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Consumer Credit : Preventing Identity Theft


Safeguarding Your Credit Record Against Identity Theft

You've probably heard of "identity theft" -- a general term encompassing the numerous ways in which criminals illegally assume the identity of another person. But did you know that, within this broad category, identity theft is particularly widespread?

In America alone, more than 8 million consumers are victimized each year. When it's finally discovered, which can happen long after the actual crime, victims report average monetary damages in excess of $7,000.

Adding insult to injury, the damages also include harm to the victims' reputations and credit reports. While it's tough to put a dollar value on these intangibles, it's certainly true that repairing these damages can be frustrating and time-consuming.

In the majority of cases, credit thieves exploit vulnerabilities in three primary areas: (1) the Internet; (2) ATM machines; and (3) telemarketing scams. Let's take a look at each of those areas in greater depth.

Internet-Based Scams

The most common Internet-based credit scam is known as phishing. Just as the name implies, these criminals are fishing for private consumer information such as bank account numbers, credit card numbers, or passwords to web sites that might grant them access to similarly sensitive information.

Typically, a phishing scheme works as follows:

  • The criminal designs an email posing as a major bank, credit card company, online payment service, or other such major e-commerce web site that routinely maintains consumer credit card data. Since graphics and language are easy to copy, these emails can appear quite convincing. Most of the time, the emails contain a notification about an important issue with the consumer's account. The emails urge the victims to follow a hyperlink immediately to remedy the situation.
  • These emails are then sent out in bulk, often by the million. Since so many emails are being sent out, some of them are bound to reach a certain number of people who actually have accounts with the companies the scammers are pretending to represent.
  • Consumers receive and read the emails and follow the fraudulent directions. Usually, this includes visiting a fake web site and attending to some administrative matter that requires the consumer to input account information, credit card information, passwords, etc.

Another approach is "vishing" a combination of the words "voice" and "phishing." Essentially, this works the same way, only instead of being asked to visit a web site to remedy the fake situation, consumers are asked to dial a phone number.

Either way, for everyone who unknowingly divulges their credit card numbers, it can take mere minutes before fraudulent charges begin accumulating. As such, Credit Counselors recommends arming yourself with the knowledge necessary to keep criminals at bay:

  • Don't click on links in these types of emails. If you want to visit your bank or credit card company's web site, type the URL directly into your web browser's address bar and then bookmark that link. That way, you can be sure you're always visiting the legitimate site.
  • Know that criminals are easily able to "spoof" email addresses. In other words, even though the return address appears to be from your bank or credit card company, it is still likely to be a fake if it asks for your attention in the manner described.
  • If you do accidentally click on a link, just close your browser window. Never enter sensitive account information after following a prompt from an unsolicited email.
  • Watch out for other email-based scams that can also affect your credit identity, such as business opportunity and "work at home" offers, false auction and retail schemes, investment offers, and of course the infamous fraudulent solicitations for assistance in moving money from one country to the United States.
  • If you suspect fraud but aren't sure, call your bank or credit card company directly. Also, don't trust any phone numbers listed in the email. Make sure to look up the phone number on a statement or in the phone book.
  • Finally, reporting such scams helps put a stop to them. We recommend reporting to the company being fraudulently represented as well as to the Federal Trade Commission (www.ftc.gov) and the Internet Crime Complaint Center (www.ic3.gov).

ATM Machine Schemes

While ATM fraud is relatively unusual, it's possible for thieves to obtain your debit/credit card numbers if they're able to obtain the card itself. Aside from direct theft (e.g., snatching it from your hands at some dimly-lit street ATM location), some criminals have devised elaborate methods to obtain your physical card. For example, one method involves inserting a plastic sleeve into an ATM's card slot. If done properly, the user's card will become jammed inside, leaving the consumer to assume the machine has simply failed to return the card. When the person eventually leaves, the thief snatches the card and makes off with it. As such, it's recommended to avoid any ATMs near which anyone is suspiciously lurking. Additionally, try to use ATMs that are in safe, well-lit areas.

Fraudulent Telemarketing

Last but not least, telemarketing fraud costs Americans $40 billion per year. While Credit Counselors recommends never divulging your credit card information to a telemarketer, you should also be on the lookout for other fraudulent telemarketing scams. Typically, the pretexts for these calls involve offers of "free prizes," (usually in exchange for a payment up-front), solicitations for charitable donations, and fake investment opportunities.

Proactive Telemarketing Tips:

  • Hang up on free prizes that aren't free.
  • If you would like to donate money to charity, it's advisable to initiate the call yourself directly to the charity or mail a check directly to the charity.
  • Don't purchase stock or make investments reactively, especially after receiving an unsolicited telephone call.
  • Sign up for the Federal Trade Commission's Do Not Call Registry at www.DoNotCall.gov to drastically reduce the number of calls made to your number.

If you have further concerns about credit identity, or need to learn more about credit reports and how they affect you, contact Credit Counselors. Our credit counseling professionals are vastly experienced in all aspects of credit counseling and debt management. Visit www.credit-counselors.cc today