The internet is a haven for credit-card hackers and identity thieves, so how do we protect ourselves? Rick Emerson, author of "Zombie Economics," stopped by with important information.
Q: What are some red flags that might indicate identity theft or credit-card fraud?
A: The biggest giveaway, of course, is spotting a purchase that you didn't make. Banks and credit-card companies do their best to monitor for suspicious behavior, but that only goes so far. It's a good idea to check your statement each month and highlight any transaction you don't recognize. Usually these items are innocuous, but when you suddenly notice a one-time purchase of fifteen X-Boxes, then you know something's up. There are several free, online services (such as BillGuard.com) that will auto-monitor your credit-card transactions and alert you via email if something looks amiss.
For those who get their credit-card statements via snail mail, it's a big red flag if those statements suddenly stop coming. This sometimes means that a scammer has changed the card's mailing addressusually to prolong their financial joyride.
Q: How can I minimize the chances of my credit-card being stolen or misused?
A: When it comes to physical cards, there are a couple of easy tips that can actually make a difference:
You know that "please call to activate" sticker that's on brand-new credit cards? Leave it on, even after the card's been activated. Most thieves want the path of least resistance, and they know that activating a credit card can be trickymuch trickier than simply using one. If they think the card has to be activated, there's a good chance they'll never use it, and maybe never take it.
When you sign the card, do it with a permanent markersomething which can't easily be erased or smeared. Remember: thieves want easy money - and a card with a blank (or smudged-beyond-recognition) signature strip makes it much easier for them.
Q: Identity theft seems rampant online - how can I protect my info from being hijacked?
A: The internet is a haven for virtual pickpockets - fortunately, a few basic tips will greatly decrease your risk:
Keep certain information out of your online profiles. This includes your full birthday, your home telephone number, or anything else which might make it easier to impersonate you. Think about some of the info you've used to prove your identity over the phonenow think about how easily some of that info might be visible to the whole world.
Certain websites (banks are the worst at this) require you to use preset security questions, such as "What is your mother's maiden name?", or "What street did you grow up on?" The problem, of course, is that this info is easy to find. A simple way to make this method more secure: pick a three-digit number, and always add that number to any answer you give. (For example, instead of "Smith", you'd give your mother's maiden name as "Smith423".) This little trick can make all the difference.
Q: If my credit cards are stolen or misused, is it true I'm only liable for $50 in charges? What about debit cards?
A: Your liability for a stolen credit card does top out at $50 - and if you report the card stolen before it gets used, your liability drops to zero. And if the card's number is stolen (but not the card itself) your liability is also zero.
With debit cards, time is money. If you report the card missing before it gets used, you're off the hook entirely; if you report it within 48 hours, the liability is only $50. If you wait longer than two days, the liability jumps to $500and after 60 days, you're holding the bag for all the money taken from that account, as well as any linked accounts.
Q: If I think someone is using my identity or my credit/debit cards, what should I do?
A: First, ask one of the three credit-reporting companies to put a fraud alert on your credit report. By law, they must then tell the other two companies. This will make it harder for an identity thief to open more accounts in your name.
Next, order a credit report. Identity theft victims are entitled to a free credit report from each of the three credit reporting companies.
Finally, create an Identity Theft Report - this gives you some important rights that can help you recover from the theft. You can do this at FTC.gov.