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What You Need To Know About The New Credit Cards Coming Out

credit card chipDid you know that avoiding debt is not the only problem that you need to worry about when using credit cards? Another threat that you need to consider is identity theft.

Thanks to the digital age, all our information is accessible online. Hackers are able to steal our information and use it to steal from us. Once they have our information, they can use it to apply for credit and acquire stuff using it. We end up paying for all the credit purchases made by these thieves because we cannot prove that these were unauthorized transactions.

According to the press release published on FTC.gov, identity theft is the leading complaint that they got from consumers in 2014. It is 13% of the overall complaint that they got. The question is, how does identity theft happen? How exactly can thieves get our information?

One way is for hackers to copy your details through the magnetic strip of your credit card. If you notice, the current credit cards that you own have a magnetic strip on it. This contains vital information about you and allows you to purchase on credit. When thieves get this information, they can buy on credit using your data. That means all their purchases will be credited to your account and you will be left to pay for all of them.

For the past few years, the government had been looking for ways to counter these identity thieves. One of their resolutions is to protect the information taken from credit cards. There is a widespread action among financial institutions and credit card companies to replace the magnetic strip credit card and distribute cards with computer chips in them.

Features of the new credit card

An article published on USAToday.com explained a lot of things about these new credit cards. Apparently, banks in the US are already tired of paying consumers whenever it is proven that they have become victims of identity fraud. After all, it is their loss when consumers do not pay for their debts when it is proven that the transaction was unauthorized.

The solution to the problem, or at least they believe will help lower the cases of identity theft, is to change all magnetic strip cards into those with computer chips. According to the article, the magnetic strip cards are outdated anyway. A lot of countries are already using this computer chip cards and it has proven to be more effective in keeping the data of the consumers safe whenever they use their credit cards.

Here are important facts about the computer chip credit cards as taken from the USA Today article.

  • The switch to the new credit card started last year and will continue to happen within the year. This switch will not just include credit cards but also debit cards. This is a massive switch because a lot of merchants all over the country will have to switch their equipment to be able to read these new cards.
  • The computer chip equipped credit card has a metal chip embedded in front – this placement is necessary to make the information stored in it safer. The new cards also have a magnetic strip in case a merchant does not have the new equipment that will enable them to read the chip.
  • A deadline has been set on October 1, 2015 for merchants to update their equipment to allow reading of computer chips. After that, there will be a liability shift that will happen wherein the merchants will be responsible in case the consumer becomes a victim of identity theft because of the magnetic strip cards.
  • The computer chip assigns a code that is unique to every transaction that you will make. This code, even if stolen cannot be reused – which makes it pretty much useless to thieves intercepting your data during transactions.
  • Computer chips can be duplicated but it is harder to do – at least if compared to magnetic strips. The chip is actually used to prevent the duplication of credit cards.
  • When making a purchase, the new credit card will be inserted into a machine – similar to those found on ATMs. This is how the information is read.
  • At the moment, the chip will be accompanied by a signature from the consumer for added security. In the future, it is expected that the chip will accompanied by a PIN instead. It is believed that signatures are not really checked anyway so PINs should be more authentic.

Once you have this new credit card, you may able to have less fear in making purchases with it. This new card can help you enjoy a better future – at least, this is true if you can avoid too much credit card debt.

Tips to protect your credit card from identity theft

Obviously, credit cards are a staple in our wallets. The convenience that it brings cannot be replaced by cash. However, you need to make sure that you can further protect it from identity theft.

According to an article published on Time.com, almost 1 billion records were leaked in 2014. This is not primarily caused by credit cards. Some of the data were taken from the records of merchants, retail companies, and even the government archives. You are in danger of identity theft from all of these portals. While being pessimistic will not solve your problems, you are encouraged to be very vigilant when it comes to your personal data. Be very careful whenever you divulge your information – especially when it is being done online.

Fortunately, there are several things that you can do in order to keep your data from being taken by malicious individuals. Here are some tips that you may want to follow in order to protect yourself.

  • Do not just give your credit card to anyone. When you are in a store or restaurant, be conscious of the people asking for your credit card. As much as possible, keep your eyes on your card even as it is brought to the cashier. Not only that, you need to ensure that the person asking for your card is an employee of the establishment.
  • Be careful of the data you post online. The rise of identity theft incidents happened because of the growth of the digital age. People post just about anything online. Be very careful when you do this. Some thieves can use seemingly innocent posts against you. Do not make it easy for them to figure out your regular schedule. Once they know your activities, it will be very easy for them to steal from you. Do not give them that window of opportunity. Make your profiles and posts private and be wary of friend invites from people you do not know.
  • Monitor your credit report. One of the effective ways to be vigilant when it comes to identity theft is to keep a close eye on your credit report. You need to check it every now and then to see if there are entries there about transactions that you did not authorize. When you find these unauthorized transactions, you need to dispute them immediately so they can be investigated and removed if proven to be a result of identity theft.

