Know the latest credit card fraud techniques
Identity thieves and credit card fraudsters constantly develop new methods of stealing information from consumers. While many Americans think their information is safe, it is important to be aware of both common and unusual new ways criminals are targeting identity theft victims, especially during the holidays.
Judd Rousseau is chief operating officer and director of fraud operations at Identity Theft 911, a company that creates identity theft resolution, education and deterrence products. He says that there are three main ways identity thieves find their information.
1. When information is stolen through a security breach with a major business, whether through hacking or stealing laptops.
2. When thieves dive into dumpsters to find information that companies or consumers have not shredded.
3. Mailbox theft. "Thieves know that credit card applications come in the mail, and sometimes they will use those, but they are looking for anything with information -- especially things like tax returns or medical forms that may have your Social Security number on it," Rousseau says.
Identity thieves who are desperate for information sometimes resort to more creative scams. Many sandwich shops offer coupons for a free sub. Some thieves have taken to buying up a number of these coupons, and picking up a similar number of credit card applications. These criminals go to a shopping mall or other highly-trafficked area and ask people to sign up for a credit card to get a free sandwich. Once the victim has filled out the application, the thief has all their personal information, including a Social Security number. To an identity thief, this information is much more valuable than the cost of a hoagie.
Another way identity thieves steal credit card information is through the use of camera phones. As the cardholder uses their card at an ATM or somewhere else where the card number is publicly visible, the nearby thief snaps a photo. Cardholders using ATMs or taking their credit cards out in public should survey their surroundings to see if anyone nearby has a camera phone out or appears to be taking a look at the card number. Try and keep the actual card number obscured by your hand when you take it out from a wallet, and if you are using a debit card, block the keypad with your hand or body when you enter the PIN number.
Rousseau says the holidays are when consumers are the most vulnerable, and has six tips on how to avoid becoming a victim of identity theft:
1) Utilize your credit card instead of your debit card when you're doing holiday shopping because credit cards carry more protection. With your debit card, after two days, you are liable for up to $500 in unauthorized charges. After 60 days, you're liable for all of it. Many credit cards have zero-liability rules in which you owe nothing for unauthorized charges.
2) Choose just one credit card to go holiday shopping with rather than putting all of your cards at risk.
3) A great tool not for prevention but to mitigate damages is to monitor your accounts online and have alerts set up. People are afraid of technology, but it's to the consumer's benefit to take advantage of online avenues.
4) You can't rely on everyone else to protect your data for you. Be cautious about opening new card accounts to grab a discount. Each credit inquiry from a lender "dings" your credit, and during the holidays, temporary or seasonal workers may not be as careful as possible with your sensitive financial information.
5) This time of year is very popular with phishing scams, in which you'll get an e-mail from a legitimate-looking company asking for your personal information. They used to contain typos and be more obvious scams, but they're getting better. Don't click on any links in suspicious e-mails or tell them your personal information, even if it appears to be from your bank.
6) Check your credit report shortly after the holiday season is over, around January or February, to ensure that everything looks normal. Under federal law, you are entitled to one copy of your credit report each year, free, from each of the three major credit bureaus. The joint site they have set up for this purpose is www.annualcreditreport.com.
Make an identity thief's life tougher by always thinking about ways to protect your credit card information and taking the necessary precautions to avoid becoming a victim.
Published: November 2, 2006
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