Online Shopping and Identity Theft

Welcome to December!  We are almost at the end of 2020 and I know that many of us will be happy to put this year behind us.  However, before we can close this chapter, we still have the holidays to look forward to.  That means it’s time to shop, as we all know, and these days that means lots and lots of online shopping.  There have been record online shopping numbers already.

All this online shopping immediately made me think of identity theft.  In this age of electronic transactions, it’s even more important to keep an eye on the safety of our data and accounts.  To that end, I’ve decided to repost a blog I wrote back in July of 2019 with a few pointers about identity theft that we all need to keep in the back of our minds as we get on with our holiday shopping.  Here you go, enjoy!

As a bankruptcy attorney, and a former prosecutor, I’ve seen plenty of circumstances regarding identity theft.  These days, identity theft is growing steadily because so much of what we do in our daily lives is electronic.  In my opinion, you can’t completely insulate yourself from the threat of having your identity stolen.  However, there are things you can do to minimize that threat and to minimize the damage if you are a victim of identity theft.  So, this month’s blog post is dedicated to how to avoid identity theft and what to do if you are a victim of identity theft.

Let’s start with the things you should do to avoid identity theft:

1. If you can help it, don’t use a debit card that is attached to your primary bank account to pay for things. My suggestion is to use a credit card and train yourself to pay it off every month.  If you have to use a debit card, set up a separate account from the one you have your paycheck deposited into or your life savings in, for example, and use the separate account for debit card purchases.
2. Monitor your credit card and bank accounts, as well as your credit reports. This is very important for making sure there are no unauthorized charges on your accounts and no accounts have been opened in your name.
3. Keep your important information safe. Don’t give your Social Security number out to just anyone.  Don’t leave your important documents unsecured in your home and shred mail that has your name and address on it (like credit card solicitations).  The fewer things you keep in your wallet, the better.  Repeat after me, don’t keep your passwords or Social Security card in your wallet.

Also, be smart about your passwords.  Don’t save them in your browser and don’t use “password” for your standard account password.  ID thieves can crack passwords like that in seconds so, put some thought into using the strongest passwords possible.

4. Check that websites are secure before entering your payment information. Look for the security socket layer (SSL) in the URL of the website.  If a website has an SSL it will start with “https://” or have a little padlock icon in the URL of your browser or on your device.  If the website starts with “http://” without the “s” it is not using encryption technology and you should navigate away from it immediately.

Now, if you’ve actually been a victim of identity theft, there are steps you can take to resolve the problem:

1. Don’t panic. It’s not the end of the world and you can fix it as long as you get to work on it right away.
2. Contact all three credit reporting agencies and put credit freezes in place immediately. Do this if you’ve lost your wallet, too.
3. Contact your bank and credit card companies immediately and report the theft. Check your accounts for unauthorized charges and dispute them immediately.  There are rules for how long you have to dispute a charge resulting from your stolen identity.  The standard is 60 days but you could be responsible for up to $500 of the charge if you wait longer than 48 hours to dispute it.  As soon as you realize your identity has been stolen, report it immediately.  The longer you wait, the more money it will cost you.

You should also notify your bank and credit card companies if you lost your wallet, too.  That doesn’t mean your identity has been stolen but, better to be safe than sorry.

4. Contact your local law enforcement office and file a report. You will probably need it if you find yourself having to dispute big charges in your bank account or on a credit card, for example.
5. Contact your state’s attorney general consumer complaint division and let them know you’ve been a victim of identity theft. Ask if there are any resources they provide to help you resolve your identity theft issues.

While identity theft does happen, the rise in data breaches has also created more tools you can use to fix issues that come up because your identity may have been stolen.  Keeping a close eye on your accounts and reporting to your local law enforcement agency, bank and credit card companies as soon as possible is the best way to minimize the damage from identity theft.  Also, credit freezes are a great way to stop identity D thieves from continuing to steal from you.  Make sure you put them in place as soon as possible.

Finally, I’ve had lots of people ask me about purchasing an identity theft protection plan.  These identity theft protection plans cannot possibly foresee every way your information could be compromised.  They tout services helping you clean up issues once you’ve been a victim of identity theft, not protecting you from becoming a victim in the first place.  In my opinion, I don’t see the value in paying a monthly charge for an identity theft protection plan when you can monitor your accounts and credit yourself.  You should be doing that anyway!  It should be part of your regular activities like paying your bills and brushing your teeth.  Save yourself some money and learn how to run your own free credit reports.  Check your accounts at least once a week and if you see something that doesn’t look right, pay attention to it right away.  Just keeping a close eye on things can go a long way toward protecting you from identity theft!

The smart thing to do is save the money you would be paying for an identity theft plan monthly in an interest-bearing account.  That way, if you do need to hire someone to help you resolve an issue resulting from your identity being stolen, you’ll have the money you need to do it and then some!

So, this is the most comprehensive blog post I’ve done on identity theft.  I’ve created a fair amount of content about identity theft, including this YouTube video about Credit Monitoring Scams which you can listen to as a podcast on on podbean.com, iTunes, Google podcasts or Spotify by searching “The Dollar Lama.”  I hope you enjoy your holiday season and that you and your family are safe, healthy and happy!

Sincerely,

The Dollar Lama

P.S.  Make sure you check out my online courses, books and resources, too!  Investing in your money management education is an investment in yourself.  That’s the best investment you’ll ever make, I guarantee it!.  Don’t forget my weekly Facebook live videos on Facebook.com/newcashview, Instagram @joyalfordbrand and on my YouTube channel NCVTV. You can catch me Thursday evenings between at 9:00 (Eastern Standard time), for my weekly NCVTV episode. They are packed full of useful and entertaining money management information! If you’ve missed any NCVTV episodes, you can see the latest on newcashview.com