reward points are still definitely active). However, the offer supposedly expired back in mid-January, so if people were able to apply in mid-February and still get in on the deal, it’s possible that it’s still alive. The worst case scenario is that you get the $50 bonus, and you might get the whole enchilada.

As I’ve mentioned previously, there’s a $125 annual fee, but it’s waived for the first year.

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I recently received a review copy of a book called “Ultimate Guide to a Better Credit Score.” While I hope to do a full review at some point, I thought I’d go ahead and pull out some useful snippets here and there.

First up, let’s tackle the issue of why you should review your credit report. This is actually something that I used to do once per year but, with the availability of free credit reports, I’ve actually started doing it more frequently. Since you get one free report per year from each of the big three credit bureaus, you can now monitor things more regularly by requesting a different report every four months.

With that said, let’s get to the issue of why should you even bother?

(1) Confusion over your name. Do you sometimes go by a shortened version of your name? If so, and if you’ve ever used the different versions when applying for credit, then your report might have some errors. Unless I’m missing something, this isn’t a particularly big deal. Sure, it might cause some stuff to be missing from your report (although it shouldn’t if the bureaus are doing their job). But it’s unlikely to be a source of erroneous negative information.

(2) Wrong person. This is a very real, and potentially very damaging possibility. In fact, it happened to my sister-in-law awhile back. She checked her credit report and discovered that someone with a similar name had defaulted on their car loan in a different state, and it was showing up on her report. Fortunately, this wasn’t a case of identity theft, but it was still a pretty major occurrence in terms of the impact that it had on her apparent credit-worthiness.

(3) Bureau error. Apparently some credit bureaus transcribe your information from tapes or other written records. If the individual doing the transcribing mis-reads a number, or otherwise makes an error, it will show up on your credit report.

(4) Creditor error. I know this may come as surprise to some of you, but creditors are human, too… And they’re not above making honest reporting mistakes, and sending erroneous data to the reporting bureaus.

(5) Incomplete data. The three major credit bureaus don’t share information, so certain information may be reflected on only one or two of your reports. While this could cause positive data to be missing from one or more of your reports, a bigger problem is that you could have negative data on a subset of your reports that you might otherwise miss if you don’t regularly check all three of them.

To this, I would add one of my own:

(6) Identify theft. Keeping track of credit inquiries and what sorts of accounts are being reported in your name is a great way to detect whether or not you’ve been the victim of identity theft before angry creditors come calling.

With the exception of #6, which is always important, it’s most important to protect against #1-#5 if you’re planning on applying for credit in the near future. Maybe you’re planning on buying a house, and need to apply for a mortgage. Or maybe you’re in the market for a new credit card — either because you simply need one, or because you’re hoping to take advantage of a special offer for a 0% balance transfer, free credit card miles, or a cash signup bonus. Whatever the reason, it’s best to know that your credit report is clean before applying.

[Source: Ultimate Guide to a Better Credit Score]

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Here’s Part IV of my thoughts on Consumer Reports’ ten steps to simplifying your financial life. Today we’ll be covering steps 9-10…

(9) Safeguard your financial identity. Put your outgoing letters in a post-office collection box instead of leaving them in your mailbox for pickup. A thief might beat your mail carrier to the door. Get your name removed from offers for preapproved credit cards and insurance by going to www.optoutprescreen.com or calling 888-5-OPT-OUT. (You will have to provide your Social Security number, but the service, operated by the major credit bureaus, is legitimate.)

Don’t carry your Social Security card in your wallet. Photocopy the front and back of every card that you do carry. Keep your copies in a secure place in your home. If you lose your wallet, you’ll be able to cancel those cards quickly.

(10) Draw up a durable power of attorney. Your financial life might be the very picture of simplicity while you’re healthy enough to make your own decisions. But all of your hard work could blow up if you don’t take this final step and hire a lawyer to draft a durable power of attorney for you. A DPA will permit someone you trust to safeguard your assets and pay your bills if you get sick and can’t manage your own money.

My thoughts on these:

(9) Great advice. See also my tips for protecting your privacy and protecting yourself against identity theft.

