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‘What’s in YOUR wallet?’ (er……Credit Report)?

The FTC recently released a report about the accuracy of credit reports.  They surveyed over a thousand people and asked them to look at their credit reports to make sure that the information was accurate.  The results shed light on a legitimate way to make yourself some money.  “How?” you ask.  By checking your credit report and disputing any errors that you find.

What this probably means, is that 1 out of every 4 people who read Consumer Courage have a credit report that contains some incorrect information.  A third of THOSE people will have credit reports that have an error that are keeping them in a lower credit tier than the one that they should be in.  (in other words: almost 10% of the people who are reading this have a credit report error that will cause them to get a loan with a higher interest rate, because of a mixup on the part of the Credit Bureau!)

CHECK YOUR OWN CREDIT REPORT REGULARLY !

The Federal Government has set up a website to let you pull your credit report from agencies, themselves for free once a year.   And, there are no shortage of consumer resources for people who have questions about their credit report. Consumer Courage has a page on Credit Reports ; The National Consumer Law Center has a concise and very helpful brochure; and the Consumer Federation of America has an entire web page devoted to credit report resources. No matter the strategy, the conclusion is the same – since what’s on your credit report can harm you, get in the habit of checking it out. 

IDENTITY THEFT/FRAUD IS NOT AS RARE AS YOU THINK

As if the prospect of being forced to pay a higher interest rate on your loan (or being denied credit altogether) wasn’t bad enough, here is another reason for you to be concerned about what’s on your credit report.  There is a new study out about identity theft by Javelin Strategy & Research, entitled  “How Consumers can Protect Against Identity Fraudsters in 2013” 

The study is a great thumbnail view of the various types of fraud that we should be on the lookout for and what you might do on a daily basis to keep from becoming a victim.  Reports like this usually start out making you uncomfortable and this one is no exception.  Among some of the other scary facts about just how prevalent Identity theft is, Javelin Strategy found that:

    • Just over 5 % of U.S. adults (more than 1 in every 20 consumers!) learned in 2012 that they were victims of identity fraud;
    • Almost 1 in 4 consumers who received a data breach notification in 2012 became a fraud victim.
      • Of particular concern is that consumers who were notified that their Social Security numbers were compromised in one of these data breach incidents were 5 times more likely to be a victim of identity fraud than all other consumers and 14 times more likely to become a victim of new‐account fraud
    • Online retail fraud increased from 41% of all fraud victims in 2011 to 45% in 2012
      The news is worse for those folks who spend a lot of time on their handheld devices (tablets/iPads and phone; but especially tablets and iPads)
    • Tablet users are almost twice as likely to be victims of fraud than all other consumers (9.6% compared with 5.3%),

There are 105 million smartphone users and 42 million tablet users in the U.S. And, they are constant targets for fraud.  Why – because your tablet/iPad/phone are always connected to the web and can be compromised at any time by malware or contaminated apps that you might have downloaded.  (Not to mention the incredible risk that a public WiFi connection brings)  

    • Tablet users are more likely to be victims of fraud than all consumers (9.6% compared with 5.3%), 
    • Tablet Owners Are 80% More Likely Than All Other Consumers to Become Fraud Victims

OK, enough w/the bad news.  Here’s the good news – you can take some very simple (and free) steps to protect yourself from Identity theft!

HERE ARE A FEW WAYS TO PROTECT YOURSELF FROM IDENTITY THEFT:

  • Of course, check your credit reports and make sure that they don’t have any errors or mistakes.  Check www.annualcreditreport.com and follow their dispute process if you encounter any errors.  (although it can sometimes be frustrating to bring a dispute, it is necessary to start the process.)
  • Check your bills!  For every monthly bill that you receive that lists charges (including your utility bills) spend the time to go through each one line-by-line to make sure that there aren’t any charges there that you don’t recognize.  If there are, call the company right away and make a dispute.
    • Hint: Some scam artists will put a small charge onto a bill for the first month to make sure that it goes through.  This way, when they place a bogus charge that is for a high amount, the credit card (or utility) company can be fooled into recognizing the scammer as an ‘authorized payee’ and approve the charge.  (If the first charge from a fake company in Belarus is only for $3.89, you are much less likely to catch it)
  • If it’s wireless, it might as well be on the front page!  (OK, so maybe that’s overstating the point a little. But, still……)  If you are on a wireless network (even if it’s in your living room) resist the temptation to sign on to your bank account to see if your check has cleared; pay a bill; or conduct any official business.  If you’re at the coffee shop and want to read the paper on the web, have at it.  But, if you want to check your credit card statement, be careful.  That guy next to you who is reading ESPN might just be waiting to hack into your account.
  • How many apps do you have?  There’s an app for everything and if they have all been downloaded onto your phone, you just might have downloaded some spyware or malware that is busy hacking your info while you are sleeping.  Apple claims that the iPhone users don’t have this worry, if their phones are up-to-date.  But, you should think about some type of virus protection for your phone if your company isn’t as confident as the folks at Apple. 
  • Don’t ignore the ‘Gee, we may have left the vault door open’ letter.  This ‘data breach notification’ letter is what your lending institution is required to send you, when they determine that THEY were the victims of fraud. (By the way, this will ONLY come in the form of a letter and will NEVER be in an e-mail.  If you get an e-mail that talks about a security breach, delete it right away!) The data breach letter usually means that your information was (or could have been) stolen and that you might be the victim of identity fraud/theft. 
    • As the Javelin study shows us, 25% of the folks who have been ‘data breach’ victims were, indeed, victims of Identity theft in 2012.  In addition, if the breach involved your social security number, you were 10 times as likely to have your identity stolen!
  • What do you do, if you get the data breach letter?
    • Call each of the credit reporting agencies (the data breach letter will have their contact info) and tell them that your data has been breached.  They will send you a copy of your credit bureau to review
    • Ask them to put some type of fraud alert on your credit report.  These can be for 90 days or 7 years.
    • Consider putting a freeze on your credit report.  This will make it nearly impossible for someone else to obtain credit under your name.  (Unfortunately, it’ll make it hard for you, too.  If there’s a freeze on your credit report, creditors will only grant you credit if they can reach you on your home phone.  Instant credit – signing up for a credit card at the register to get 20% off – will be impossible)

Whatever you do, being more diligent is a good first step.

Posted by: Mark Wiseman

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