I know this probably sounds like the beginning of an infomercial in which I jump out from behind a corner in a fake lab coat to scare you into signing up for my no-risk 30 day free trial, but it’s a serious issue.
According to the Federal Trade Commission, identity theft cases doubled from over 650,000 in 2019 to nearly 1.4 million in 2020. The average identity theft victim in 2020 lost $1,100.
Last weekend a close relative of mine saw her entire checking account vanish after being swindled by a phone scam. She lost more than $10,000. The scammer called her, claiming to represent Amazon and said he needed to verify her debit card because someone else was attempting to spend $1,300 with it.
She was skeptical and Googled the phone number, but they were one step ahead of her with a web domain high in the search results saying this was Amazon’s number. She’s had a successful career and earns great money so she’ll be alright, but it was still a devastating loss.
I was sad and angry she lost so much money but I wasn’t terribly shocked. Theft is the world’s second oldest profession. Thieves are greasy lizard people with no morals who seize what isn’t theirs when given a ripe opportunity. It’s important to be vigilant against their schemes.
Only maintain slightly more than you need in your checking account to avoid an overdraft. Keep the rest tucked away safely in a savings account, where criminals need more than a debit card number to access it. An additional perk is being forced to contemplate the transfer. It has stopped me from countless unnecessary purchases over the years. Dave Ramsey would approve.
Sometimes legitimate bill collectors will call debtors soliciting payment, so ask questions to verify who’s on the other end of the line. It’s a good idea to ask if you can pay the bill online. Red flags should go up if they say no, try to discourage that alternative or unreasonably pressure you to provide payment information. Amazon, the IRS and most other major entities will never call you demanding payment or threatening legal action.
Freezing your children’s credit can protect them from the Frank Gallaghers of the world who might max out credit cards in their names.
It’s important to protect social media and online shopping accounts. Use hard to guess passwords unique to each account. Apple devices have a password generator which I use frequently. Avoid posting answers to question-filled Facebook memes asking for your favorite color, third grade teacher’s name, first pet, etc. These are often ploys by hackers to figure out the answers to your security questions.
Cash transfer apps like Venmo and Zelle can actually be safer than writing a physical check. My past three landlords have taken my rent payments over Zelle. Everything is protected by encryption. But scammers are lurking in those corners of the internet too, so be careful.
Check credit scores routinely. Two years ago I discovered $3,400 in debt wrongly attributed to my name. The issue was easily resolved by sending an email to Experian.
At my last job as an IHOP server I had a 24-year-old coworker who told me she had $10,000 in credit card debt because her crazy, drug addict ex-roommate Tonya stole her credit number. She didn’t pursue legal action because that seemed more costly than the likelihood of being reimbursed. Tonya’s wages were already being garnished for larceny she committed against her own father.
I’ve heard it said that an ounce of prevention is worth a pound of cure. Too often the only cure for identity theft is the blood, sweat and tears sacrificed to replenish what was stolen. Fortunately there are prophylactics or, if you prefer, identity theft vaccines. Like vaccines, identity theft protection doesn’t make sense for everyone but most people should have it. Options include Lifelock, Experian and ReliaShield among others.
I have LifeLock. It monitors my bank accounts, cards, insurance policies and even my email addresses. If I fell victim to one of the aforementioned scenarios my plan would reimburse me up to $25,000 and pay as much as $1 million in legal fees. I’m no special pleader for LifeLock. Many other plans are probably just as good, maybe even better.
Perhaps more Americans would procure identity theft protection if we started calling this what it really is: fraud insurance. For several years I’ve had insurance on my car, apartment (rental) and healthcare. Health insurance has always been the worst. Ridiculous premiums or sky high deductibles, take your pick. Yet I only pay $10 per month for my fraud insurance, a much better value of which too few people take advantage.