The 5 Things You Should Do Right Now To Protect Your Credit (Even If You Weren’t Affected By The Equifax Hack)

September 13, 2017

In case you haven’t heard, credit reporting bureau Equifax announced that 143 million Americans’ financial information was hacked this summer, putting about half of us at risk of identity theft. (to find out if you’re one in 143 million, start here) It was only a matter of time before one of the credit bureaus was hacked — I have to say I’m not entirely surprised.

There have been lots of rumors swirling around whether or not the Equifax “fix” is something you should sign up for and whether or not it’s enough. The short answer is that yes, you should sign up since the concerning clause about giving up certain legal rights has been removed (more on that here), but no, it’s probably still not enough to ensure you’re safe from future issues around identity theft. Besides, even if you’re one of the lucky ones whose information wasn’t lifted, chances are it was in another breach over the past couple years.

Here are 4 more things you can do to hopefully secure yourself against future issues:

Check your credit report right now — You can access your free reports from all 3 credit bureaus at AnnualCreditReport.com, or if you’ve already checked all three within the past year, use a free service like Credit Sesame or Credit Karma to at least see if there’s anything fishy with your credit score. If so, you may want to pay to have another credit report pulled to see what’s causing the issue in case it’s due to identity theft. (note that the Equifax service will provide you with a copy of their report)
File your taxes ASAP — One way that hackers use your SSN and other personal information is to file fake tax returns on your behalf to collect big refunds. In this scheme, the hackers are actually stealing from the IRS using your information, so you’re not out any money, but it can cause you IRS headaches if they use your information to do so because the onus is on you to prove that the tax return YOU’RE trying to file is the correct version. If you’ve already filed your return and a hacker tries to file a fake one, their scheme will be blocked.
Consider placing a credit freeze — This isn’t free, but this is the best way to simply lock down your credit so that no new accounts are opened using your info. The problem is that when you’re ready to open an account or apply for a mortgage, for example, you have to have it lifted, which also costs money. Credit monitoring services and fraud alert systems are a bit more reactive, but they’re free.
Check all your accounts going back to May, then make it a habit — One thing that’s extremely frustrating about massive hacks like this is that there’s always a delay in reporting it while the legal team works to cover their butts and the PR team gears up for the onslaught. The Equifax leak was open from mid-May through July, and yet we aren’t learning about this until September. In the meantime, who knows what’s happened with our personal information. It’s worth your time to review all your accounts to make sure there aren’t any errant transactions that you should report. Going forward, make it at least a monthly habit to look at each transaction to make sure it’s valid. I actually check my 3 main accounts as part of my morning routine — I check texts, then email, then Instagram, then Snapchat, then my checking account and credit cards.

If you find any issues

If you find fraudulent charges on your credit or debit card, report it to the bank immediately. It’s not uncommon for banks to have a 60 day window for reporting fraud — as long as you’re within that window, they’ll do all the work to get it fixed. (a big reason to check your accounts regularly)
If the problem extends to someone using your identity to open new accounts or file tax returns, then the steps you need to take are more extensive. The FTC has a great website that covers all the scenarios, so start there.

In the meantime, make sure you’re still staying vigilant by protecting your information to the best of your ability. These tips from a former con man can help.

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How Long Should You Keep Financial Documents?

January 11, 2017

When sorting through paperwork or electronic statements and other records, you may be wondering how long to keep what. Generally speaking, if you can access something online, like a bank account statement, bill or insurance claims letter, you don’t need to keep a paper copy. As long as you’re able to log into an account and download statements, shred the paper (and discontinue receiving paper statements) and reduce clutter.

For other things like receipts and tax returns, a scanned electronic copy also suffices when needed, so if you want to organize your files electronically, have at it. Just make sure you have a secure place to store digital assets like an external hard drive or encrypted cloud-based account. However, there are still a few things that require the originals, such as a will, marriage license, Social Security card, etc. While there are no hard and fast rules for all documents, following are some commonly suggested guidelines for how long you need to keep even the digital copies:

Tax Returns: Seven years is the general rule of thumb for keeping tax returns and the related documentation like W-2s, receipts for charitable donations and other paperwork to support income and deductions claimed. The basis for this is that the IRS has three years to audit your return for any reason from the date of filing. If during an audit, the IRS finds a substantial omission, such as under reporting income by 25% or more, it has six years to challenge your return, so you want to have those documents available to address the challenge.

