As our digital economy grows, consumers are paying a heavy burden in costs associated with identity theft and credit/debit card fraud. According to a report by Javelin Strategy & Research, 15.4 million consumers were victims of these crimes in 2016, up 16% from 2015.
All told, thieves stole more than $16 billion worth of goods and services. Thankfully for most of us, fraud protections on credit and debit cards limit our personal losses, in most cases to $0. However, serious cases of identity theft, while less common than compromised credit cards, can be an enormous headache to unwind, requiring many hours of frustrating work on the part of the victim.
Identity theft can put a serious damper on young adults just kicking off their financial lives. Taking some smart precautions can help limit this risk.
The crime that keeps on happening
When a credit card number gets into the wrong hands, what happens next follows a pretty routine script. The thief, who usually doesn’t steal the card directly but instead purchases the number on a black market website, will use the number in a location usually far from where the cardholder lives or travels. Sometimes there are initial smaller charges used to figure out the card’s credit limit.
At Litchfield Bancorp, we provide complimentary fraud protection services to our customers that help identity suspect charges right away, often before they are even approved.
Credit card theft is no doubt a hassle, but identity theft, which involves a thief having enough compromised data about you that he can imitate you for financial and credit purposes, is really hard to unwind. Keeping your social security card in a safe place is a must in today’s age! Even if you resolve it, that data is still floating around on these dark websites, waiting to resurface and victimize you again.
Avoiding identity theft
Most cases of identity theft don’t occur at random. Indeed, young adults in particular need to be cautious about “phishing” attempts, which try to lure unsuspecting victims into turning over sensitive data.
Legitimate marketers are using data mining techniques to figure out more about you and target ads and other messages more efficiently. (Remember posting about that awesome gluten-free bagel on Facebook? Get ready for gluten-free pizza ads.)
Thieves also data mine, but they aren’t as much interested in your dietary habits. They are instead looking for hidden details about yourself that could be answers to security questions, like your mother’s maiden name, the high school you attended, or your best friend’s first name.
Social media is rife with diversions like quizzes and surveys that seem innocuous, but really are just trying to data mine you. (What were your favorite concerts? Marketers say, Thanks! Now we know what kind of music to pitch at you. Identity thieves say, Thanks! Now we have a good idea what your first concert was, a common security question.)
While the creator’s intent may be solely to market to you, that kind of information in the wrong hands, pieced together with publicly identifiable info, is how identity thieves begin to build a profile they can use.
Beware the phish
Email remains a primary route for phishing scams. One obvious sign of a spam/phishing email are misspellings and using your email address as a first name (“Dear catgirl55,”).
When in doubt, hover your mouse over the link that purports to be legit and look at the bottom left of your browser, which shows you where the link will take you. Does it make sense? Hint, Apple is not going to send you to a random site that ends in .ru. Avoiding clicking questionable links on your phone, as it’s harder to identify the source there than on a computer.
Young people may not be using the phone for voice calls that much, but phishers are calling. Unsolicited calls from financial institutions asking for sensitive account details like passwords are scams. Litchfield Bancorp will never, ever ask for your password! Ignore calls like that and block the number.
Strange emails/snail mail you shouldn’t ignore
Sophisticated identity thieves aren’t interested in the “child’s play” of buying an Xbox using your credit card. They want to impersonate you in major financial transactions, like buying a car or taking out a loan. They are stealthy, looking to get the deal done and make off the proceeds while you remain unaware…until the first bill comes due.
If you receive an email or a letter in the mail talking about your new car loan, don’t just assume it is spam and ignore it. Contact the lender and see what’s going on. The longer you wait, the harder it will be to undo the damage.
Got any more tips for helping young people avoid identity theft? Drop me a line.
Assistant Branch Manager, Watertown