“I know a baseball star who wouldn’t report the theft of his wife’s credit cards because the thief spends less than she does.” — Joe Garagiola
Question: Identity theft and cybercrime attacks scare me. What can I do to reduce the risk of this happening to me?
Answer: You’re right to be concerned. Although the above quote by Joe Garagiola may suggest otherwise, identity theft is no laughing matter. According to the Federal Trade Commission (FTC), fraud and identity theft are the fastest growing crimes in the nation. Florida has the highest incidence of consumer fraud in the country with 1,000 complaints per 100,000 people — almost twice the average of other states.
Identity theft occurs when someone wrongfully obtains another’s personal information to commit theft or fraud. Identity theft does not discriminate. It crosses social, educational and economic boundaries; anyone can be a victim.
Old-school thugs steal purses; pick pockets, go through mail and dumpster dive for information. With the increased use of smartphones and tablets, criminals adapted their practices and now tap these electronic devices to gather intelligence. Interestingly, the FBI reports that crimes such as bank robbery and muggings are on the decline while cybercrime is on the rise.
Sophisticated deception techniques include the “skimming” of credit and debit card information at ATM’s or gas stations. “Phishing” is another way the bad guys collect personal information. Criminals will pose as a reputable financial institution via email or on the phone and trick you into providing the personal data necessary to tap into your financial profile.
Once the culprits have your information, they’ll make purchases and change the billing address to delay your knowledge of the activity. Thieves also create new credit lines, apply for additional cards, initiate cell phone service, open bank accounts, obtain driver’s licenses and create entire new identities. Some criminals go as far as filing for bankruptcy in the victim’s name to evade creditors.
In February of 2013, 11 South Florida residents were charged in a $34 million tax refund scheme. The defendants worked with knowing participants to target victims by using businesses, bank accounts and E-filing identification numbers in their own names to execute the fraud. By using identities of real people, some deceased, they’ve filed thousands of bogus tax returns with the Internal Revenue Service. Tax refunds were received at addresses and through bank accounts the fraudsters controlled.
Who’s Watching You?
Social media is an inexhaustible source of information for lawbreakers. For instance, on most profiles, there is access to sensitive material including name, address, birthday, family relationships, employment status and daily routines. Play it safe and know that not everyone viewing your profile has your best interest at heart.
Even the youngest members of the family require protection. Thieves are 51 times more likely to target children because they can manipulate information for years before the crime may be detected. Children are easy targets because of their universal use of electronic devices. Forty-one percent of children have had a stranger try to befriend them on social networking sites, 63 percent of children have responded to online sites and 77 percent of children have downloaded a virus. Make the same effort to protect youngsters’ identity as you do for their physical security.
10 Steps to Safeguard
There’s no guarantee that you won’t be a victim, but awareness and prevention may reduce the risk:
1) Smartphones and other devices often contain more sensitive information than a wallet; treat them with the same cautionary care.
2) Sanitize or “wipe” computers and smartphones before discarding.
3) Shred all documents with any personal information.
4) Practice situational awareness when using an ATM and while speaking on the phone.
5) Only carry credit or debit cards that you’ll be using, and leave your Social Security card at home.
6) Don’t give out personal information by phone, internet or mail, unless you know whom you’re dealing with or have initiated the contact.
7) Only use “https” computer web sites or those with the padlock icon on the security status bar.
8) Secure your mailbox or consider using a post office box.
9) Don’t use obvious passwords such as birthdays or pets names.
10) Thoroughly review all credit card and bank statement transactions each month reporting any suspicious activity (close inactive accounts).
If you’re the victim of identity theft, take immediate action by phone and in writing. Document all correspondence and notify any of the three major credit-reporting bureaus, asking them to place a fraud alert on your credit report. This will put an alert on all of credit files. Notify all of the financial institutions you deal with of the breach of security, file a police report (get a copy for your records) and contact the Federal Trade Commission at 877-438-4338 or at www.consumer.gov/idtheft.
For some victims, problems are resolved quickly, but for others, it may cost hundreds or thousands of dollars and take countless hours to repair the damage. Stay focused. Trust, but verify.
Information obtained from outside sources is believed to be accurate and reliable, but we do not guarantee the foregoing material is accurate or complete. Opinions expressed herein are those of the author and subject to change at any time. “Certified Financial Planner Board of Standards Inc. owns the certification marks CFP(R), CERTIFIED FINANCIAL PLANNER(tm) and federally registered CFP (with flame design) in the U.S.”
This article provided by Darcie Guerin, CFP®, Associate Vice President, Investments & Branch Manager of Raymond James & Associates, Inc. Member New York Stock Exchange/SIPC 606 Bald Eagle Dr. Suite 401, Marco Island, FL 34145. She may be reached at 239-389-1041, email firstname.lastname@example.org Website: www.raymondjames.com/InvestmentInsights