Life Insurance Policies: Keep the original policy for the life of the policy plus 3 years.

Medical Records: For medical expenses you paid using a health savings or flexible spending account, you’ll want to keep receipts for up to seven years to show that the funds were spent on qualified expenses in case the IRS audits those accounts. Many HSA or FSA providers allow you to upload receipts for them to track. In that case, you can shred the receipts, but make sure you keep your online access for at least three years after you’ve spent the funds, just in case.

Receipts for Home Improvements: Any remodel projects or improvements that could enhance the value of your home can be added to your basis and possibly reduce any taxable gain when you sell your home, so keep these as long as you own the home for maximum tax savings.

Home Sale Documents: Once you’ve sold a home, you may be tempted to toss all the paperwork you signed back when you bought it, but keep the closing statement that shows you no longer own it in case a future mortgage lender asks for proof or there is any type of future title dispute on your old home.

Bank Statements/Credit Card Statements: Generally, it is recommended that you maintain one year’s worth of statements, unless they are easily accessible online through your bank. If the statements support tax deductions, they should be maintained for seven years along with your tax files.

Utility Bills: If utility bills support deductions made on your tax return, they should be kept for seven years from the end of the year in which they were claimed. All other bills can be shredded after three months as long as you’ve verified they’ve been paid.

Pay Stubs: If you still receive paper pay statements, keep the latest stub if it contains the year-to-date salary history or keep a year’s worth of stubs until you receive the year-end check that recaps the entire 12 months of pay and the taxes withheld. This is especially important to consider if you’re planning to apply for a mortgage in the coming year so that you can prove your income. Once you receive your W-2 and verify that it matches your pay stubs, you can safely shred your old stubs.

Warranty Documents: Dispose of these when the warranty expires or you get rid of the item under warranty.

Receipts for Purchases: Once you’ve verified that a charge to your bank account or credit card matches the purchase receipt, you may dispose of the receipt unless you need it for a future merchandise return. Pay special attention to restaurant receipts to ensure that the tip amount you wrote matches the charge to your account. Your receipt will serve as your proof if a wayward server inflates his/her tip.

Investment-Related Paperwork: It’s important to maintain a record of investment purchases in any taxable brokerage account so that you can properly figure any capital gains or losses when you sell. If you have stocks or mutual funds set up for dividend reinvestment, you’ll have multiple purchase transactions to track, so consider making a spreadsheet and keeping the statements as a back-up. You can get rid of any prospectuses you receive though (or sign up for electronic delivery and then delete the email). Investment management companies are required to provide these, but you can always find them online.

Things Not Worth Keeping: User manuals, which you can find online now and ATM receipts.

Things to Keep Forever in a Fireproof Safe or Bank Safety Deposit Box:

Birth certificates
Marriage certificates
Divorce decrees
Military discharge paperwork
Certificates of authenticity for any original artwork or other valuable property
Deed, car title – any document that would be difficult or impossible to replace

Once you determine which records you no longer need to keep, it’s important to properly dispose of them. Shredding the documents before putting them in recycling or the trash will help prevent identity theft. Then go and enjoy your less cluttered life!

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Don’t Get Blamed For What You Didn’t Do

September 09, 2016

Lately, I’ve become addicted to podcasts. It seems like I always have my headphones on or my Bluetooth speaker going (when no one else is at home) and there’s either a crime, financial or MMA podcast playing. It all started with Serial Podcast and continued with Undisclosed and then Serial Dynasty (later re-named “Truth and Justice”). All of those podcasts started with the Adnan Syed case, when he was convicted of murdering his ex-girlfriend, Hae Min Lee, in Baltimore back in 1999.

As a Baltimore resident, I ever so vaguely recalled that case, but the podcasts took the listeners deep into the details of every aspect of the crime, the trial and everything that’s happened since. The latest news is that Adnan is getting a new trial because it appears to me and the legions of listeners that he did not commit the crime. And one of the major players (Rabia Chaudry) has written a book, and I’m taking my daughter to her book signing in a few days!

