With all of the talk these days of an economic downturn, thieves are stepping up their efforts to make good money off of the millions of people who are caught up in the mortgage and credit crises.
I was watching the Nightly Business Report the other day and saw a report about a man who received a call from someone who claimed to be from his bank and asked him to verify his personal information. Well, to make a long story short, he gave them the info and they got him.
Federal mortgage fraud convictions have more than doubled in the past year, and the FBI expects a growth in foreclosure scams as the crisis over substandard, high-interest home loans escalates. Foreclosure rates for these mortgages, known as subprime loans, are at historic highs, according to surveys by the Mortgage Bankers Association and government records.
Phishing, password-stealing Trojans, and data security breaches are just three of the items contributing to high levels of ecommerce credit card fraud. According to CyberSource, the combined impact of ecommerce credit card fraud was estimated to be $3.6 billion in 2007
According to the Federal Trade Commission, credit card fraud accounts for 25% of the identity theft cases in 2006. In a report published by the US Census Bureau, there were 164 million credit card holders in 2003. This number is anticipated to increase to 176 million by the end of this year (2008). If the percentage of credit card fraud remains the same, that would mean there would be 44 million credit card fraud cases in 2008. That’s 44 MILLION!
So how can you protect yourself from being a victim? Here are a few preventative measures:
Don’t give out your credit card number. As obvious as this may sound, many people still do it. One reason is because these identity thieves are getting creative with how they can “scam” you into giving them your social security number. Once they have that, opening a credit card in your name is will be the first thing they do.
Shred those pre-approved credit card offers and unused cash advance checks. Don’t just toss them in the trash. Actually put them through a shredder. For higher security, purchase a cross cut shredder instead of a strip cut shredder. A cost of a decent paper shredder can range anywhere from $40 to $300 and is well worth the purchase.
Shop only through secure websites. If you want to take extra caution, Discover Card, CitiCard and Bank of America enables you to purchase online using a temporary number. You will get a different number for every purchase.
If you don’t receive your monthly billing statements, think about notifying those companies immediately. Someone may be going through your mail to get your personal information.
Always avoid clicking on any links you receive in your email from any banks even when you’re positively sure it’s from your bank. Rather, type in the full domain name and log in. Some of these emails are fake even though they look legitimate. These types of emails are called “phishing” emails.
Review your credit report annually and contact the credit bureaus immediately if you notice any strange or unfamiliar transactions. You can place a fraud alert or a freeze on your credit if necessary.
Fraud Alert. Although the three tips above can greatly reduce the chances of your identity being stolen, it is every consumer’s responsibility to be vigilent in protecting their own identity. If you think someone has stolen your identity, put a fraud alert on your credit. When you request for a fraud alert, you are asking the major credit bureaus (Equifax, Experian, and Transunion) to put a message on your credit report. This is supposed to tell creditors to verify with you if you or someone else is trying to open a new credit account.
Credit Freeze. A better option that I prefer over the Fraud Alert is putting a Credit Freeze on your credit. The difference between a fraud alert and a credit freeze is that creditors will not be able to check your credit at all with a credit freeze. You and only you can obtain a PIN to temporarily lift the freeze so that your credit application can be processed.
It’s always a good idea to keep a list of 1800 numbers for each credit card you carry just in case you need to contact them to report any lost or stolen cards. And be sure to call as soon as possible. They are just as eager as you in fighting identity theft.
See the FBI link below for common fraud schemes.