Personal Finance: Oyez! Oyez! Beware of credit fraud

Personal Finance: Oyez! Oyez! Beware of credit fraud

April 3rd, 2013 Chris Hopkins in Business Diary

Chris Hopkins

Photo by Contributed Photo/Times Free Press.

The first case on the docket last week for Supreme Court Chief Justice John Roberts was a crime close to home: his own credit card number was stolen. The incident serves as a reminder that it can happen to anyone, and is a perfect opportunity to review some steps to minimize the chances that you will be the next victim.

Credit fraud is one of many surreptitious attacks on unsuspecting consumers that can broadly be described as identity theft. Other gambits include purloining your personal information and using it to establish new accounts in your name, raid your bank account, and file phony tax returns to swipe your refund. In the electronic age, potential threats are limited only by the ingenuity of the crooks.

Fortunately, the proliferation of electronic transactions can actually work to your benefit in combating identity theft. Intercepting paper records is a favorite trick of a credit thief, so minimizing the flow of hard copy documents bearing personal informa-

tion is one key to reducing your vulnerability. Receiving your bills electronically and paying them online can diminish the likelihood of an attack.

Most people who are resistant to Internet banking fear the interception or hacking of their transmissions. Given a few simple precautions, you need not fear online banking and bill paying. Maintain your passwords in a separate location, and change them from time to time. Do not use the same password for all of your accounts. And don't log onto any sensitive sites such as your bank or credit accounts in public spaces like coffee shops, airports or restaurants. Thieves can intercept your data if you transmit over public routers.

Be sure to check your statements frequently for unusual or suspicious charges. Some credit card companies will even contact you if they detect activity that deviates from your usual spending pattern. If you still receive paper statements, open them at once and review. By all means, consider turning off the paper copy and monitoring your accounts on line.

If you do fall victim to an identity thief, bear in mind that you are not alone and that mechanisms exist to repair the damage. It happens to the best of us and is no cause for panic.

Federal law limits your liability for a stolen credit, debit or ATM card to $50 if reported promptly (and generally zero if reported before any fraudulent transactions occur). The key is to track your accounts often enough to detect and quickly report any bogus activity. Contact the creditors or financial institutions directly if you suspect fraud.

You should also place an alert on your credit file if you suspect that you have been targeted. Contact any one of the three credit agencies and request a free 90-day fraud alert to protect your credit rating. The agency you contact is required by law to notify the other two.

A few precautions can significantly reduce your vulnerability. A great resource for more information is the Federal Trade Commission at FTC.gov. I rest my case.

Christopher A. Hopkins CFA, is a vice president at Barnett & Co.