Personal finance journalist with an eye for industry news
Millions of consumers would rather have a thief purloin their personal data than snatch their smartphones, according to a new CreditCards.com survey.
In our survey of 1,164 U.S. adults, 7 percent said having your cellphone stolen would be worse than having your personal data stolen. An extrapolation based on the U.S. adult population reveals 16 million Americans fear smartphone theft more than identity theft.
Identity theft expert Rob Douglas said that while he believes personal data theft is a broader and longer-term risk, people who fear losing their cellphones more are “on to something.”
“They may be recognizing that we keep everything on our phones – the apps we use, our contact lists, calendars and passcodes,” Douglas said. “Our lives are in our phones.”
Our survey also asked consumers how they’ve monitored their credit in the wake of the 2017 Equifax data breach, which exposed the personal details of nearly 146 million Americans. Thirty-two percent said they had checked their credit scores and reports within the past six months, but 50 percent had not. The breach was announced Sept. 7, 2017.
Here’s what else our survey found about consumers’ attitudes toward their personal data, their smartphones and the Equifax breach.
- Many young adults are clueless about their credit.
Twenty-seven percent of respondents aged 18-37 have never checked their credit reports or scores, including 36 percent of those 30 and younger. By contrast, 12 percent of Gen-Xers and 12 percent of baby boomers said the same.
- “What data breach?”
Twenty percent of all respondents have heard little or nothing about the Equifax breach, including 46 percent of those aged 18-37.
- Not everyone who heard about it did anything to protect themselves.
Fifty-one percent of respondents who said they heard “a lot” about the Equifax breach checked both their credit reports and scores within the past six months. But 29 percent who claimed the same level of breach awareness said they haven’t done so in that time.
- Millennials are most protective of their cellphones.
Millennials were significantly more likely than all older age groups to say having your cellphone stolen would be worse than having your personal data stolen.
- Social media users may fear disconnecting.
People who use popular social media platforms, including Facebook (7 percent), Twitter (10 percent), Instagram (10 percent) and Snapchat (10 percent), were significantly more likely than non-social-media users (1 percent) to say having your cellphone stolen would be worse than having your personal data stolen.
The scientific survey of 1,164 U.S. adults was conducted online Feb. 9-12. See survey methodology
Americans desensitized to personal data security
Nearly 1 in 5 respondents said having your cellphone stolen would be worse than losing your personal data (7 percent), or that neither outcome is worse than the other (11 percent). It suggests many of us either have strong emotional attachments to our phones or have become nonchalant about protecting our personal information. Our often-casual attitudes toward sharing intimate personal details and moments of our lives on Facebook, Instagram and other social media platforms may be evidence of the latter.
“People are becoming a little desensitized about issues such as privacy and the importance of having your data secure and safe,” said Isaac Vaghefi, a professor at Binghamton University who has conducted research on smartphone addiction. “The more people share on [social media] platforms, they start to lose that sense of importance of keeping your information private.”
Is there real danger in losing your phone?
Losing your cellphone can induce mild panic, even in those of us who aren’t constantly glued to our handsets. If you own a smartphone, your entire digital life – your family and friends’ phone numbers, any social media accounts or mobile wallets, and your favorite news feeds – can be accessible through a flick of the wrist and the swipe of a finger if it’s not locked. Without that virtual lifeline, the feeling of disconnection can be profound.
But is this fear of being without your mobile device – known as nomophobia in scientific circles – worth even a bead of sweat compared to the terror of losing your personal data?
An identity thief can use your personal details – name, address, date of birth, Social Security number and other information – to open credit lines in your name and temporarily ruin your financial life. He can steal your tax refund, file a bogus medical claim in your name or even give your details to the police if arrested.
Someone who steals your smartphone may be less of a threat, particularly if you use multifactor authentication, such as numerical passwords, swipe, fingerprint or facial scan, to lock it.
Douglas recommends taking advantage of the security features your device offers. The most recent models from tech giants such as Apple and Samsung enable the use of biometric technologies, such as facial recognition and iris and fingerprint scanning, to prevent other people from being able to access your phone if lost or stolen.
Financial literacy sent to the back of the classroom
The massive Equifax data leak spurred class-action lawsuits, federal, state and international investigations and calls by U.S lawmakers for credit bureau reform. However, the breach failed to jolt a majority of consumers to review their credit files. Our survey showed that half of all U.S. adults had not checked their credit scores or their credit reports within the past six months. Less than a third (32 percent) said they checked both in that time period.
John Pelletier, director of the Center for Financial Literacy at Champlain College, said many American adults fail to understand what a credit score is and how it affects their borrowing costs via interest rates on loans. He added that many people don’t even know how to access their credit reports.
“People don’t know where to go or where to get this information,” Pelletier said. “If you don’t understand what it is and why it’s important, why would you go and look at it?”
Our poll also found that millennials (27 percent) were significantly more likely than Gen-Xers (12 percent) and baby boomers (12 percent) to say they have never checked their credit scores or credit reports.
Experts say the current generation of young adults lacks proper financial schooling due to recent developments in public education policy.
“This is the group that came of age during the advent of No Child Left Behind and Common Core,” said Pamela Whalley, director of the Center for Economic & Financial Education at Western Washington University. “Schools have increasingly focused on math, language and arts, which are vital skills, but it’s come at the expense of things like civics, economics and personal finance.”
However, the news isn’t all bad for millennials. Our survey showed 34 percent of people aged 18-37 checked both their credit scores and credit reports within the past six months. It’s possible the Equifax breach served as a teaching moment for many young adults who never learned about personal finance inside classrooms.
Take action now
If you’re among the many Americans who haven’t checked your credit score or their credit report since the Equifax breach, you can do both for free at CreditCards.com. You can also get a free copy of your credit report from each of the three major credit bureaus – Equifax, Experian and TransUnion – per year at annualcreditreport.com. You might even consider purchasing one of many credit monitoring packages available now, though each has different costs and benefits.
Another option is to freeze your credit file, which blocks lenders and other companies from accessing your credit report. Credit freezes often carry a fee of $5 to $10 to place or remove them, depending on what state you live in. However, Equifax is offering to place, temporarily lift or permanently remove credit freezes for free through June 30.
Consumers can physically guard their cellphones from the sticky mitts of thieves, but mass data theft incidents such as the Equifax breach are largely out of our control. But routinely reviewing your credit can protect you from the long-term damage an identity thief can inflict upon your finances.
CreditCards.com commissioned YouGov Plc to conduct interviews with 1,164 adults living in the United States. The survey was conducted online Feb. 9-12, 2018. Statistical results are weighted to correct known demographic differences between the sample and the U.S. population.