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Don’t Let the Eclipse Leave You in the Dark About Financial Fraud

On Monday, August 21, North America will be treated to one of nature’s most awe-inspiring sights—a total solar eclipse. To see it safely, you need special glasses—and that fact has made the event an unintended reminder of the need for vigilance: experts are warning eclipse-watchers to look out for crooks peddling counterfeit viewing glasses. It’s a good reminder to be equally wary of hackers, identity thieves, and credit card fraudsters.

Ancient cultures saw total eclipses as omens of change. Consider taking this month’s cosmic event as a sign to be more vigilant about your financial well-being. A little watchfulness is a small price to pay to avoid becoming a victim of fraud or identity theft.

If you’re a victim of financial fraud, detecting it quickly and acting swiftly can help minimize its impact. Here’s an overview of what to look for, where to look, and how to respond if you find something amiss:

Check bank statements

The convenience of electronic payments and debit-card transactions reduced the volume of paper-check payments by $5.7 trillion from 2009 to 2012. The number of us who regularly balance our checkbooks has surely plummeted as well. That monthly exercise may be tedious, but it’s great for helping you spot shady activity on your accounts.

You don’t have to revert to a paper check register, but you should get in the habit of reviewing your bank-transaction records for irregularities. If you still receive a monthly statement in the mail, review it to make sure you recognize all the entries. Better still, even if you haven’t gone paperless, log in to your bank account’s web page (or use its smartphone app) once a week or so. Doing so may help you spot fishy transactions more quickly than a monthly accounting session.

 Click here to learn about how you can check your bank statements

Look for:

Charges you don’t recognize

Bear in mind that debit-card payments at online retailers, chain restaurants, and stores sometimes appear with cryptic descriptions. Receipts can help jog your memory, but a web search on an entry can often help as well. For example, a recent search for “TMG063 HARTFORD” (a vague transaction description on my account) reminded me of a dinner at my local Ted’s Montana Grill. If you identify the outlet but don’t recognize the purchase, you may have discovered fraudulent activity.

Unexpected ATM transactions

These can occur even when all your debit cards are accounted for if thieves counterfeit your card. Illicit withdrawals may occur at bank branches you never visit, or at hours when you’re normally working or asleep. Thieves also often withdraw the maximum amount permitted by your bank or credit union.
If problems are detected:

Call your financial institution’s 24-hour customer service line and choose the option for reporting suspicious activity. Customer service representatives will guide you through the steps required to verify the transactions and will explain how and when you can get your money back.

Be aware that reimbursement could take several days, and take steps to make sure any outstanding checks and scheduled auto-payments will be covered.

If your debit card is compromised, expect to be issued a new one. Some institutions will issue replacement cards at branch offices; others use snail mail for security reasons—a process that also can take a week or two, although you can sometimes expedite delivery if you need it sooner.

Credit card statements

The hardest thing about monitoring credit card usage for suspicious activity may be keeping track of the accounts you don’t use regularly. You’re probably used to reviewing the statements that come when payments are due, but you may not routinely check the accounts that you keep open for emergencies. Get in the habit of checking all your accounts regularly, via their online management tools or custom smartphone apps, and be on alert for suspicious activity.

 Click here to learn about what to look for in your credit card statements

Look for:

Charges you can’t account for

As noted above with respect to debit cards, saved receipts and some search-engine work can help you decipher confusing transaction descriptions. If you’ve identified the merchant and don’t recognize the purchase, you may have unauthorized activity on your card.

Unexpected cash advances

Cash withdrawals on credit cards require a personal identification number (PIN), and credit cards are typically only assigned PINs upon request. You can eliminate the possibility of unauthorized withdrawals by removing PINs from cards you don’t want used for cash advances.
If problems are detected:

Report suspicious charges to the card issuer immediately. Use the 24-number on the back of the card or the card issuer’s website. Even if you’re not sure a transaction is improper, call anyway; the card’s customer service staff can help you identify and double-check the purchase.

Freeze the card to prevent its use, or cancel and order replacement card(s).

Work with your card issuer to have bogus charges reversed and removed from your statement.