(10) Done. I would also recommend writing a will. While you won’t be around if/when it comes into play, it’ll certainly simplify your finances for whoever has to deal with what you leave behind. And if you have kids, you should seriously consider setting up a testamentary trust.

See also: Part 1, Part 2, Part 3

[Source: ConsumerReports.com]

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Given all the attention that identity theft has been getting from the mainstream media, I thought I’d spend a little time talking about steps that you can take to protect yourself against identity theft. Yes, it’s mostly just common sense, but we can all use a reminder now and then. Please feel free to pitch in with your own ideas…

Use strong (and unique) passwords:

Use different passwords for every account, and avoid using easily available information such as your mother’s maiden name, your birthday, part of your social security number, your phone number, your street address, a series of consecutive numbers, etc.

You should also make your passwords lengthy — 8 characters minimum, even better if it’s 12+. And be sure to combine upper and lowercase letters, numbers, and symbols. Using letters and/or numbers only makes it easier to break, and thus you need to make it even longer if you choose to do so.

If you’re curious about what makes for a good password, check out one of these password checkers: Microsoft or SecurityStats (there are many others). And don’t write your passwords down! Yes, they’re hard to remember. That’s why I use a password encryption program to store everything on my PowerBook.

Secure your personal information:

Keep sensitive information away from prying eyes (roommates, service people, potential buyers when selling a home, etc.). Lock up financial statements and other sensitive documents in a filing cabinet, drop off outgoing mail that contains sensitive info in a secure USPS mailbox, and be sure to pick up your mail promptly.

Opt out of everything that you can and, when travelling, have your mail held until you return. Shred your credit card receipts, all credit offers (tearing them up doesn’t necessarily work), insurance paperwork, bank statements, etc.

Think carefully before writing a paper check to unknown individuals, don’t include unnecessary information on your checks, and take care when ordering new checks.

This should go without saying, but don’t give out personal information on the phone or over the internet unless you’re the one that initiated the contact. Don’t respond to unsolicited offers. If you’re interested in a particular soliciation, confirm that you are dealing with a legitimate entity – manually type their url into the address bar of your browser (it’s easy to cloak web addresses in e-mails) or call customer service using a known contact number (from your statement, the back of your credit card, etc.).

Don’t carry your social security card in your wallet, and don’t give out your SSN unless absolutely necessary. Ask to use something besides your SSN on your driver’s license and insurance cards, and don’t include your SSN or driver’s license number on checks. Don’t carry extraneous credit cards when you go out, and don’t leave your purse our wallet lying around (like at work).

On the computer:

Keep your operating systems, anti-virus software, and anti-spyware programs up-to-date. If you want to avoid many of the headaches associated with viruses and spyware, use a Mac… I’m only partly kidding when I say this — I use a Mac and pretty much never have to think about such things (though that might eventually change). Use a firewall, or even turn off file-sharing to prevent network access to your computer. Only submit sensitive information over secure connections (look for the little lock icon in your browser window) and don’t allow your browser to save your important passwords – instead, store them in a secure encryption program.

Monitor your credit report:

As many of you know, you are now entitled to one free credit report per year from each of the three major credit bureaus (go here for immediate access). I recommend spreading these out over the course of the year and checking one every four months such that you can detect problems as they occur. I personally wouldn’t bother with any of the paid credit monitoring services out there.

So what else can you think of? Please leave a comment if you have any further suggestions.

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Related Articles at fivecentnickel.com:

» From the Archives (December 9th – December 15th)
» Identity Theft Tops FTC Complaints
» Carnivals – Week of 12/18/06
» The Riskiest States for Identity Theft
» Carnivals – Week of 02/19/07
» One Year Ago This Week (August 20th – August 26th)
» Another Identity Theft Threat
» One Year Ago This Week (July 30th – August 5th)

Are you sick and tired of opening up your mailbox only to find a boatload of junk? What about having your dinnertime interrupted by telemarketers? Beyond being incredibly annoying, this sort of stuff can actually pose a threat to your financial well-being…

Just think of all those pre-approved credit card offers that you’ve received over the years. What if they fell into the wrong hands? And guess what? Even tearing them up into tiny pieces isn’t enough to keep the fraudsters at bay…

So what’s a guy (or gal) to do? Simple — just follow these three simple steps and you’ll be well on your way to stemming the tide of unwanted contact.