What you need to know about identity theft is that you can prevent it if you practice vigilance and credit management. When you are careful about your own information and transactions, you can protect yourself from becoming a victim of any form of theft.

Although the new credit cards will help protect you from identity theft, it will not protect you from debt. This is a different problem that you need to deal with. To help you avoid credit card debt, here is a video that shows the common causes of this type of debt.

FTC Wants To Help You Battle Identity Theft

identity theft sign

identity theft sign illustration design over white

Identity theft continues to be a problem in our society today. This crime happens when someone uses your identity without authorization so they can buy something in credit under your name. That is how they rob from you.

When you become a victim of identity fraud, that is a clear sign that you need to implement financial management. If you are a good manager of your personal finances, it would be very hard to rob you. Thieves will find it hard to get your personal information so they can rob from you.

Some people are in deep financial trouble not because they were irresponsible with their money. Some of them had the misfortune of becoming victims of identity theft. Although they were careful with their purchases, they were unaware that someone already got their information and were opening new credit accounts under their name. When the time came for these victims to borrow money, they are surprised to find out that they are disapproved because someone loaned an amount under their name and did not pay it back. If the victim cannot prove they are innocent, they will end up paying for the money and all the penalties and interest charges associated with it.

According to a press release published on FTC.gov, identity theft was the top consumer complaint in 2014 – at least those filed with the Federal Trade Commission. This was revealed in  the 2014 Consumer Sentinel Network Data Book. It was 13% of the overall complaints filed for the whole year.

Given this information and the seemingly growing threat of this crime prompted the FTC to create a tool that will educate consumers in case they face this in their life.

FTC released a tool to help victims of fraud

The tool that was launched recently is at IdentityTheft.gov. This website shows the step by step instructions for those who are already victims of identity theft. Although you can protect yourself from this type of crime, there are thieves who are just too smart and good at what they do. In the event that you do end up becoming a victim of this crime, your next steps will determine the extent of the damage that will be done to your finances.

This is what the website wishes to solve. Based on the site, these are the things that you need to do.

What To Do Right Away

As soon as you find out that someone took your identity and is using it to steal from you, it is important to inform the company involved. For instance, if your credit card was stolen, you need to get in touch with the credit card company immediately. Let them know that any transaction done after the time the crime was committed should be taken with caution. You can ask them to freeze the accounts and ask for more identification before any transaction is to be completed. You also have to change any passwords, PIN or other security questions associated with your account.

The credit bureaus should also be alerted after. You need to raise a fraud alert on the stolen account. You only have to get in touch with one of the three credit bureaus (Equifax, TransUnion and Experian). The one you will call will tell the other two on your behalf. This fraud alert will be raised so that everytime someone uses your account, they will be asked for extra identification. That means only you can use it.

The identity theft incident should also be reported to the FTC so you can get an FTC Identity Theft Affidavit. This is one of the documents that you need to submit to the local authorities when you report the crime.

What To Do Next.

Once you have accomplished the reports needed, you need to start repairing the damage – if there is any. Check if there are any new accounts opened under your name. You need to close these. Just call the companies involved and tell them that you were a victim of identity theft and that you want to close the new accounts. The company should send you a letter confirming that the fraudulent account was closed. Make sure you keep this document in case a transaction appears in your credit report in the future.

You should also check your existing accounts in case there are charges that you did not make. You need to dispute these transactions so they will be removed from your credit report. Again, make sure the companies will send you a letter proving that the charges have been removed.

The actions that you will do is to help you correct any information in your credit report.

This website is a great way for you to know what to do about identity theft should you become a victim. Again, this crime is only destructive if you fail to act on it immediately. If you can raise the fraud alert or freeze your accounts immediately, the perpetrator will be unable to do harm to your finances or credit report.

This site also has information that you can follow in case you are a victim of specific identity theft like your tax identification, Social Security, etc. For child or medical identity theft, there are certain things that you need to do so it pays to take a look at this site. Regardless if you are a victim or not, check out this site and try to memorize what has to be done so you will know what to do in case you become a victim of identity theft.

Tips to keep yourself from being a victim of identity fraud

According to a study published on Equifax.com, there is a new victim of identity theft every two seconds. This study was done by Javelin Strategy and Research. According to the published report, victims of this crime does not only bear the financial damages. There are also emotional effects after becoming a victim of identity fraud. There is an emotional roller coaster to be dealt with while you are trying to solve the crime. And of course, the paranoia will never really leave you – even years after the incident.

