How to Protect Yourself from Credit Card Fraud and Identity Theft

It seems every year after the rush of holiday shopping has died down and we begin to relax into the New Year, there’s always a big headline about a “massive data breach” at some big retailer over the course of the holiday season. It’s always the same: if you shopped at any of these stores then it’s likely your whole credit card number, pin number, and even Social Security number were stolen by some sneaky hacker. The Federal Trade Commission estimates that nearly 9 million shoppers are hit by some sort of credit card fraud or identity theft scheme each year. The FTC further estimates that a quarter of these people are hit with credit card fraud, which occurs when a hacker gets your credit card details and starts making purchases with that information. The rest of those 9 million Americans are victims of full-blown identity theft, which occurs when someone gets a hold of your Social Security number and begins opening new lines of credit with your information. It certainly wasn’t you that opened up that $10,000 line of credit at Home Depot a few months back, yet here you are looking at a bill statement for purchases you never made. So, what do you do now to reverse the effects? What can you do in the future to protect yourself from it ever happening again? We’ve compiled some helpful tips that you can try using in the coming New Year and beyond to ensure that you’re doing everything you can to shop (whether it be in big box stores, or online) smartly and safely.

Guard your Online Information

Nowadays, just about everyone shops online or banks online, or does a combination of the two. With dozens of account numbers, usernames and passwords floating around, it’s easy for anyone (novice and professional hacker alike) to swipe that info and have a little shopping spree, all on your tab. To fight against that, try these helpful tips:

• Clear your cache: This is especially important if you’ve been working on a public computer, but you should also do it on your personal computer periodically. Clearing your cache will empty out stored information such as usernames and passwords from every website you’ve ever visited.
• Change your login: Change your login passwords monthly. And don’t make the password for every account the same. Consider using a mixture of capital and lower-case letters, numbers and symbols if the site allows.
• Pay with your Credit Card: Paying with your credit card versus your debit card or online payment services (i.e. PayPal) has better guarantees under federal law to protect you against credit card fraud.
• Be alert for phishing: Scammers have gotten cleverer over the years, often mimicking precisely the site that you’re on in an effort to nab your information. Double check that you’re on the correct site by checking the address and answering any standard security questions before putting in your login info.

Monitor your Credit Report

By law, you’re entitled to a free annual credit report from all three credit bureaus- Equifax, Experian and TransUnion. Use them wisely: request a free report every four months, using a different bureau each time. You can order them free through each agency, or visit annualcreditreport.com. A word of caution though: there are tons of knock-off sites that will try to charge you for a credit report or even scam you by advertising a free report from a different site. Use the URL above or visit one of the three agencies we mentioned earlier directly to get your report. Once you have your credit report, give it a once-over and look out for any abnormalities or new accounts that have been opened without your knowledge. If you see anything strange, notify the appropriate bank or credit agency and work with them to resolve the issue.

Monitor your Bank and Credit Card Statements

Check your accounts regularly- monthly is fine, bi-monthly is good, too. Look out for purchases you obviously didn’t make- like a grocery trip at a store on the other side of the country from where you live.

Invest in a Shredder

Don’t just toss sensitive documents like bill or account statements in the trash- shred them! This applies to junk mail, too- like credit card offers- because they can contain personal information as well.

Identity Theft Protection

There are a number of services on the market now that you can pay monthly subscriptions for to guard you against identity theft. Identity Theft Protection will likely set you back about $150 annually, depending on the company and amount of protection you purchase and it’s not bulletproof. Two of the more common measures these companies will take in an effort to protect you against identity theft are measures you can do yourself: fraud alerts and credit freezes. Some financial institutions and creditors have fraud alerts that will notify you when a suspicious purchase has been made or a new line of credit has been opened. If you didn’t make the purchase or open the account, the next step is to freeze your account or line of credit. Since you can take advantage of both of those measures yourself, consider whether or not you want to pay a company to do it for you.

If you’ve detected fraudulent activity on any of your accounts, notify the appropriate financial institution as soon as possible and begin working with them to reverse the effects. In some cases it can be painful and time-consuming, so ensuring that you’ve taken the appropriate measures to avoid it may lessen that headache in the long run. If you suspect you’re a victim of identity theft, you may need to file a complaint with your local police station and the FTC.