Month: September 2016

Identity Theft is Not a Joke Jim!

Published on in Identity Theft by RyanLaw

Watch this first:

Identity theft really is a problem that affects millions of people each year. It causes untold numbers of hours and dollars to fix the problems.

While it is impossible to stop all identity theft, there are some simple steps you can take to protect yourself better.

Shred Documents with Your Personal Information

You should shred any document from a financial institution, any pre-approved credit card offers, and any other documents with your personal information on it. Shredders that shred in long strips don’t work – thieves can tape together the strips (and will tape them together) and get your information or apply for credit. Some sites suggest simply tearing up and throwing away pre-approved credit card offers. Does that work? Check out this site for your answer:

http://www.cockeyed.com/citizen/creditcard/application.shtml

Use a cross-cut shredder to make sure it is fully destroyed.

Opt-out of Receiving Pre-Screened Credit Card Offers

On the website https://www.optoutprescreen.com/ you can opt-out of receiving pre-approved credit card offers. Eliminating these from your mailbox is one less thing for thieves to be able to steal.

Protect Your Social Security Number

Don’t carry anything with your Social Security number printed on it. Check your wallet or purse to see if you are carrying your social security card OR any other item with your Social Security number printed on it. Thieves really only need this one piece of information to steal your identity, so taking steps to keep it safe will help you keep your identity safe.

Don’t reply to “Phishing” E-mails

Never reply to e-mails for requests for any personal information, even if it looks like it is coming from your bank. Your bank will never request personal information via e-mail.

Put a Credit Freeze on Your Credit Report

One of the most effective things you can do to protect your identity is to freeze your credit. A credit freeze prevents the information in your credit file from being reported to anyone.

If a thief does steal your identity they can’t open new credit because your record is frozen. This will also prevent you from opening new credit unless you plan ahead and “unthaw” your credit report for a period of time.  Credit freezes and unthaws do cost money, but think of the money spent like an insurance policy. Here are the websites to freeze your credit report:

https://www.freeze.equifax.com/Freeze/jsp/SFF_PersonalIDInfo.jsp

https://freeze.transunion.com/sf/securityFreeze/landingPage.jsp

http://www.experian.com/consumer/security_freeze.html

Check Your Credit Report

It is important that you check your credit report on a regular basis. You can get one free copy of each of your credit reports annually by visiting www.annualcreditreport.com. A strategy I use is to check one of the reports every 4 months – that way I am checking it out on a regular basis. If there are any errors or accounts you don’t recognize you need to take steps right away to get it taken care of.

Pay with Cash

A while back I got a call at 7:30 in the morning on a Saturday from the Fraud Department at my bank. My credit card number had been used for an online purchase that seemed uncharacteristic (it was a Jewish dating site), and the Fraud Department was calling to find out if my wife or I had used our card there. We had not, so they immediately closed down the card and issued a new number. When we tried to figure out how it happened we realized that the most likely scenario was when we used our debit card the last time we ate out. When the waiter/waitress takes your card and disappears with it for 2-3 minutes it is easy for them to snap a photo of the front and back using their cell phone. We now pay with cash anytime we eat out.

To review, you can help prevent identity theft I recommend that you:

  • Shred documents with your personal information
  • Opt-out of receiving pre-screened credit card offers
  • Protect your Social Security number
  • Don’t reply to “Phishing” e-mails
  • Put a credit freeze on your credit report
  • Check your credit report
  • Pay with cash

What about identity theft insurance? Is it worth the cost? I’ll review what it is and my opinion about it in my next post.

 

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How to Protect Yourself from Banking Fraud

Published on in Banking, Consumer Protection Laws, Personal Finance by RyanLaw

wellsfargoBy now you’ve probably heard about Wells Fargo and the $190 million fine they are being issued because their employees created more than 2 million unwanted deposit accounts and credit cards for their customers. Because of the scandal 5,300 employees have lost their jobs. Wells Fargo customers have paid hundreds of thousands of dollars in fees for these unwanted accounts.

Why did the employees create fake accounts?

The employees are paid an incentive for every new account or credit card they opened. They might get $3 for signing someone up for online banking, or $5 to open a savings account, or $20 if they open a new credit card. Imagine the incentive there – if an employee making minimum wage could open 2-3 new cards a day, that makes a big difference in how much they take home.

How did so many accounts get opened without customer’s knowing about it?

Some customers did notice, and they would get the accounts closed. Others probably noticed, but didn’t take the time to get them closed. Others probably didn’t notice it. Far too many people don’t really pay attention to their accounts or even their balances.

Let’s put a few things in perspective

  • 5,300 employees are a tiny portion of Wells Fargo’s workforce. They have 265,000 employees, so 5,300 is only 2% of their work force. Also, the firings took place over several years, not just today as most news stories are indicating. The majority of Wells Fargo employees are honest and wouldn’t do something like this. Will they encourage you to open a credit card? Sure. They might take home $20 if they can convince you, but most of them would never dream of opening one up for you after you said you weren’t interested.
  • $190 million means nothing to Wells Fargo. They are worth $250 billion, so $190 million is only .076% of the bank’s net worth. If you have a net worth of $200,000 a fine of .076% would be $152. Annoying? Sure. But it isn’t going to cause any trouble to your budget or your net worth. Some people have asked if the fine is high enough. It probably isn’t.
  • Wells Fargo has agreed to change their sales practices and provide more oversight, and anyone who paid fines or fees will receive a full refund.
  • Many banks offer their employees these types of incentives. The more accounts a person has with a bank the more tied in they are, and the harder it is to leave. Employees are incentivized for helping tie you in with that bank for life.

What can you do to protect yourself?

There are a few simple steps you can take:

  • Watch your accounts. Be sure to check your accounts regularly to make sure nothing is being charged or added to your accounts.
  • Keep things simple. You don’t need 12 accounts at 9 different banks in the area. You should have one main bank. If you have little accounts open at other banks because you got a free toaster for opening an account, get them closed.
  • Switch to a local credit union. Credit unions are owned by their members, and they charge fewer and lower fees and will give you better rates on loans. You can also get to know the managers. Most of them are happy to meet with their members and will help you out if there is a problem.
  • There is no reason for you to pay any maintenance fees on your checking or savings accounts. There are plenty of credit unions and banks that have free checking and savings accounts with no minimum balance requirements and no limit on the number of transactions you can make per month.

I encourage you to be proactive about your banking by taking these simple steps to protect yourself.

And if you have a Wells Fargo account, pull up your online banking and make sure no accounts were opened for you that you didn’t want or ask for. Check for fines and fees you shouldn’t have paid. They will be contacting their customers to let them know how to get a refund.

 

Picture credit: http://therealdeal.com/issues_articles/wells-fargo-go-go/

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