This should give you more motivation to make sure that this will not happen to you. There are critical things that you need to know about identity theft so you can avoid it. Here are some tips that you need to implement in your life.

  • Always check your credit report. You are entitled to three free reports each year – one from the three major credit bureaus. All you have to do is to download a copy from the Free Annual Credit Report website. You can get one copy every four months so you do not have to spend to look at your credit report.
  • Be cautious when entering your personal and financial details online. Make sure that the website you are accessing is secure. There are logos to look at to make sure it is a trustworthy site.
  • Avoid accessing your financial records or entering your PIN or password using a public wifi. It is very easy to intercept your information if you access it through a public wifi.
  • Keep the antivirus program of your computer, laptop and other devices updated. Malwares can steal your information. Make sure your electronic devices are protected at all times. If you have to invest in a software, then do just that.
  • Stay informed. Lastly, you need to always keep yourself informed. Try to find out the new scams and techniques of criminals to get your information. Also, be aware of what you need to do in case you become a victim of identity theft.

In the end, vigilance is the best way to be protect yourself from the threat of identity theft. Although you need to trust others, it is important to know whom you should put your trust to.

The Nasty Consequences Of Identity Theft And How To Prevent It From Happening To You

appearingIt seems that identity theft used to be a problem that just happened to isolated individuals from time to time. Well, that’s no longer the case. There’s an article almost every week revealing that hundreds of thousands or even millions of people have had their identity stolen through what’s called a data breach. One recent example of this is Target Stores where a data breach exposed more than 100 million customer records at US retailers, Internet companies and banks. Then, of course, there was Sony Pictures where the Social Security numbers and other personal details of nearly 50,000 former and current employees and film actors were stolen and posted online where anyone could view them.

When it comes to individuals, one company estimates that 33% of Americans were affected by a data breach and ultimately became the victims of data fraud just last year alone. This was up from one in nine in the year 2010.

You are protected — sort of

While the banks and credit card providers often absorb false charges, it’s up to you, the victim, to clean up your credit history and recover any stolen funds. Besides the lost money, time and emotional energy you also face the ongoing frustration of not seeing anyone pay for the crime. Identity theft cases are hardly ever prosecuted. This is because local police have limited resources, plus the fact that these criminals are often overseas making it very difficult to find and prosecute them.

Making things even more complicated

What makes catching these crooks even more difficult is that they often steal or buy consumer information from one or more sources and then combine the information to create a complete dossier on potential victims. This is probably why hackers last year were able to impersonate rich and famous people to get the credit reports of Michelle Obama, Paris Hilton and even Gen. Keith Alexander who, ironically enough, was then the head of the National Security Agency.

$24.7 billion in losses

Identity theft might be a global problem but it is very difficult to measure worldwide losses. However, a study done by the Department of Justice estimated that identity theft of all kinds was responsible for losses of $24.7 billion in 2012 just in the US. This is nearly twice the $14 billion that was lost from all other property crimes including burglary and theft. Another survey found that when a credit card is used for fraud the average loss is $1251. The average loss is $2330 when a Social Security number is exposed and then used to open new accounts. It is true that banks take the biggest financial hit in these cases but out-of-pocket losses for consumers can range from an average of $63 in the case of credit cards to $280 for fraud involving Social Security numbers.

Protecting yourself from identity fraud

It may be almost impossible for you to totally protect yourself from identity theft but there are things that you can do to protect yourself as much as possible. For example, guard your Social Security numbers very closely as well as your credit and debit card information and account passwords. You should also change your account passwords periodically and try to make them more secure. Passwords like 1-2-3-4, your birthday or A-B-C-1-2-3 just don’t do the job even though they may be easy to remember.

Shred them

cutting a credit cardYou should be sure to shred any unneeded financial records and credit offers you receive. Combination shredders-wastebaskets can be purchased these days for $30 or less and would be a great investment. While credit card statements rarely include your full credit card number anymore it certainly couldn’t hurt to shred them as well.
Get your free credit report

You’re entitled to get your credit report free from the three credit reporting bureaus annually. You could contact Experian, TransUnion and Equifax and get your credit reports from them or go to the site www.annualcreditreport.com and get all three simultaneously. Some people choose to get their credit reports one at a time at four-month intervals, as this is sort of a free way to monitor their credit on a continuing basis. When you get your credit report or reports read them carefully to see if there have been any unauthorized purchases or accounts opened. If you find one or more of these, you should dispute them with the appropriate credit bureau and ultimately have them removed.