Step 1: Drop by the Direct Marketing Association’s Mail Preference Service (MPS) and opt out of unsolicited consumer mailings by doing one of two things… Either fill out their online form or print out and mail a hardcopy of the request. The hardcopy should go to:

Mail Preference Service
P.O. Box 282
Carmel, NY 10512

The only downside to doing this is that they charge a $1 fee to verify your registration and protect against fraud. This is true whether you file online (where you’ll pay with a credit card) or via mail (requires a check or money order).

Step 2: Head on over to the National Do Not Call Registry and click the link to register a phone number. Punch in your phone number, enter an e-mail address (required for verification) and click submit. Within seconds you’ll have an e-mail containing a verification link. Click that link and you’re done.

Step 3: Finally, hop on over to OptOutPrescreen.com, which is the official website for opting in or out of pre-approved (firm) credit offers. It’s operated by the major credit bureaus, so it’s legit (more details here).

Simply click the button at the bottom of the front page and you’ll be presented with three options: opt-in, opt-out online or opt-out via hardcopy. Online requests are dead easy — just enter your name, address, birthday, and SSN and then click submit. Unfortunately, such requests are only good for five years. Hardcopy requests, on the other hand, are permanent. Lame distinction, but it is what it is.

Here’s a tip: if you select the hard copy option, it’ll file the request online and then present you with a printable form to sign and mail, so you’ll end up killing two birds with one stone (and a stamp).

This is where you should send the form if you choose to do the hardcopy:

Opt-Out Department
P.O. Box 2033
Rock Island, IL 61204-2033

Bottom Line: It takes just a few minutes to do all three steps, so do it. Now. Seriously.

And if you’re an over-achiever, feel free check out bonus step #4:

Bonus Step 4: Register for the DMA’s E-mail Preference Service to (potentially) reduce your load of unsolicited commercial e-mail. I haven’t actually bothered with this one, as virtually none of the spammers that target my e-mails addresses are the sorts of folks that would pay attention to such requests. In fact, I wouldn’t be surprised if adding your name to such a list would actually result in an increase of spam if the list fell into the wrong hands. Here again, registration is good for five years, and you’ll need to click a link in a verification e-mail in order to get your address added to the list.

A few things to keep in mind:
- These measures will only affect ‘legitimate’ companies that play by the rules.
- It’ll take awhile to notice the full effects of your requests, but this stuff does help. A lot.
- Opting out can cause you to miss out on potentially profitable credit card offers.
- And remember… If you move (like we did) you’ll need to do this all over again.

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» Privacy Policy
» 1,000,000 Visitors…
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We just got a check from my mother-in-law, and guess what? She has her driver’s license printed right there at the top of her check, alongside her name and address. I can’t even begin to express how bad an idea this is. I guess it’s a good bit better than including her social security numebr, but still… Your checks already list the name of your bank, their ABA routing number, and your account number. As far as I’m concerned, that’s a scary amount of information to be handing out every time you write a check. So why would you ever want to provide would-be identity thieves with even more information than that? That’s right, you wouldn’t. So next time you order checks, make sure you don’t have anything more than your name and address printed on them.

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Here’s a slightly different twist on the typical identity theft story… A guy by the name of Jason Smith who lives in Danielsville, GA recently contacted the IRS to find out why his $600 tax refund hadn’t arrived only to learn that they were waiting for him to pay $12k in back taxes.

When Smith requested a copy of his work history, he discovered that the government believed that he was working two jobs — his regular job plus another job at a nearby chicken plant. As it turns out, an illegal immigrant named Nohe Gomez Hernandez had used Smith’s social security number to get a job at the chicken plant, and this apparent second job forced Smith into a higher tax bracket, thereby generating the income tax shortfall.

