Finance Q&A: Is Identity Theft Protection Worth the Cost?
- Thursday, July 29, 2010
Editor's Note: Do you have a question about your finances? Crosswalk.com welcomes financial columnist, Deborah Nayrocker. Deborah will be answering selected readers' questions in her monthly column. To submit your question, email us at: firstname.lastname@example.org.
Dear Deborah, With all the hype about identity theft, is it worth it to pay for these programs offered on TV or through credit cards? -- Justin
These programs are designed to alert you to certain account activity and to restore the damage to your credit history. They don't necessarily guarantee you'll get your money back, however, should you become a victim of identity theft.
Stolen personal information is used in a variety of ways. IdentityTheft ShieldTM reports that "about 28% of identity theft is credit related. Other types of identity theft include phone or utilities fraud, bank fraud, employment related fraud, government document benefits fraud, loan fraud, and other forms of identity theft."
Javelin Strategy & Research reports that the ID theft cases jumped 22 percent to 9.9 million incidents in 2008. Online identity theft activity accounted for 11 percent of this crime (Money and Markets).
In 2009 Internet fraud took in close to $560 million, more than twice the amount in 2008, according to the Internet Crime Complaint Center. More recently Internet crooks are gaining access to information on social-networking sites to lure victims. C. Durst, an Internet fraud expert, reports that there are two groups of people that tend to get baited. The elderly tend to be more trusting of scammers. But the group most likely to fall for the scams are young adults.
Here are some ways you can be on guard against identity theft and online crooks:
1. Be wary about giving out any personal information by mail, internet or telephone. Make sure you're dealing with a legitimate organization. When on the Internet, look for the words in front of the last period of the URL. For example, Paypal.com is legit, but paypal.abc.com is not.
2. Be wary when you get an e-mail asking for personal information of any kind. The number of scammers sending out "phishing" e-mails is growing. Financial institutions and real businesses or Web sites rarely ask for personal information via e-mail. A scammer (posing as your credit card issuer or bank) may send a message that there's a problem and you need to contact them with account information. Or he'll send a text-message saying you've won a Walmart gift card, and there's a shipping charge, with a request for your debit card number. (Walmart does not give away gift cards, states The Better Business Bureau).
3. Beware of the window pup-ups that say your computer has been infected with a bug and that you need to click on their link to run a scan. The scammer (with a bogus company name such as Personal Antivirus) will ask for a fee to run an anti-virus program. Close the window and don't click on any links. The scammers want your money and credit card information. Worse yet, instead of cleaning up your computer, they'll infect your computer. This "scareware" scam is attacking millions of people online.
4. Be careful with your mail. Mail sensitive materials from your local post office. If you're planning to be away from home, put a hold on your mail until you return.
5. Guard your trash. Be sure you shred sensitive information like copies of credit applications or credit card offers, insurance forms, bank account information, or your social security numbers. Don't make it easy to become a victim of identity theft.
6. Pay attention to billing cycles and account statements. Examine the list of charges carefully. If your bills don't arrive on time, follow up with creditors. Most active accounts will send you bills every month.
7. Monitor your credit report. The Fair Credit Reporting Act entitles you to a free credit report from the three reporting agencies (Equifax, Experian, and Transunion) every 12 months. To get a report, go to annualcreditreport.com or call 1-877-322-8228.
To request a report by mail: Annual Credit Report Service, P.O. Box 105281, Atlanta, GA 30348-5281.
July 30, 2010
Deborah Nayrocker writes on personal money management topics, showing others how to take control of their financial future. An award-winning writer, she is a guest contributor with www.CBN.com and a finance columnist with www.Crosswalk.com. Deborah is the author of The Art of Debt-Free Living and the Bible study Living a Balanced Financial Life. Her Web site is www.artofdebt-freeliving.com.
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