Ignore those sales pitches

If you watch any television or are on your computer for an hour or so a day you’ve probably seen sales pitches for those companies that charge a fee for credit reports, for your credit score or to monitor your credit. We have two words for this. Ignore them. As noted above, you can get your credit reports free and if you order your report from one of the credit bureau every four months you could be basically monitoring your history year around. There are also websites such as www.CreditKarma.com and www.CreditSesame.com where you can get your credit score free. It won’t be your true FICO score, which is the one that most credit providers use, but it will be close enough to give you a good idea of how you stand – credit wise.

It couldn’t hurt

Most experts suggest that you not sign up for a paid credit monitoring service as you can basically monitor your credit yourself. However, if you are told that a company you do business with has suffered a data breach it couldn’t hurt to sign up for any free credit monitoring it offers.

If your identity is stolen

If you are hit by identity fraud or theft, the Federal Trade Commission suggests that you immediately notify one of the three credit reporting bureaus and ask for a 90-day credit alert. This alert will tell businesses that you need to be contacted before any new accounts can be opened in your name. You can renew that alert every three months or if you filed an identity theft report with the police you could keep it in effect for seven years. And if you are the victim of credit card fraud, you should contact whichever company issued the card to dispute the fraudulent charges and have any bogus accounts closed.

Keep good records

It’s important to keep good records of any correspondence between you, your bank or credit bureau. Make sure you keep copies of all correspondence and reports. Whenever you send a letter to your bank, one of the credit bureaus or a credit card provider, be sure to use certified mail to get delivery receipts and when you make a phone call, keep good notes as to what was discussed and what, if anything was promised you.

8 Things You Can Do To Protect Yourself From Identity Theft

If you think that identity theft could never happen to you, you might want to think again. In 2012 alone, about 12.6 million Americans were the victims of ID theft. That was about 1 million more than in 2011. The identity thieves also made off with $3 billion more then in 2011. Plus, a big percentage of this increase was as the result of big jumps in ID theft’s most serious forms such as new account fraud. This is where a thief uses a victim’s personal information to open loans or get new credit cards. In fact, new account fraud increased 50% last year.Masked thief with bag labeled dollars

Common misconceptions

While ID theft has often been in the news, there are a number of misconceptions about it and how to best protect yourself from this crime. For example, many people worry about keeping their credit card information secure when they are shopping online. However, the top ways that ID thieves steal your data is still very low-tech. They most often get the information they need from your personal documents, via mail theft or when you give your information over the phone.

1. Stay one step ahead

You can’t totally guard against identity theft, as no one is immune. But if you have a little knowledge about how these thieves operate and use some common sense, you can stay one step ahead of them.
First, understand that ID thieves can steal your information without having your card’s number And they don’t need it to get your identity. These criminals are very crafty. All they need sometimes is a bit of your information to get the rest. Be sure to lock up all your important documents. Your birth certificates, passports, Social Security cards and other critical documents should be locked up in a safe deposit box or a safe hidden at home. This should also include any credit cards you’re not using.

Be careful about information that seems innocent but that a thief could use to steal your identity. As an example of this, you should never put your complete birthdate on Facebook or on any other social-networking websites. Also, don’t list your telephone number or home address on job-search sites or any other sites you use for business or personal reasons.

2. Watch your paper mail

It’s important to know your billing cycles. Then if a bill or credit card hasn’t arrived when it should’ve, this can mean that an ID thief has gotten your statement, gone to your account and changed your billing address. One expert on identity theft has suggested that when you order new checks you pick them up at the bank instead of having them mailed to your home. This is because stolen checks can be altered and cashed by the fraud artists. And never put outgoing mail in your mail box or door slot for the carrier to pick up. When you do this, anyone could snatch it and get the numbers of your credit card accounts and other financial information. Take it to the post office instead.

3. Review your statements

You should be have access to your credit card and bank statements online and review them carefully – preferably once a week. Look for charges for less than a dollar or two from individuals or companies with which you are not familiar. ID thieves who are about to buy a bunch of stolen credit card numbers will often first test to make sure that the cardholders haven’t cancelled the accounts. They do this by sending a tiny charge though – sometimes for just a few cents. If that succeeds, they will then purchase the stolen data and make much bigger charges. They’re guessing – and probably correctly – that you would not notice such a little charge.

4. If it looks funny, don’t use it

If you notice a store terminal or ATM that looks odd, pass on it. You need to also make sure there is nothing attached to the card slot of any ATM you use. In general, the ATM machine’s card slot should be even with the face of the machine or have only a very tiny lip. If the slot feels or looks different or the card slot has an extra fragment of plastic sticking out from, this may be a skimmer – an electronic device that was placed there by thieves to capture your information as you swipe your credit card. If you’ve inserted your card before you notice something fishy, be sure to immediately alert your bank so that it can look out for any false charges to your account.