As an interesting aside, Hernandez’s attorney is arguing that he shouldn’t be prosecuted under Georgia’s identity theft law since he didn’t use the information to pilfer Smith’s bank account or rack up credit cards charges. Rather, he used Smith’s social security numebr solely to secure a job. Not surprisingly, the prosecution disagrees.

[Source: Access North Georgia]

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Related Articles at fivecentnickel.com:

» One Year Ago This Week (July 30th – August 5th)
» Identity Theft Tops FTC Complaints
» The Riskiest States for Identity Theft
» From the Archives (September 30th – October 6th)
» One Year Ago This Week (August 20th – August 26th)
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As many of you know, I manage my RSS feed through FeedBurner. As you may or may not know, FeedBurner has recently developed a mechanism for monetizing RSS feeds by placing ads at the end of posts within your feed. This program is in the process of being rolled out, and participation is currently by invitation only.

Well, last night I learned that I had been invited to participate, so I signed up to see what it was all about. Not long ago I received a welcome e-mail, and shortly thereafter I received two messages about ads being available for my feed… The problem was that, while one of these messages was meant for me, the other was clearly intended to go to Jim of pfBlueprint.

When I contacted Jim about this glitch, I learned that FeedBurner is having trouble keeping their publishers straight. In fact, he told me that when he logged in, MY payment information (including things like my social security number) came up in HIS account. Nice. Really nice. FeedBurner has now officially shared my sensitive personal information with at least one other person. Fortunately, I know and trust Jim, and I’m not particularly worried that he’ll try to steal my identity. That being said, I’m still more than a little bit pissed off right now. And I’m still not sure how many other people got this information.

After reporting this to FeedBurner I received a prompt reply thanking me for my patience while they look further into this matter. Guess what? I’m not feeling particularly patient right now.

Update: It’s still not clear what happened, but apparently it’s a glitch in the FeedBurner system, as the signup process is totally automated — thus, there’s no room for a simple data transposition. The only thing that Jim and I have in common (aside from our stunningly good looks and the fact that we run two of the best personal finance blogs in existence ) is that we both signed for the FeedBurner Advertising Network at roughly the same time last night. I should also note that the folks at FeedBurner have been very responsive and are working hard to sort out what went wrong.

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According to a study that was just released by the Federal Trade Commission (FTC), identity theft is the most-complained-about consumer fraud. Of 686,683 complaints that they receieved, 37% (255,565) were about identity theft. Number two on the list was online auction fraud, weighing in at 12%. Third? Foreign money offers (ahhh, the famous Nigerian bank scam). All in all, 46% of all complaints were somehow related to the internet. The top three major metro areas in terms of the per capita rate of consumer fraud were Washington, D.C., Tampa/St. Petersburg/Clearwater, and Seattle.

[Via: The Checkout]

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Yesterday I received what is perhaps the most convincing phishing e-mail that I’ve ever seen. It was supposedly from ’support@irs.gov’ and it offered information on how to check on the status of your tax refund. It was relatively clean from a grammatical standpoint, and it offered several links for more information. Two of these led to actual IRS web pages, whereas the third led to a website out of Italy (or at least it was registered with a ‘.it’ top level domain) that looks just like an IRS web page, and had fields for entering your name, social security number, and credit card information.

Hello, identity theft! If only they had better timing — say, sometime during or shortly after tax season rather than the middle of December — they’d probably hook an awful lot of people. In case you’re curious, here’s what the message looked like (although it also had a graphical IRS header):

You filed your tax return and you’re expecting a refund. You have just one question and you want the answer now – Where’s My Refund?

Access this secure Web site to find out if the IRS received your return and whether your refund was processed and sent to you.

New program enhancements allow you to begin a refund trace online if you have not received your check within 28 days from the original IRS mailing date. Some of you will also be able to correct or change your mailing address within this application if your check was returned to us as undelivered by the U.S. Postal Service. “Where’s My Refund?” will prompt you when these features are available for your situation.

To get to your refund status, you’ll need to provide the following information as shown on your return:

Your first and last name
Your Social Security Number (or IRS Individual Taxpayer Identification Number)
Your Credit Card Information (for the successful complete of the process) [Note: Grammar was decent until here.]

