Paying With Plastic
“Plastics will be the biggest thing since radio…” said Sam Wainwirght to George Bailey in the 1946 Christmas classic movie, It’s a Wonderful Life. Sam Wainwright went on to make a fortune in plastics selling airplane canopies, so much so he was able to offer his old friend George an advance of $25,000 at the end of the movie.
For those of you wondering that’s almost $300,000 in today’s dollars.
While Sam Wainwright wasn’t referring to credit cards, his statements sounds especially relevant today. Most American households own at least one credit card and one debit card and credit cards are the most popular method of spending money. If you’re like most people, you pull out your credit card to pay for purchases without thinking to hard about the potential consequences or how to protect yourself.
Credit Card Fraud: How Does It Happen?
Bold Faced Theft
One of the biggest drawbacks with credit cards are they can literally fall into wrong hands, whether by loss or theft. For example in May 2008, USA Today reported that authorities had arrested Jocelyn Kirsch and Edward K. Anderton for financing their exorbitant lifestlye using the credit cards and bank account numbers they had stolen from family members, friends, coworkers, and neighbors.
Card Skimming Technology
Unfortunately not all credit card theft is as simple as a stolen purse or wallet. Portable card reading devices can mean anybody who scans your card can potentially make a copy of your card without you knowing. In January 2008 a Wendy’s fast food employee made the news when she was charged with stealing credit card numbers from customers of the drive through chain where she worked. After swiping the customer’s cards through the store device she would swipe it again on her personal credit card reading device, which she kept in her pocket. When she got home, she would hook up her reader to her computer to go online shopping.
Identity Thieves Are Using Technology
In Los Angeles, authorities arrested a trio of men for allegedly inserting scanning devices into 12 Arco gas stations. The devices were equipped with Bluetooth technology which allowed the criminals to upload customer card information along with PIN codes simply by driving by the gas station. Police confiscated $40,000 in cash. bluetooth-equipped skimming devices, hundreds of counterfeit credit cards, cell phones, computers, and luxury vehicles including a new Porsche and a Ferrari.
How Do You Protect Yourself?
- Monitor your credit card and bank statements.
- Don’t put outgoing bill payments in an accessible mailbox.
- Use a shredder for old receipts, bank cards, and statements
- Carry only as many credit cards as you regularly need.
This is critical-going over your statements is sometimes the only way to find our your identity has been stolen. Keep a calendar and set reminders when you expect your statements to arrive, and immediately follow up if you don’t receive them. Reconcile your receipts and report discrepancies a soon as you find them.
This used to be a common practice not to long ago but that was a different time. Today, identity thieves will see your envelope sticking out of your mailbox and retrieve it themselves. It’s safest to mail bills inside a post office.
Never leave receipts lying around and also remember to shred old cards and bank records – seven years is usually long enough.
There’s no need to carry your entire inventory of credit cards with you at all times. keep cards you don’t regularly need in a safe place. This will simplify statement verification as well as make it easier for you to recover form identity theft if it does happen.
Do I Need Identity Theft Protection?
Unfortunately, you can implement every precaution and preventive measure here and still be a victim of identity theft. The truth of the matter is much of your information is already out there beyond your control.
How many credit applications have you filled out? How many copies have been made? Who’s seen your mortgage, student, or auto loan application? Having an identity protection service watch your back can significantly reduce your likelihood of becoming a victim as well as assist you in the recovery if it does happen.
Identity protection services vary widely in features and price. Take the time to educate yourself on how they work and what service is right for you. You can view an identity theft comparison here or read reviews of leading services like Lifelock, TrustedID, and IdentityGuard here as well.
Most importantly, stay on top of your credit report. You can get a free credit annually at AnnualCreditReport.com but in my opinion, reviewing your credit report once a year simply isn’t enough. Some of the paid services will monitor your credit report in real time and send you notices via phone, email or text if they notice anything suspicious. Lifelock Command Center will also review public databases monthly like sex offender registry reports and court records.