Be sure to also watch this video with Anderson Cooper to learn what else thieves can do with ATM machines to steal you credit card number and PIN.

 5. Be sneaky

Because identity thieves are very sneaky you need to be sneaky, too. There are a few easy things you could do to keep your credit card protected if it should fall into the hands of a thief. You should sign it with a Sharpie so that a thief couldn’t erase your name and write over it You might also leave that “Please Activate” sticker on your cards. If it falls into the hands of a thief, he would know that you would have to activate that new card from a phone number that’s listed with the credit card company. They may not bother with that card because they would believe it hadn’t been activated.

6. When you’re a traveler or tourist

ID thieves love tourists and travelers. If you’re about to use a credit card when traveling watch out for strangers hovering around you at the ATM or credit card terminal. Also try to avoid public wireless Internet connections unless your smart phone or laptop has super security protection.

7. Go paperless

Some experts suggest that you should reduce the amount of mail you receive from your credit card companies, banks and other financial institutions by getting your information electronically instead. This not only eliminates the possibility of ID thieves obtaining your credit card or bank statements but also is kinder to the environment. Whatever financial statements and paper receipts you do receive should go through the shredder and not into the wastebasket. And never throw away a credit card slip. Shred anything that has your name, address and number on it.

8. Watch those checkout lines

If a cashier takes too long to return your card or turns away from you, he or she may be scanning your card into a handheld skimming terminal to get your information. But they don’t need a handheld skimmer to do this. Cashiers can easily take a picture of the front and back of your card with their cell phones or just swap out cards. When you get your card back, check it carefully to make sure that it’s yours and not another silver, gold or platinum card that looks like yours. If your card gets swapped out, you might not notice what had happened for several days, which would give the thieves plenty of time to run up charges or open new accounts.

To buy or not to buy?

Should you buy ID theft insurance? It can be helpful but read the fine print carefully. Most identity theft insurance companies will cover only the amount of money you spend to restore your identity and not the money you’ve lost. This insurance would cover money you spent to make copies of documents, phone calls, hire an attorney, and in some cases, wages you lost. However, it will not pay back the money that was stolen. Your homeowner’s insurance policy might include identity theft protection so be sure to check this out before you buy any ID theft insurance. Also check with your employer as some are beginning to include identity theft insurance as part of their employee benefit packages.

What the IRS wants you to know

There are some things the IRS believes you should know about ID theft that could be helpful. For example, it will never contact you initially via email. Second, if you get a letter from the IRS that makes it look as if your ID has been stolen, respond immediately. Third, your identity may have been stolen if you receive a letter from the IRS showing that you filed more than one tax return or if you received income from an employer you don’t recognize.

When to show your Social Security Card

You may need to show your Social Security card to a new employer or to a financial institution for tax purposes. However, do not carry the card with you routinely or other documents that have your Social Security number. Finally, you can learn more about ID theft by visiting the IRS Identity Theft Resource Page. You can find this page by typing in “Identity Theft” in the search box on the IRS’s homepage. (www.irs.gov).

9 Simple Things You Can Do To Protect Your Identity

frustrated woman with glassesDid you know that last year alone at least 12 million Americans were victimized by identity theft and that it cost them an average of nearly $5000? Having your identity stolen can have a disastrous effect on your life. It can not only cost you money but could hurt your ability to get new credit or even a new checking account. This means it’s important that you do everything you can to avoid becoming a victim of identity theft and here are 9 simple things you could do to protect yourself.

Stop those pre-approved credit card offers

Get off the mailing lists for all those pre-approved credit card offers. These are a veritable goldmine for thieves who want to steal your identity. You can stop those offers by calling 1-888-567-8688 from your home phone or go to www.optoutfreescreen.com. This is a service of the three credit bureaus and you will need to give your Social Security number if you call by phone. You can avoid having to give your SS number by going online to opt out. You can also stop other junk mail by going to www.dmachoice.org.

Make stronger passwords

Your passwords should include a minimum of 12 keystrokes and not the eight characters that are often advised. This just makes it much harder for hackers that use automatic programs to crack your passwords. Here is a good tip. To make it easier to recall passwords when you mix numerals, upper- and lower-case letters and symbols, try using your favorite poem or song as a guide. As an example of this, Robin Thicke’ song “Blurred Lines” could become blinesRT@! You could then add or change a different letter or number on each of your accounts for the best protection.

Use the post office or a secure USPS drop box

Mail all of your outgoing bills at one of these locations and not your unlocked home mailbox. This is because thieves often cruise neighborhoods looking for those little upright flags that indicate outgoing mail. They then steal envelopes that contain checks and are addressed to credit card issuers, mortgage companies and other vendors. This not only reveals your account information but thieves can actually “wash” the checks to steal money from your bank account. Another good idea is to retrieve incoming mail soon after it’s delivered to you.

