With the popularity of social media and increased time spent online, many of us have willingly sacrificed our privacy in order to keep in frequent contact with friends — sharing photos and details about where we ate dinner last night. However, it is the growth in our online shopping habits and preference to use plastic over cash that have increased our vulnerability to identity theft.
Large-Scale Data Breaches
Merchants including Target, Neiman Marcus, Supervalu and P.F. Chang's China Bistro have suffered data breaches. Last month, Home Depot disclosed that 56 million cards may have been exposed in a five-month attack on its payment terminals.
What you need to know right now is that these breaches are no longer a potential threat sitting dormant. Fradulent transactions are showing up across the United States as criminals use the stolen credit card information to buy prepaid cards, goods, and services. In some cases, customer bank accounts have been drained of cash.
According to Visa and MasterCard, the stolen information includes account numbers, cardholder names, and card-expiration dates that can enable thieves to produce counterfeit cards. While you may not be on the hook for fraudulent charges, you do need to pay attention and notify your financial institution in order to deny unauthorized purchases.
According to Pew Research Center, 18% of online adults have had important personal information stolen such as their Social Security Number, credit card, or bank account information. Security breaches are a widespread problem that are not likely to go away.
Seven Things To Do Right Now
- Request replacement credit and debit cards.
Some large financial institutions like JP Morgan Chase have issued new cards after the Target breach and already notified victims of the Home Depot breach that new cards have been mailed out. If you think that your information is at risk after shopping at any of the above named merchants, don't wait for your bank to contact you. Request new cards yourself.
- Monitor your bank account and credit card activity.
Review your credit card statements every month for any unauthorized charges. Keep an eye on small charges. If small charges go through undetected, thieves often charge larger amounts later. Or thieves may be content taking small amounts out of many accounts scoring a big payday. Quickly report any unusual activity to your card issuer.
- Use credit cards over debit cards.
Credit cards generally provide you with more protection than debits cards. For credit cards, if your account number is stolen, not your physical card, you are not responsible for unauthorized charges under Federal Law. For debit cards, if your card and PIN have not been lost or stolen, you are not responsible for unauthorized charges under Federal Law if you report it within 60 days after your statement is sent to you. If an unauthorized charge goes unreported for more than 60 days, your money and future charges by the same person could be lost. If you lose your debit card or PIN, the time to report is usually much shorter (often 2 business days in order to limit your liability to no more than $50.)
- Use unique and strong passwords.
Basically, do not use the same password for all your websites. According to some studies, more than half (55%) of adult internet users use the same password for most, if not all, websites. That’s a big mistake. Also, do not create passwords using your date of birth, family name, or a pet’s name, and never use “123456” or “password.” Ideally, you should also change your passwords periodically but don't do this in lieu of using unique and strong passwords.
- Be wary of anyone contacting you to “verify” your account information.
Banks and credit unions never ask for account information by phone or email. Be on the look out for for phishing emails or scams to steal your account information. If you receive such contact, you should immediately call your credit card provider or financial institution.
- Check your credit report.
Every year, you are eligible for three free credit reports, one from each credit bureau, at www.annualcreditreport.com. You may be eligible for additional free reports depending on your state and whether you file a 90-day fraud alert. For details, read specific information at each credit bureau.
- Take advantage of any free subscriptions to credit monitoring or other related services.
Following a security breach many merchants arrange for a free subscription to a credit monitoring service for a limited period of time. Refer to Home Depot as an example. Of course, take notice of the fine print and whether you will need to cancel the subscription once your free offer expires.
According to a survey by Javelin Strategy and Research, 22.5% of consumers who received notice of a security breach subsequently became victims of identity theft. Be alert and be careful.
Related blog reads:
- 5 Tips to Keep Thieves Out of Your Bank and Brokerage Accounts
- 5 Simple Steps to Protect Yourself from the Target Data Breach
- Protect Yourself From IRS Tax Scams
What steps have you taken to protect your personal information? If you have more tips, please share them with us.