Be proactive to fight credit card fraud

 John Wyckoff, The Daily Record Newswire

Recent news coverage of high-profile security breaches and stolen credit card data from stores such as Target and Neiman Marcus, among others, has many people worried. This issue, however, isn’t new to Portland or the rest of the country. According to a December 2013 report from the U.S. Department of Justice, 16.6 million Americans — about 7 percent of the population — fell victim to identity theft in 2012.

One form of identity theft involves criminals stealing personal information and opening accounts, borrowing money and generally wreaking havoc on your financial life. However, 85 percent of cases in the report involved stolen credit or debit card information that was used to make unauthorized purchases. Although less severe, credit card theft is nonetheless alarming — and it can be challenging to resolve.

With many shoppers increasingly using plastic instead of cash for daily transactions, reliance on credit cards and the associated risks appears to be on the rise. Fortunately, there are a variety of ways to better monitor and guard personal information in today’s economy.

Be cautious and proactive

People who develop certain habits can help protect their credit card information and thwart would-be thieves.

• Be cautious online. Be sure to clear user names and passwords after visiting a website. Don’t be duped by phishing scams, which can come in the form of pop-up windows or emails that look like they’re from legitimate businesses, but are really set up by criminals. Remember to use a credit card for online purchases, because they generally have better guarantees under federal law than debit cards do.

• Review credit and bank accounts monthly – even weekly, if possible. Monitor closely for purchases not made.

• Shred documents with personal information such as Social Security numbers, birthdates and account numbers. Shred paper mail with personal information and account numbers. Better yet, move as many accounts as possible to online statements to reduce the likelihood of information falling into the wrong hands.

• Set up alerts with banking and credit accounts. Most companies provide a range of text and email alert options for free. These alerts can be customized so that notification is given at the time of specified transactions – such as a purchases over $500, online purchases or account information changes.

• Monitor credit reports regularly. By law, you are entitled to one free credit report a year from each of the three credit report agencies — Equifax, Experian and TransUnion. Check one report every four months, rotating through the agencies, and review for abnormal activity.

After-the-fact discovery

Many people realize their credit card information has been stolen after the fact, such as when a store or credit card company calls to verify a transaction. Some may spot the offending purchase — or purchases — on a statement. If this happens to you, or if you find that your card is missing, call the issuing company as soon as possible. Generally speaking, if your credit card is used without your permission, you won’t be liable for more than $50 under federal law; however, debit card rules and regulations can be trickier, and you could be held responsible for purchases made before you reported the fraudulent activity.

Identity protection services

With all the other daily commitments — work, family, etc. — it may not be possible to set aside time to monitor accounts closely. There are companies that will do it for you, often offering insurance as well. Generally, this insurance covers costs incurred while dealing with fraud, but not necessarily financial losses from the fraud itself.

For around $10 or more per month, there are companies that will monitor your accounts for unusual activity, conduct daily Internet searches for unauthorized use of your personal information and help you resolve theft problems.

By diligently guarding your information and keeping a watchful eye on your accounts, you can lower your risk of credit card theft and quickly put an end to it when it does occur. Your financial adviser may have additional tips or resources for you to better protect yourself – taking small steps early on can help prevent a lot of burden and stress in the long run.

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John Wyckoff is a senior investment counselor with StanCorp Investment Advisers. He is a Certified Financial Planner and a Certified Public Accountant. Contact him at 971-321-8090 or at john.wyckoff@standard.com.

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