Get antivirus software

A lot of the cell phone companies and Internet providers offer their subscribers free malware and antivirus software. Many of the top vendors also offer free downloads such as Avast, BitDefender, AVG and MalwareBytes. Which would be best for you? The following video describes the most popular free anti-virus programs and their strengths and weaknesses.

Protect your smart phone

It’s important to protect your smart phone with a PIN that wouldn’t be easy for a thief to figure out. Set your smart phone onto auto lock and make sure that you install an app that tracks location such as the one that’s already on iPhones but that must be activated.

Get your free credit report

You can get your credit reports free once a year from each of the three credit reporting bureaus – Experian, Equifax and TransUnion – or from www.myfico.com for $19.95. It’s important to get your reports and review them regularly because this is how you would be able to discover fraudulent credit accounts that have been opened in your name. There is also a service called the Credit Report Card where you can monitor your credit for free. It will actually update your credit scores monthly.

Buy a crosscut shredder

Dumpster diving is nasty and not very quiet but is still responsible for 4% of all ID theft cases. This means you should consider shredding items with your name, phone number and address – especially those that have key personal identifiers such as account numbers, PINs, passwords, birth dates and your social security numbers.

Think before you clickUpset man with hands on head

A good rule of thumb is to never click on links that are in emails from people you don’t know or people who say they are from some government agency. Your Uncle Sam usually sends its correspondence by snail mail. Also, don’t provide your Social Security number or other critical information to people you don’t know who called you. When you browse the Web, it’s better to type addresses into address lines rather than using links found through search engines.

Watch your doors and drawers

Be sure to keep your doors and drawers secure. Your information can’t be stolen by an identity theft that can’t access it. Make it a point to keep your computer, bank and credit card bills, Social Security cards, birth certificates and any other vital documents that have your personal information in locked drawers or behind closed and locked doors. And this may seem harsh but you need to be careful about the people who have access to your home such as work crews, household employees and even members of your family.

Avoid those identity protection services

There are a number of companies that offer ID theft protection services. They normally charge anywhere from $12 to $20 a month – or even more. The fact is you really don’t need one of these services because there is essentially nothing they can do for you that you can’t do yourself. You can protect your identity by monitoring your credit reports on a regular basis and by following the simple tips provided here. Your credit cards most likely include theft protection – limiting your liability to $50. And your bank should automatically report any suspicious activity on your checking or savings account and if it won’t, find another bank.

5 Frightening Paths That Can Lead To Damaging Debt

Stress over credit card's billDo you watch a lot of scary movies like Halloween II, II or III? Or maybe those Nightmare on Elm Street films? While you might be frightened by these movies, there are financial things that could happen to you that would be even more terrifying. These are things that could leave you and your family hurting for money or even penniless. What is the top five of these horrible paths?

The nasty effects of identity theft

How about this for a horrible scenario? You receive a harassing phone call from a debt collector about a debt that you never owed or see your car being repossessed or your cell phone service turned off because of a “delinquency.” Or even worse, you miss out on a potential job because the employer does a background check and finds that there is a warrant for your arrest for a crime you never committed.

If you think this can’t happen to you, think again. There was a survey done recently that revealed the fact that there were more than 12 million victims of identity fraud here in the US just in the year 2012. This equates to about one victim every three seconds. And the most damaging thing involved Social Security numbers.
How can you prevent this from happening to you? Be sure to protect your personal information. Don’t leave credit cards, your Social Security card or monthly bills lying around the house or in your wallet. Keep them someplace safe. When you get applications for credit cards or if you have cards you no longer need, shred them. In the event you are victimized by identity theft, contact your creditors immediately. And be sure to notify all three of the credit reporting bureaus – Experian, Equifax and TransUnion.

Hackers and scammers

You could be victimized by scams that range from sophisticated online thievery to phony charities. Their objective will be to get your credit card number. When it comes to donating money to a charity, your heart could be in the right place. But do your homework so that you won’t be scammed. Whether you’re solicited by phone or via your front door, research the charity first to make sure it’s a legitimate and reputable organization. Even more threatening are online scams. The creepiest of these is what’s called keystroke-logging malware that steals your personal information off your computer or other electronic devices. Malware can be unwittingly downloaded when you click on tainted websites, emails or links. Your information then goes to the identity thief who uses it to empty your accounts, open credit cards or even get loans in your name.

There are many other types of scams you need to watch out for and here’s a video that reveals 25 of the most popular.

