Focus on Financial Issue Bulletin
Focus on Financial Issues: Identity Theft
Kathy Canzano, GFWC Focus on Financial Issues Program Chairman
Did you ever think that you would find yourself a victim of identity theft? No, not me you are saying to yourself. As naive as it sounds, I did not think I could be a victim. I have been very careful to follow the guidelines provided by the many resources through GFWC. I felt very educated on the topic. I know my credit score; I review my monthly checking account statements; I am careful with my bank accounts and giving out my banking information. But, I received a call from the fraud department of my bank telling me they suspected a fraudulent transaction from one of my accounts. Fortunately, the bank caught it in time. I was angry and frustrated; you feel violated. You spend time at the bank; you talk to the police; you change accounts you are inconvenienced; it is a wakeup call. We all must be diligent to protect what is ours.
Any time you suspect fraud you should place a fraud alert with all three credit reporting agencies. They will place a 90-day alert on your account, which can be extended. They will also send you a copy of your report to be sure there arenít other problems. These are the contact numbers to report fraud:
You can never err by being too cautious. Itís better to report a possible fraud and be wrong, than not to report one and allow a problem to continue to grow and fester. You donít have to wait for the bank to call you, here are some tips we all should be using.
5 Tips for Protecting Your Checking Account
- Donít give your account number and bank routing information to anyone you donít know.
- Give out your account information for transactions only if you are familiar with the company you are dealing with. And if you have not done business with a company before, give out account information only if you have initiated the transaction. Criminals may ask you for your bank account number and then withdraw money from your account by creating a demand draft (sometimes called a "remotely created check") or making an electronic transfer. They may also ask for your debit or credit card number and other personal information. Don't fall for these scams and don't let yourself be pressured into "free trial offers." To be removed from telemarketing lists, sign up for the National Do Not Call Registry online or by calling, toll-free, 1-888-382-1222.
2. Review your monthly statement.
- Make sure all the checks, debits, automatic payments, and other withdrawals are ones you authorized. If you see a transaction you did not authorize, notify your bank immediately. If your bank has online banking, you don't have to wait until your bank statement comes--you can check your transactions at any time.
3. Notify your bank about any problems as soon as possible.
- The sooner you alert your bank to a problem, the sooner they can get it resolved. In some cases, your bank may require you to notify them in writing. Keep copies of any documents you give the bank until the problem is resolved. If you think the problem is a result of fraud, you should also contact your state attorney general.
4. If you don't have enough money in your account, don't write the check or authorize the debit.
- Checks are being processed more quickly these days, which means the money may be debited from your account sooner. Also, many stores and utility, insurance, and credit card companies will convert your check to an electronic payment, which also means the money will be debited from your account sooner. If you don't have enough money in your account when you write a check or authorize a debit, you could find yourself paying a fee. For more information, see the Federal Reserve Board's publications "What You Should Know about Your Checks" and "Protecting Yourself from Overdraft and Bounced-Check Fees".
5. Know your rights under consumer protection laws.
- If you have a problem with an electronic debit or electronic fund transfer, you have certain rights under the federal Electronic Fund Transfer Act (EFTA), as explained in the Board's "Consumer Handbook to Credit Protection Laws". You also have rights under the EFTA if you have a problem with a check that has been converted, as described in the Board brochure "When Is Your Check Not a Check?". The Federal Trade Commission's publication "Automatic Debit Scams" explains your rights and what to do if you have a problem with a demand draft or remotely created check.
5 Tips for Getting the Most From Your Credit Card
1. Pay on time.
- Paying your credit card account on time helps you avoid late fees as well as penalty interest rates applied to your account, and helps you maintain a good credit record. A good credit record leads to a higher credit score, which helps you, qualify for lower interest rates. Know the date your payment is due. If your bill is due at an inconvenient time of the month-for example, if it's due on the 10th and you get paid on the 15thcontact your credit card company to see if they will change your billing cycle to fit your cash flow.
