Protect Your Good Credit

Today’s marketplace boasts a plethora of technical gadgets. There are palm-size phones, TVs, stereos, computers, medical monitors, etc. You can literally be “in touch” with just about any aspect of your life by a gadget that fits in the palm of your hand.

Convenience, portability, accessibility—-it’s in demand! Sometimes, however, you should be careful of what you wish for. With all this accessibility and portability comes vulnerability! The device that can give you stock quotes instantly and allow you to respond to email anywhere, can also give your personal data to any thief with a little know-how!

A business associate was surprised last week when I pointed out that his new handheld, which is a phone, computer, internet link, camera, digital recorder, address book and calendar, could be accessed by a thief just as easily as he accesses it from his belt-holder. His response was similar to those I get most often in the same situation, “Oh, nobody would want to get access to this stuff.” Want to bet?

Just because most of what we do, say or enter into our little devices is mundane to us, doesn’t mean it isn’t valuable to a thief that knows how to make use of it. For computer/device hackers, those that don’t think they’re “special or important” enough to warrant monitoring by thieves are the ones most likely to be targeted.

If you bank online, pay bills online, have your paycheck direct deposited and utilize your credit/debit cards for daily purchases, you are the best target for a cyber thief. Most people who get their finances so automated that they don’t have to take time to review their monthly bills because they are paid by automatic draft are often lulled into a failure to regularly review their accounts or even balance their checkbooks.

What should you do?

Despite hectic schedules and multiple demands on your time, 1) review your online accounts regularly, at minimum, once a week. 2) Don’t keep passwords, accounts numbers, etc. stored in easily accessed computer files. When creating passwords, use upper and lower case letters in combination with numbers and symbols for greater security. 3) Change passwords/codes regularly such as every few weeks. 4) Be aware! Any area that offers free internet connection is an area that can allow a hacker to break into your device. 5) Turn wireless connection settings off when in these areas. 6) Don’t use birthdays, children’s names, social secuity numbers, etc. as passwords. 7) Keep paper records of tranactions and activity on accounts even if they’re completed online.

In Orwell’s book 1984, the totalitarian government, referred to as “big brother”, watches the movements and monitors the thoughts of all citizens. While the government may be able to keep up with citizens more easily by monitoring internet activity, frankly, that should be the least of your worries.

With all the reports in recent months about data theft, loss, and compromise, it’s no surprise to learn that BusinessWeek recently reported cyber thieves are “watching” the internet activity of many home PC users. Those that bank and manage their brokerage accounts online are being targeted by hackers and, in the last year, “$20 million has been stolen from online brokerage accounts.” The Securities & Exchange Commission is investigating these newest cyber thefts but with “$1.7 trillion worth of assets in online brokerage accounts, [it’s a] lucrative pursuit for thieves.”

With Democrat and Republican congressional representatives doing battle over everything from supreme court nominations to disaster relief to the war on terrorism, it’s no wonder they can’t come to a consensus on legislation for privacy and security protection for Americans’ personal data and accounts.

Microsoft, the company that once pushed for self-regulation within the industry, has now presented Congress with an outline to facilitate the creation of “comprehensive” federal legislation on this issue. Currently, individual state legislatures have been the forerunners of privacy and security legislation for citizens. Without a federal umbrella to tie it all together, however, Americans will continue to be vulnerable and their assets in jeopardy of theft.

Right now, the only real protection Americans have is what they establish for themselves. Vigilance in protecting their information, passwords, account numbers and monitoring their accounts closely is the only way they can arm themselves against cyber theft.

Marriage began as spiritual union between two people. In today’s world, it is a legal and financial union of both assets and debt. It’s also a merging of credit. People entering a marriage are usually thinking about merging their belongings, family holidays, etc., not their credit reports. Knowing what your partner’s credit history is prior to tying the knot can provide some insight into their outlook on money matters.

Not a very romantic a notion, is it? More than any other single issue, money problems can prove divisive for even the most devoted of couples. Rather than discover too late that your beloved lacks the ability to manage his/her finances, talk about it up front. Discuss what expectations and objectives you each have regarding spending, savings, retirement, etc.

In addition, be realistic about the impact of merging your credit and finances with another individual. If your potential partner has poor credit and you don’t, having joint accounts can potentially have an adverse affect your credit scores.

However, keeping finances separate only works well if both parties are open and honest with each other about their spending habits. Concealing credit card bills, purchases, etc. from your spouse will only spell trouble for you both down the road. In some states, even if accounts aren’t joint, each spouse can be liable for any credit debt incurred during the marriage.

Unfortunately, couples that don’t communicate honestly and clearly about their spending money habits often find out too late that they have a problem. (e.g. Going to purchase a new car and discovering their partner’s credit is too poor to qualify for the auto loan. Finding out your spouse has over-extended themselves on credit cards when applying for a home mortgage. Learning your spouse filed bankruptcy at some point in the past. Discovering your spouse defaulted on a student loan.)

The best way to protect yourself, your credit and your future earnings and savings is to seek out the advice and assistance of a qualified financial advisor before you say the “I dos”. Discuss your habits, expectations, etc. openly and determine upfront what the “ground rules” for money management are going to be for you and your partner. Learn what type of credit history your future partner has. If s/he has credit problems, find out what you can do now to mitigate them and reduce their impact on you once you are legally married.

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In dealing with the vast number of “customer service” centers of the companies you do business with, you should always double check any information given to you over the phone—-even if it means hanging up and calling the 800 number a second time!!!