All of the podcasts have moved on to other cases, and I’m still listening to all of them in Season 2 or 3 now. The fact that it started with a local case made me dig into all the details a bit more than I might have otherwise. Most of the podcasts deal with someone who is wrongfully imprisoned…or thought to be wrongly imprisoned. I can’t imagine spending 15 or 20 years in prison for a crime I didn’t commit like some of the people profiled in these podcasts. I’m not sure how one finds the strength to carry on with life and not just wallow in despair in situations like these.

While it may not be as dramatic as being in prison for a crime you didn’t commit, there is a serious chance that something in your credit history will be from a situation where you weren’t even remotely involved. This could be something as simple as an address being on your credit report for a place you’ve never lived or as sinister as a full scale premeditated identity theft. Regardless of where it is on that scale, there are some things you can do on a regular basis to either prevent or minimize the impact of incorrect data impacting your credit report, credit score or quality of life.

Check your credit reports on a regular basis. Through annualcreditreport.com, you can get one free copy of your credit report from Experian, Equifax and TransUnion. If you order Experian in January, Equifax in May and TransUnion in September, you’ll never be more than 4 months away from your next new credit report. When you get your credit report, make sure that all addresses listed are accurate and all accounts and any other names are actually yours. With my name, I almost ALWAYS have 3 or 4 “other Michael Smith” data on my reports so I have to correct my credit report a few times per year.

Stay on top of your credit score. Two great sites that I use, each with an app for smartphones, are Credit Karma and Credit Sesame. Each service (and both are free) will alert you when your credit score changes or if information on your credit report changes.

Recently, I applied for a mortgage in the morning, and I got an alert from Credit Sesame in the afternoon. It was lightning fast! Imagine if someone, not me, had applied for a mortgage in my name in a premeditated identity theft. I would have known well before the theft was fully in place and devastating to my life.

Shred your personal data! When you get a new debit card/credit card, shred the old one. When you get bank or 401(k) statements in the mail, either store them for a few years or scan into a PDF file and shred them. It’s an indictment on where we are are a society that we have to think about stuff like this today, but it’s where we are. Anything that would help a hacker hurt you should be shredded and destroyed before anyone can use it against you.

So if you find yourself in jail for a crime you didn’t commit, start a podcast, and I’ll listen. But if you happen to find yourself not incarcerated wrongfully, protect your identity! As they say, you’re better safe than sorry.

What to Do Before You Lose Your Phone

August 25, 2016

Earlier this year, I wrote about a cell phone case that can protect you from the potential harm of cell phone radiation and allows you to carry up to 3 cards in it. I mentioned one of the downsides as being “the risk of keeping your cards with your phone since if you lose it, you lose your cards too.” Well, after recently leaving my phone/credit cards on a bus, that risk isn’t just theoretical anymore. Here are some ways to protect yourself in case you lose your phone, your wallet, or both:

Make sure you have a password lock on your smartphone. Otherwise, anyone who gets your phone may have access to your personal information, including possibly financial accounts. I minimize the inconvenience of having to constantly unlock it by using a quick swipe pattern instead of a PIN or password.

Keep a backup phone. It can be an old phone that’s not worth much and should be able to be activated quickly without a contract. Ideally, it would be on a different network than your regular phone so you can also use it if you’re in an area where your the latter has poor service. Mine is on Ting, which charges by usage without a contract and uses the Sprint network.

Sign up for Google Voice. Google Voice is a free service that gives you a phone number that you can use to forward calls to other phones (plus Google voice chat) and a voicemail that’s converted into text and is accessible to read or listen to online. This way you can have your calls forwarded to any phone that’s accessible to you (like your backup phone) and have access to any text messages or voicemails you receive. You can then put your Google Voice number on your phone’s lock screen so someone can easily contact you if they find it. It’s also handy to be able to access messages while you’re on a plane or otherwise away from cell service and is quicker than porting your number when you get a new phone.

Use a phone tracking app. The iPhone has “Find My Phone” and Android phones have “Android Device Manager.” I used the Android app to verify that my phone was on the bus. I could also add a password or change my lock screen info, make the phone ring at maximum volume for 5 min, conserve battery power, and even erase all the contents of the phone.