Credit reports

Credit reports take more effort to monitor than bank and credit card statements, but they also have far greater potential impact. Your credit reports document your credit history, including your loans and credit card accounts. They track your monthly payments on each account, whether they were made on time. They also record a variety of other important historical events in your borrowing history, going back at least ten years: if you have defaulted on a loan, had a debt sent to a collections agency, or filed for bankruptcy, that information will appear on your credit reports. And if that’s not significant enough, the information in your credit reports is also used to calculate your credit scores.

Credit reports don’t automatically arrive in your mailbox or email inbox every month. Some extra effort is required to get them, but it’s well worth it because of their impact. Check out the Consumer Financial Protection Bureau (CFPB) website for information on how to get your credit reports, and once you have them, study them carefully to look for signs of suspicious activity.

 Click here to learn about recognizing suspicious items in your credit report

Look for:

Credit accounts you don’t recognize

Loans, credit cards or other accounts you don’t recognize could be stray entries or signs of identity theft. Either way, it’s important that you take steps to clear the record and get them off your credit report as soon as possible.

Unknown collections accounts or public records

When identity thieves borrow money in a victim’s name, it’s no surprise that they don’t bother paying back the debt. Over time, a lender might respond to an unpaid loan by seeking a legal judgment—a court order to pay the debt—or sell the debt to a collections agency, which would then assume the right to collect the debt by any legal means. Judgments and collections are recorded on credit reports, and they can cause major decreases in credit scores.
If problems are detected:

Notify Experian to add a fraud alert to your credit file and they will automatically alert the other two credit bureaus (Equifax and Transunion) to do the same. A fraud alert lasts for 90 days and can be extended indefinitely. It notifies lenders who receive credit applications in your name to take extra steps to identify you before they review your credit file or credit score.

If suspicious activity persists, consider a security freeze. Also known as a credit freeze, this blocks anyone from getting access to your Experian credit file or credit score and so prevents anyone—including you—from borrowing money in your name. You must request credit freezes from Experian and the other two credit bureaus separately. You can remove the freezes if you need to grant someone access to your credit files—when applying for a loan or credit card, or when a landlord or phone company requests a credit check, for example. Allow a few days for the freezes to lift.

Send Experian and the other credit bureaus the information they need to identify and remove fraudulent or erroneous information from your credit file. Each bureau will furnish details on the documentation it needs.

Contact lender(s) associated with bogus accounts immediately. Follow their instructions to properly identify yourself and shut down any accounts linked to your name.
Adopt good cybersecurity habits

Don’t use web-browser bookmarks to save passwords to banking or shopping sites. And don’t bookmark them the old-fashioned way, on sticky notes.

Be smart about your passwords. The latest thinking calls for ditching those daunting sequences of letters, numbers, and symbols in favor of stringing together four or five random words. The goal is to make sure you can remember the sequence without having to take the security-compromising step of writing it down.

When using public wi-fi networks, try to avoid shopping and electronic banking sites, and make sure you’re using encrypted connections. The Federal Trade Commission has some great advice on this here.

Avoid giving credit card numbers or social security numbers over the phone; use your keypad whenever possible, and if you must say them out loud, make sure no one is eavesdropping.
Guard personal info in the offline world, too

We think of identity thieves and financial fraudsters as cybercriminals, but they often collect card information and security codes, and passwords “in the real world, ” so it’s important to protect personal information wherever you go.

Guard your PINs. Financial fraudsters are tech-savvy and know been known to use tiny hidden cameras to capture personal identification numbers (PINs). Even if no one’s nearby at the ATM or self-checkout kiosk, cover the keypad with your free hand as you type your code.

Check for card skimmers at ATMs, gas pumps and self-serve checkouts. Those high-tech thieves use 3D printers and other technology to make bogus card readers, or “skimmers,” that look just like the real thing. They fit seamlessly over legit card readers and can copy the information encoded in your card. Before you swipe your card into a self-serve reader, grip the reader firmly and give it a tug. If a skimmer has been planted there, it will come right off in your hand.

Report lost or stolen cards immediately. If you think you might find them again, you may be able to freeze the cards indefinitely; otherwise, cancel them and have new cards issued. Note that freezing and canceling cards means automatic payments associated with those accounts will cease to work, so take the necessary steps to avoid missed payments. Smartphone-payment apps (ApplePay, Google Wallet, etc.) linked to those cards will need to be updated as well.
If you suspect you’re a victim of financial crime, seek guidance from financial institutions on how best to notify law enforcement agencies, and which have jurisdiction over the activities in question.

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