2. Stay below your credit limit.
- If you go over your credit limit on your card, your card issuer could charge a fee and increase your interest rate to a higher penalty rate. To avoid this, keep a record of your spending or check your balance online. Also, be aware that some merchants (for example, hotel and car rental companies) put a "hold" on your credit card based on their estimate of the amount you will charge. This can reduce your available credit until the final charge is processed. See ďCredit and Debit Card Blocking".
3. Avoid unnecessary fees.
- Credit card companies not only charge late payment and over-the-limit fees, but also fees for cash advances, transferring balances, and having a payment returned. Some companies charge a fee when you pay your bill by phone. Pay attention to the transactions that trigger these fees. If you need a cash advance, withdraw enough so that you don't have to take a second cash advance-and incur a second fee-later in the month. Read your credit card agreement to learn more about the fees that your credit card company charges. For more information see "What are the fees?".
4. Pay more than the minimum payment.
- If you can't pay your balance in full each month, try to pay as much of the total as you can. Over time, you'll pay less in interest charges-money that you will be able to spend on other things, and you'll pay off your balance sooner. See the Federal Reserve's Credit Card Repayment Calculator.
5. Watch for changes in the terms of your account.
- Credit card companies can change the terms and conditions of your account. They will send you advance notices about changes in fees, interest rates, billing, and other features. By reading these "change in terms" notices, you can decide whether you want to change the way you use the card. For example, if cash advance fees increase, you may decide to use a different card for cash advances. If you have a card with a variable rate or if you have an introductory rate that is ending, be aware that credit card companies are not required to send you a notice about raising your interest rate. Interest rates are listed on your monthly bill. Read your bill carefully and take note of any changes.
5 Tips for Improving Your Credit Score
1. Get copies of your credit report-then make sure the information is correct.
- Go to www.annualcreditreport.com is the only authorized online source for a free credit report. Under federal law, you can get a free report from each of the three national credit reporting companies every 12 months. You can also call 877-322-8228 or complete the Annual Credit Report Request Form and mail it to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.
2. Pay your bills on time.
- One of the most important things you can do to improve your credit score is pay your bills by the due date. You can set up automatic payments from your bank account to help you pay on time, but be sure you have enough money in your account to avoid overdraft fees.
3. Understand how your credit score is determined. Your credit score is usually based on the answers to these questions:
- Do you pay your bills on time? The answer to this question is very important. If you have paid bills late, have had an account referred to a collection agency, or have ever declared bankruptcy, this history will show up in your credit report.
- What is your outstanding debt? Many scoring models compare the amount of debt you have and your credit limits. If the amount you owe is close to your credit limit, it is likely to have a negative effect on your score.
- How long is your credit history? A short credit history may have a negative effect on your score, but a short history can be offset by other factors, such as timely payments and low balances.
- Have you applied for new credit recently? If you have applied for too many new accounts recently that may negatively affect your score. However, if you request a copy of your own credit report, or creditors are monitoring your account or looking at credit reports to make prescreened credit offers, these inquiries about your credit history are not counted as applications for credit.
- How many and what types of credit accounts do you have? Many credit-scoring models consider the number and type of credit accounts you have. A mix of installment loans and credit cards may improve your score. However, too many finance company accounts or credit cards might hurt your score.
To learn more about credit scoring, see the Federal Trade Commission's website, Facts for Consumers.
4. Learn the legal steps you must take to improve your credit report.
- The Federal Trade Commission's "Building a Better Credit Reportď has information on correcting errors in your report, tips on dealing with debt and avoiding scams-and more.
5. Beware of credit-repair scams.
- Sometimes doing it yourself is the best way to repair your credit. The Federal Trade Commission's "Credit Repair: How to Help Yourselfď explains how you can improve your creditworthiness and lists legitimate resources for low-cost or no cost help.
For more consumer information, please visit the Board of Governors of the Federal Reserve System online at www.federalreserve.gov/consumerinfo.
Remember to report your activities.