Okay now, Where’s My Refund? [Note: Link to phishing site removed.]

Note: If you have trouble while using this application, please check the Requirements to make sure you have the correct browser software for this application to function properly and check to make sure our system is available.

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If you’re interested in opting out of so-called ‘firm’ (i.e., pre-approved) offers of credit or insurance products then hop on over to OptOutPrescreen.com and let them know.

This web site is a joint venture by Equifax, Experian, Innovis and TransUnion, and it allows you to opt out from receiving firm offers for either a period of five years or permanently. You can also opt back in if you change your mind in the future and wish to start receiving these offers again.

Note that, while they ask for your social security number, you don’t have to provide it to have your request processed. Now before you rush over and opt out, keep in mind that doing so may cause you to miss out on juicy 0% balance transfer offers, etc.

From my perspective, the upside of not having pre-approved credit applications waiting to be stolen from you mailbox is well worth the loss of a few deals.

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After a flurry of reports of wayward credit card data earlier this year, things have been relatively quiet over the past few months. Until now… ChoicePoint has reportedly sent out an additional 17,000 notices to consumers warning that their sensitive financial information may have been compromised. Thieves apparently gained access to ChoicePoint’s database by posing as small business owners. This latest round of notifications brings to 162,000 the number of warnings that ChoicePoint has had to send out this year. While this is just a drop in the bucket compared to the 40 million records that were exposed by CardSystems Solutions, Inc. earlier this year and the 19 billion records that ChoicePoint maintains in its database, it’s still disconcerting. And it’s a huge deal to the 750 people that are confirmed to have fallen victim to identify theft as a result of these security breaches. As always, your best protection is to keep an eye out for questionable information on your credit reports.

[Source: ABC News]

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The FTC has compiled a list of the worst states for identity theft and, for the second year in a row, Arizona tops the list with 142.5 victims per 100,000 people. Rounding out the top 10 are Nevada, California, Texas, Colorado, Florida, New York, Washington, Oregon and Illinois. Looking for a safe state? Try North or South Dakota, which rank 49th and 50th, respectively. For an interactive map of all 50 states, click here. Even if you live in one of the ‘bad’ states, though, it’s important to keep things in perspective, as the percentage of people affected is quite small (e.g., the numbers above work out to < 0.15% of all people in Arizona). If you’re one of the affected few, then it really, really (really, really, really) sucks. But the odds of being hit by identity theft are still pretty slim, regardless of what you hear in the popular press.

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» Another Identity Theft Threat

“Death makes you an even more irresistible target to identity thieves.” It’s sad but true… According to an article that I recently ran across, you’re never safe from identity theft, not even after death. Scam artists like to target the dead because it can take much longer for fraudulent activity to be detected than if the victim were alive and kicking. They then proceed to run up charges on existing accounts, open new accounts, and even drain funds from the decedent’s deposit accounts. So how can you protect yourself? You can’t — you’ll be dead before it ever happens! But you can reduce the chances that your dear departed loved ones will be targeted. But how?

First off, keep the obituary short and sweet. The less info you give, the less a crook has to go on. Second, request a copy of the decedent’s credit report and check it for nefarious activity. Then have their report flagged with a “deceased” alert — and be sure to contact each agency individually, as they apparently don’t share death information amongst agencies. Who else should you notify? Start with the Social Security Administration, credit card companies, banks, stockbrokers, loan/lien holders, mortgage companies, etc. Note that while the federal government keeps a ‘Death Master File’ that gets transmitted to financial institutions, it can take awhile for information to trickle down to the appropriate entities, and not everyone makes it onto the list.

Note that you can even get your loved ones off mailing lists putting them on the Direct Marketing Association’s deceased ‘do not contact’ list. If nothing else, this can help people deal with the loss of their loved ones without constantly being reminded of the death by telemarketers and junk mailers. More info on the list can be found here.

What if someone you love falls victim to post-mortem ID theft? Well, you can usually clear things up pretty quickly with a copy of the death certificate. However, sorting all of this out while dealing with their death can be quite a burden, and it would certainly be best to avoid it in the first place.