Keep a spare credit card elsewhere. If you lose your credit card(s), you’ll want to cancel them so having another card you can use until you receive the new one(s) is very helpful. In particular, I use one of my spare cards for all auto-payments and never travel with it so if I lose my wallet, I don’t have to worry about updating all those auto-pays (and possibly missing one).

Fortunately, I was eventually able to get my phone back after contacting the bus company. The only cost was a nominal fee for a new debit card and about $20 for using my backup phone. Without taking those precautions, my financial information could have gotten into the wrong hands, or at least I would been without a phone or credit cards for a while. You may never have yours lost or stolen, but as they say, better safe than sorry!

Want more info on this or other financial topics? If you have a question, feel free to email me. You can also receive future blog posts by following me on Twitter and/or subscribing to my posts on the blog home page.

If It Sounds Too Good to Be True…

August 05, 2016

The Consumer Federation of America (CFA) and the North American Consumer Protection Investigators released a study based on complaints to local consumer organizations. This article discusses the top 10 categories of complaints. At number 10 is “Scams.” To quote the article, here are some of the top scams:

Tech support: A caller claiming to be with a well-known company such as Microsoft seeks access to your computer, warning you will lose files or suffer other harm if you don’t allow it.
The grandparent scam: A “grandchild” calls an older person, claiming to need quick cash for an emergency in another state or country.
CEO email: An email that appears to be from your company CEO asks employees to wire money to a foreign supplier for a deal that needs to close immediately — promising you’ll be reimbursed, of course.
IRS scam: A caller “from the IRS” wants money you owe, now, often in the form of a prepaid card (iTunes gift cards are also being used this way). The caller may warn that you’ll have to pay even more or that law enforcement officers will come to your home if you don’t comply.
Tax ID theft: In this case, the scammer poses as you and scoops up your tax refund. In many cases, taxpayers don’t find out about it until they can’t file their tax returns because someone beat them to it.

The common thread in these scams is that the scammer preys upon one of two emotions – fear or greed. By either promising something for free or using fear and pressure, the scammer hopes to use your emotions against you and in his favor. I’ve talked to quite a number of people who have fallen victim to a scam and have seen the financial distress that it caused.

For example, one of my friends has been out searching for a new job recently, and he was telling me about an offer he received from a company. They were offering a much higher salary than other companies he had interviewed with recently and definitely made him feel special throughout the interview process. It was almost as if they were telling him exactly what he wanted to hear. They offered him a role, and he was strongly considering accepting it, but there was a nagging little voice in his head that said something didn’t add up. He was contacted by a recruiter and hadn’t known much about this firm other than what they told him.

So we broke out the laptop and started doing some research. What we found was not spectacular. The leaders of the organization had a very checkered past, and while they treated their employees well, their customers were overcharged and charged for services never performed (at least in prior companies). He politely declined their offer, but he nearly accepted it because they used his emotions against him. It was the same modus operandi of the scams but with a different end goal.

If confronted with a situation like these scams, don’t ever give personal identifying information to anyone over the phone. Take a deep breath and a mental step backwards. Break out Google and do some research. Call your local consumer protection agency to see if others have reported scams.

As you go through your life and engage in potential transactions either as a consumer or a potential employee, remember to try to strip emotions from the deal (if it’s significant) and don’t allow anyone to manipulate your emotions against you. No one will be or should be as protective over your money as you. And remember the old phrase, “if it sounds too good to be true, it probably is.”

5 Reasons Not to Put Off Your Taxes

February 04, 2016

By now, you should have received the documents you need to file your taxes. I know it’s easy to procrastinate though. After all, I’ve had my share of late night runs to the post office on April 15^th.(You actually have until April 18^th to file your taxes this year because the IRS will be shut down on April 15^th for “Emancipation Day.”) But there are some very good reasons not to put off filing your taxes: Continue reading “5 Reasons Not to Put Off Your Taxes”

How To Protect Your Credit From Data Hackers

October 09, 2015

It seems like almost every week I’m reading about another company getting hacked and customer data being breached. Within the last month, I’ve read about at least five major security breaches. So far, I have been fortunate enough to escape being one of the impacted customers of these hacked companies. Continue reading “How To Protect Your Credit From Data Hackers”

Identity Theft Tips From A Former Con Man

September 09, 2015

Last week, while attending the Illinois CPA Society annual conference, I had the privilege of seeing Frank Abagnale, the con artist turned FBI agent on whom the movie Catch Me If You Can is based. He shared some alarming statistics with us about white collar crime and especially identity theft.