The nightmare of co-signing

If you find yourself tempted to cosign for a loan with a family member or friend, make sure you understand it could turn out to be a nightmare if the person does not make good on the loan. You may not realize this but when you cosign for someone and he or she defaults on the loan, you will be responsible for repaying the debt. This can put your own credibility, finances and credit standing in danger. This may not only increase your debt but if you can’t pay back the money, you could see your bank account frozen, your credit score lowered or even your wages garnished. If you do decide to cosign on a loan, be sure to set ground rules about repayment so you can be confident that the person will do the right thing and make timely payments. If not, you will not only end up with more bills but with a ruined relationship as well.

Helpers from hell

These are people who arrive at your most defenseless moments like after the death of a spouse or divorce. Unfortunately, these people are not helpers at all. They are con artists with a scheme that works like this. A kindly and charming stranger approaches you after you were just divorced or widowed. This person offers ideas that are designed to help you overcome your grief and resolve your financial worries. The con artist showers you with attention when you are at your most vulnerable point. The con artist eventually says that he or she has run into financial problems and you feel obliged to help even though this may jeopardize your own financial situation. If you’re not careful, the person will gain more control of your finances as he or she moves closer to you.

You could be the most horrifying monsterSurviving Debt Despite Unemployment

You should not only stay on the alert for what other people can do to your life but also what you can do yourself. If you’re not careful you may be guilty of doing things that are slowly draining the money from your finances like some kind of a fiscal vampire. As an example of this, you may be paying fees from your bank that you don’t even realize. Numerous banks offer free checking and savings accounts but with conditions. You must keep a minimum amount of money in the account or make regular direct deposits. If not, you will be charged fees. If you are unaware of this, you could very quickly rack up a lot of fees without even knowing it. Another way to drain the lifeblood from your finances is by taking out too many credit cards. If you have multiple credit cards and you lose track of your statements, you could miss a payment or find yourself burdened with too much debt. The solution? Carefully monitor your credit card statements. And if you do have multiple credit cards that have varying due dates, you might call each credit card company and get your due dates changed so that they would all hit on the same day. This can help lower the risk of missing bills and payments, which you don’t want to happen as this could ultimately have a dire effect on your credit score.

Don’t Get Haunted By The Phantom Debt Scam

Woman talking on the cell phoneHave you ever tried to keep squirrels from eating seed in a bird feeder? In practically every case, the squirrels win. Why is this? It’s because the only thing they have to do in life is figure out how to rob that feeder while we have lots of other stuff to occupy us. Unfortunately, scam artists are like squirrels. No matter how hard we might work to foil them, they will find ways to steal our money. After all, that’s all they have to do in life.

It’s like Whack-A-Mole

The scams that these people create are like Whack-A-Mole. The minute the authorities figure out how to defeat one scam, another one pops up. A new one you need to watch out for is what’s called the “phantom debt” scam. In fact, the Federal Trade Commission (FTC) has said that it’s already gotten nearly 3000 complaints about this scam.

The way it works

The way the phantom debt scam works is that you receive a phone call that says something like, “this is the Civil Investigations Unit calling. There has been a complaint filed against you pursuant to affidavit number DOD – 2932. You have been named the respondent in a court action and must appear. Please forward this order to your attorney as it contains a restraining order. Your attorney or you has 24 to 48 hours to oppose this matter,” blah, blah – followed by a telephone number.

Who’s behind this?

Who’s behind this scam is a fake debt collector. Sometimes the person will use a fictitious name or will imply that he or she is affiliated with a law firm. He will threaten you. He will tell you if you don’t pay, you could suffer serious consequences such as being arrested at work, getting sued, having your bank account closed or your wages garnished. Or you may be told that you will have to appear in a court that’s thousands of miles away from your home.

If you think it’s a scam

If you do receive such a phone call and believe the caller is a fake debt collector, be sure to get his name, the name of his company, street address and telephone number. Then tell the person calling you that you won’t discuss the debt any further until you get a “validation notice” in writing. By law this notice must include the name of the creditor you owe, the amount of the debt and your rights under the federal Fair Debt Collection Practices Act.

Don’t pay

In the event that the person calling you will not give you this information, don’t pay anything. Fake debt collectors won’t always go away even when you pay them. In some cases, they will make up another debt to try to extort more money from you. Be sure to not give the person any of your financial or other sensitive information, either. These phony debt collectors will use your information to steal your identity by charging items to your credit card or by opening a brand-new credit card, checking account or savings account in your name. They may write checks that are fraudulent or even take out a loan in your name.

Another new scamDebit Mastercard

In addition to this “phantom debt” scam, there is the “automatic debit scam” you need to be wary of. Automatic debiting from your checking account can be a useful financial tool but is now being used by fraudulent telemarketers. If you get a call from someone asking for the number of your checking account or any other information on your check, treat it the same way you would for information about your credit card. Just say no.