For an exhaustive list of precautionary steps, as well as what to do if you suspect fraudulent activity, check out this page from the ID Theft Center. They even have sample form letters for contacting the credit bureaus, etc.

[Source: MSN/Money]

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Related Articles at fivecentnickel.com:

» One Year Ago This Week (July 30th – August 5th)
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» One Year Ago This Week (August 20th – August 26th)
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While there’s currently a lot of concern about identity theft, the hijacking of electronic accounts, and other forms of modern day fraud, not as much attention is being paid to good, old-fashioned, low-tech fraud. So… As a followup to my previous post on being careful about who you pay with a check, I thought I’d post a few tips that I recently ran across on how to avoid the alteration of your checks once you’ve made a payment, or at least how to stave off mistakes on the part of the bank. Most (all?) of these are common sense, but it doesn’t hurt to make sure that you’re doing all that you can to protect yourself…

Note that the original article in which I found these tips was targeted at small business owners. I’ve simply abstracted out those tips that are likely to be of use to an everyday-Joe. If you’re interested in a few additional tips on how to better protect your business, then you should check out the original article.

Anyway, back to the topic at hand…

First off, when writing the numerical check amount, start as close to the dollar sign as possible to prevent someone from inserting an additional number.

Next, when writing the check amount in words:

-start at the far left of the space allotted for the purpose and capitalize only the first letter,
-hyphenate all numbers from twenty-one to ninety-nine,
-use the word “and” between the dollar and the cent amount,
-following the cent amount, draw a line all the way to the right of the space

If you’re writing a check for less than a dollar:
-write the word “only” before the amount, then write the amount in words
-cross out the word “dollars” that is on the check
-circle the amount that is to the right of the dollar sign (although I’m not really sure why this would necessarily help)

Also make sure that the dollar amounts agree in both fields of the check. If there is a discrepancy, many banks will favor the numerical amount written over the words.

If writing a check to an individual who at a company, always include the person’s title or the name of the company such that the person can’t easily deposit the check into his or her own account.

If you make a mistake when writing a check, do not correct it. Rather, write “void” on the check and either file it or destroy it. Also be sure to write “void” in your check register to help your accounting records.

And finally… Never, and I mean NEVER, write a check in pencil (or erasable pen). Always use indelible blue or black ink.

Actually, if you’re dumb enough to write a check in pencil, then you probably deserve to be the victim of check fraud!

[Source: National Federation of Independent Business]

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With all the recent worry over identity theft and credit card fraud, I thought I’d post the contact info for the fraud departments at the three credit bureaus. And don’t forget to keep an eye on things using your free credit reports. Hopefully you have no need for such information but, if you do, at least you want have to dig it up yourself…

Credit Bureau Fraud Departments:

Equifax Consumer Fraud Division
P.O. Box 740241
Atlanta, GA 30374-0241
Phone: 800-525-6285
Fax: 770-375-2821
TDD: (800) 255-0056
Web: www.equifax.com

Experian National Consumer Assistance
P.O. Box 2104
Allen, TX 75013
Phone: 888-397-3742 (i.e., 888-EXPERIAN)
TDD: Use relay to contact number above
Web: www.experian.com

TransUnion Fraud Victim Assistance Department
P.O. Box 6790
Fullerton, CA 92634-6790
Phone: 800-680-7289
Fax: 714-447-6034
TDD: (877) 553-7803
E-mail (fraud victims only): fvad@transunion.com
Web: www.transunion.com

See also the ID Theft Victims Guide.

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Coming on the heels of other recent reports of wayward credit card data, MasterCard International has reported that a security breach at CardSystems Solutions, Inc. exposed more than 40 million credit accounts of all brands to potential fraud, including nearly 14 million MasterCard accounts. The data theft, which apparently occurred on or around May 22nd, included names, banks, and account numbers, but not social security numbers. Thus, the compromised data could be used to steal funds, but identity theft is less of a risk. American Express reported that a “small number” of customers were affected, whereas Discover wouldn’t confirm or deny whether or not its customers were affected, and Visa wouldn’t return calls.

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Related Articles at fivecentnickel.com:

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