Continue reading “Identity Theft Tips From A Former Con Man”

Are You Financially Exposed?

August 31, 2015

If you had to expose your finances or pictures of yourself wearing only your “birthday suit,” which one would you choose? A recent survey from MasterCard revealed that a majority of Americans are concerned about financial information and Social Security numbers being exposed. In fact, consumers said they were less concerned about having their email accounts hacked (62%) or having their home robbed (59%). Going back to that not-so-lovely thought of having your private pictures made not so private, 55 percent said they would rather have naked pictures exposed online than their personal financial information stolen. Continue reading “Are You Financially Exposed?”

3 Tips To Protect Yourself When A “Creditor” Calls

August 05, 2015

A few months ago, my wife received a call from someone claiming that we owed money from an unpaid medical bill. If you know anything about my wife, the idea that we owe anyone anything is troubling. Considering how many doctor bills, hospital bills, dental bills, and who-knows-what bills cross our table every year, it would not be inconceivable for us to have missed a payment. Fearing that perhaps one bill did go unpaid and the possible threats of legal action and bad credit, my wife gave the caller our credit card information to satisfy the bill. Continue reading “3 Tips To Protect Yourself When A “Creditor” Calls”

Getting Rid Of Your Cell Phone? Wipe It Clean First

May 27, 2015

Cell phones have become so common in our world today that we forget how much sensitive information is contained on these innocuous devices. Such information in the wrong hands could give an unscrupulous person access to private information, including links and passwords to financial accounts and statements. I recently switched cell phone providers to reduce my cost and increase my coverage and reliability, but I was not prepared to make sure the data that had accumulated on my old phone was cleared out before passing it on to the next user. Continue reading “Getting Rid Of Your Cell Phone? Wipe It Clean First”

The Price of Inattenton

January 02, 2015

As we look back at the previous year, I have started thinking about people I’ve talked to this year who have left an impression on me. One of the more memorable people that I was able to have conversations with started with a story that was disturbing on a few levels, but has come to a relatively happy conclusion. The fun part for me was getting updates on her progress and seeing the change in her voice, posture and energy level as things got better. Continue reading “The Price of Inattenton”

8 Steps to Improve Your Credit Score

July 17, 2014

Have you had a rough patch in your financial life? Or maybe you’re trying to position yourself to get the lowest possible rate on a mortgage or even a new job. For whatever reason, you may be like one of the many people I speak to on our Financial Helpline and Ask a Planner sessions who are trying to improve their credit. If so, here are some steps you can take: Continue reading “8 Steps to Improve Your Credit Score”

Don’t Put All Your Eggs in One Case

January 09, 2014

I recently saw someone with a cell phone case that doubled as a sort of wallet. It had an opening to keep cards and cash so everything you need is in one place. At first, that seemed pretty neat. Who wouldn’t want to simplify their life?

Continue reading “Don’t Put All Your Eggs in One Case”

It Takes More Than a Helmet to Protect Yourself Today

November 22, 2013

If you ask fans of the NFL what one of the biggest news stories of the year is, many would say “player safety.” There have been numerous rule changes designed to limit the impact of violent collisions on players’ long term health. This is especially true with hits to the head and neck. Players can no longer use the crown of their helmets to tackle other players. The hoped-for result is fewer concussions that can lead to serious long term health consequences. Penalty flags are common for dangerous plays now and very often players are fined significant sums of money for illegal and dangerous hits. The league and the NFLPA (the players union) take safety and protection very seriously. Continue reading “It Takes More Than a Helmet to Protect Yourself Today”