How this scam works

The way this works is that you receive a telephone call notifying you that you’ve won a nice prize or that you qualify for a special credit card. The telemarketer will ask whether or not you have a checking account. If you answer yes, he will go on to “sell” the offer that will sound too good to not take advantage of. Towards the end of the call the telemarketer will ask you to read out all the numbers at the bottom of one of your checks. He may or may not tell you why he requires this information. If you provide the numbers, the telemarketer can then do what’s called a “demand draft” that’s processed much the same as a check but does not require a signature. When your bank gets this draft, it will pay the telemarketer’s bank just as if it was a check – and you’re out of luck.

How to protect yourself

You want to make sure you protect yourself from financial losses to an automatic debit scams. Here’s what you could do to protect yourself.

Unless you know the company and understand why it needs your information, don’t give out your checking account number to anyone you don’t know personally or with whom you don’t already have a financial relationship.

In the event a person says they are taping the telephone call, ask why. And don’t be afraid to ask questions.

As a general rule, companies will not ask for your bank account information unless you have specifically said that you will use this method of payment.

There was a law passed in 1995 that a telemarketer or seller must obtain your verifiable authorization in order to get paid from your checking account. What this means is that if a person gets your account information via the phone he or she must have your specific permission to debit your account. There are three ways this can be done. First, the caller must tell you that it will be taking money from your bank account. If you have authorized the payment from your account, they must get your authorization in writing, record it or send you confirmation in writing before debiting your account.

Just be careful

As the old saying goes, being forewarned means being forearmed. Now that you’ve been warned, you’re forearmed and should be able to avoid either of these scams.

Finally, here’s a vido with some good advice that could help you avoid debit card fraud.

What To Do About Identity Theft

The word fraud surrounded by ones and zerosYou may have heard the term identity theft but you may not know how serious this crime has become. It is one of the fastest growing ones here in the US. In fact, it accounts for financial losses of $50 billion and more. Around seven percent of all Americans have had their identities stolen or mistreated, which have cost each of these people an average of $3,500.

100 million

It gets even worse as nearly 100 million other Americans are at risk of identity theft each year when government records and corporate databases are stolen or lost. As you can see from the statistics, identity theft may be the most costly, persuasive and frequent crime in America.

Why would a person steal my identity?

There’s a simple answer to this question – to steal your money. Identity thieves can use your personal information to raid your bank accounts and buy stuff using your credit card numbers. They can open new credit card accounts in your name and change the billing address on your credit cards so that you no longer receive statements as they keep charging on the cards. An identity thief can commit phone or utilities fraud under your name, open a new checking account and write checks using your name or even take out a major loan.

What happens if my identity is stolen?

If this occurs, you’re in for a world of trouble. You will not only suffer a financial loss but may experience serious psychological pain. You can end up being harassed by debt collectors and have serious problems with your bank. In a worst-case scenario, you could even be arrested for crimes that were committed by the person who stole your identity.

What you can do to prevent identity theft

Experts in this field say that there is no way you can protect yourself 100% against identity theft. However, there are a number of things you can do to minimize the damage that can be done. For example, you should use credit cards when you travel as the credit card companies now offer their customers a zero liability policy so if your card is lost or stolen, you are protected.

When you vacation, you should use a fanny pack or travel pouch worn inside your shirt for your important documents. The reason for this is that there are pickpockets in most major cities and they are not interested in cash. What they want is your Social Security number, driver’s license and checks.

Be sure to watch out for what are called “shoulder surfers.” These are the people who try to look over your shoulder at ATMs or when you’re using a credit card to make a purchase. Be careful about using your computer in public Wi-Fi networks.

Don’t carry anything in your wallet that isn’t totally necessary. Try to leave anything that has your Social Security number on it at home. Do not make your PIN or password easy to guess and don’t have your driver’s license number on your checks.

How about those identity protection services?

While none of the identify protection services can protect you 100% from having your identity stolen, they can help minimize the damage. The way that most of them work is they continuously monitor your credit reports and your personal information. If they see that it‘s being used for retail credit, mortgage loans, utilities or wireless services, they will immediately alert you. You can then take the appropriate action such as contacting your credit card companies or other lenders. You should also notify the three credit reporting bureaus and establish fraud alerts. You might also want to ask the three credit reporting agencies to do a security freeze on your accounts so that no one but you can access your credit file.

Better to be safe than sorry

It might take some extra time and efforts to protect yourself against identity theft but it could be well worth it. If you don’t believe us, just ask anyone who has had his or her identity stolen. It can wreak havoc on your life for months or even years.

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