9 Tips to Stay Safe on Public Wi-Fi

June 26, 2013

Whether you like it or not, we live in an information age, and you can get up-to-the-moment information on everything from news headlines to sports scores to financial accounts at your fingertips. But before you whip out that smartphone or wireless device to look up your checking account balance or stock portfolio, remember that you may not be the only one that sees what you see. Hackers and identity thieves live among us, and unbeknownst to you, they may be using your device to perpetuate unwanted activity or worse yet, stealing your personal information. Continue reading “9 Tips to Stay Safe on Public Wi-Fi”

What I Learned From Being a Victim of Identity Theft

October 26, 2012

A few years ago I was the victim of identity theft. Someone in Texas (where I’ve never lived…) was using my name and Social Security number and had gotten an apartment, satellite TV, utilities, and accounts with some local food establishments. Oh, they went to the doctor a lot too. Continue reading “What I Learned From Being a Victim of Identity Theft”

You Don’t Need To Pay Lifelock To Protect Yourself From Identity Theft

May 03, 2012

If you’ve read Greg’s post on computer malware, you may we wondering about other ways to protect yourself from the growing problem of identity theft. No, you don’t need to sign up with a company like Lifelock or one of the many credit monitoring services. (In fact, given the news around Lifelock, you can even say that it’s a bit of a scam itself.) The fact is that for low or no cost, you can get essentially the same protections that these companies are charging monthly fees by following these tips.

Guard your information

The first step in stealing your identity is for the identity thief to get your name and sensitive financial information like your Social Security or credit card numbers in order to get loans in your name or make withdrawals from your bank account. Here are some ways to protect that information:

Shred any documents with sensitive information on it before throwing them out.
Be careful of using your credit or debit cards at locations like remote gas stations or ATMs since thieves can attach skimming machines to them that steal your card info.
Verify that emails are coming from your financial institution before entering financial information and account passwords.
Keep a record of your credit card information so that you can quickly cancel a card that is lost or stolen.
If you have cards with Radio Frequency Identification or RFID, consider protecting them from scanners with an RFID safe wallet or credit card shield.
Avoid using your debit or credit cards in places like restaurants when they’re taken out of your sight.
Take steps to protect your computer and smartphone from malware.

Protect your credit

Even the best precautions won’t always work to prevent a thief from accessing your information. The second line of defense is to prevent the thief from using that info to open a line of credit in your name.

You can do that by setting a credit security freeze with each of the three credit bureaus. Since it prevents new creditors from accessing your credit file unless you specifically grant them access, it’s stronger than a fraud alert. Each state has slightly different procedures and fees. Where I live in California, placing and lifting the freeze is free for identity theft victims, $5 for people over 65, and $10 for everyone else and it stays active until you remove it.

Monitor your credit

If all else fails, you’ll want to catch the consequences of identity theft as soon as possible so you can quickly get it fixed. At the very least, look at your bank and credit card statements regularly for any fraudulent charges. You can also get free credit monitoring through creditkarma, which alerts you if there are any changes in your credit file like a new loan opened in your name. After all, a new loan probably won’t show up on your current statements. If you do find yourself a victim, you can learn about the steps to take here.

Take action

When you consider the costs in time, money, and stress of dealing with identity theft, it’s definitely worth taking these precautions. The problem is that it’s too easy to get complacent about something that you think won’t happen to you. But I’m sure the 1 out 18 US households that become victims each year probably thought that things like this only happen to “other people” too.

So in addition to protection yourself and your family, feel free to share this post with your friends and followers on Facebook and Twitter. If just 18 of them read it, odds are that you’ll save one of them from becoming another victim.

Just When You Thought It Was Safe to Use the Computer…

April 25, 2012

Has this ever happened to you? You’re sitting at your computer when all of a sudden a window pops up telling you that a virus has been detected and that if you don’t take immediate action, your computer will be harmed. I remember one such instance where a message popped up on my home computer telling me that I had a virus and needed to buy this software to remove the virus, and no matter what I clicked the message would remain. Even after I turned the computer off, when I turned it back on the message reappeared. In other words, my computer was being held ransom, and unless I paid the ransom (i.e. bought the software), I would not be able to access my computer. Continue reading “Just When You Thought It Was Safe to Use the Computer…”