Why? It’s simple, many of the people who answer customer service calls don’t know their employers products and/or services well enough to answer questions correctly. Additionally, even if they do have the correct answers, they may not communicate them to you effectively, if at all.

An example of this type situation just happened to me. I have an account that is due on the 15th of each month. The statement for October did not arrive and, being busy like most of us are, I didn’t realize that I hadn’t received the monthly statement or made payment until after the 15th. Concerned about late payments and derogatory credit, I called the company and explained I had not received the statement.

What I found out was the address on the statement was not correct and I had not previously noticed it. The slight difference in the printed address and my correct address could have resulted in the statement not being delivered timely. Mistakes and oversights happen—I understand that, what I could not understand were the comments made by the so-called “customer service” representative that I spoke to when I called the company’s 800 number.

His response to my pointing out the incorrect address on the statement, that I had not received it so, therefore, had not made a payment on the 15th was inexcusable. He made a snide remark that I should make the payment whether I have a statement or not. Just like most everyone else I know, the statements that come each month are my “reminders” and since life is often extremely busy it is easy to overlook a particular payment if your “reminder” doesn’t show up.

In addition, he refused to admit that the billing address on the statement was incorrect. As my frustration and anger grew, the only thing beneficial he offered was the fact that there was a 10-day grace period and since the payment could be made over the phone, if I paid it within that time-frame there would be no late charge. He then gave me two phone numbers. One to fax him a copy of an old statement showing the incorrect address and one to use to make my payment over the phone. BOTH NUMBERS WERE INCORRECT.

I called the 800 customer service line, again, waited on hold listening to bad musak forever, again, and, finally, I got another representative on the phone. This individual was much more helpful and offered some real information. The address problem would require further documentation, despite what I’d been told by the first guy. The 10-day grace period was correct information but I needed the right number to call to make the payment over the phone which she gave me. She apologized for my experience during the first call. She, too, was puzzled by the poor service and wrong numbers I was given the first time.

I then called to make my payment over the phone, got a confirmation number and called back to double check that the account had been credited appropriately. Three phone calls for one payment problem is better than a late payment being reported to your credit!

So, I encourage you, even if your experience calling a customer service department on one of your credit accounts has been positive, to make a follow-up call to ensure that a) the information you were given the first time is accurate, b) that any credits, corrections, etc. have actually been made to the account, and c) your contact information in their records is correct and complete.

Without confirmation, you don’t really know if your account problem has been addressed or not when dealing with companies over the phone. Calling a second time and questioning any problems, corrections, and/or credits will help ensure that your account remains in good standing.

ALWAYS document your calls well. Make notations of the date, times and name of the person you speak with each time you call. If necessary, ask to speak to a supervisor, to confirm information or address a problem.

Double check all information, just to be sure!

Fox News.com offered an article by Marshall Loeb, How To Protect Your Passwords, which provides some very good advice for ensuring hackers and keystroke trackers can’t easily guess your passwords. Loeb’s article reports that God, Love, Sex and Money are the four most common passwords people use making it very easy for identity theives to access your information.

Using birthdates, children’s names, family names, etc. are just as easy especially when coupled with the common words listed above. By using these names and dates, you are also giving theives additional information about yourself and your family. Tips for protecting yourself include:

Never using any personal information as a password or security codes, advises SecurityStats.com, a website that collects statistics on Internet security. That includes your name, family names, birthdates, addresses, telephone numbers, street names, car license plate numbers, etc.

Use a combination of letters, numbers and special characters. Avoid using dates (Aug2001) or simply tacking an extra number to a common word (password1).

Don’t write your password down anywhere.

Change your password often, say, every month or so.

Being pro-active by limiting and protecting access to your personal data is your best protection against identity theft. For more information and to read Loeb’s complete article, click here.

Continuing threats and exposures of personal data which leads to the theft of individual identities, brings one major thought to mind. The best protection against identity theft is to limit the accessibility to our personal data. Since businesses and government are taking their time about doing that, try limiting access by limiting the number of accounts you have out there.

Find the one credit card that you can use anywhere and keep it. Close all other accounts, including store cards. Saving 10% on a one-time purchase is not worth the risk of giving your data to yet another source.

Have you checked the credit limit being offered to you on your credit cards? If you haven’t, you should.

Most credit card companies issue cards with a certain credit limit based on your credit rating at the time of application. As time goes on, if your credit rating remains good and your payment history is positive, they will automatically increase your limit. While the company usually sends a “Congratulations, your excellent payment history has allowed us to increase your credit limit to $xxxx”, it doesn’t always. Sometimes you’ll just notice on your statement that the maximum you can charge on the card is higher than it was when you opened the account.

If you have one credit card which you use for any charge purchases or internet shopping, this credit limit increase will probably have little to no effect on your credit rating. Should you have several cards, with multiple companies and/or stores, unrequested increases in your credit limit can negatively impact your credit rating, thus reducing your credit scores. Why?

Part of the rating formula includes an assessment of how much credit you have available. If your credit score is 750 with $30,000 of available credit on a credit card(s), and you suddenly have available credit of $50,000, your score will likely drop. You don’t have to use the credit for it to decrease your score. You’re being rated on your potential to increase your unsecured debt.

Keeping a close eye on your credit card statements is the best way to ensure that your credit limit isn’t increased unnecessarily or that your APR isn’t changing. Increased APRs can also impact your credit rating. Introductory, or teaser, rates can result in one credit rating while an increase in that APR may result in a different rating, therefore, reducing your previously high score.

When it comes to credit cards—less is more! Have as few cards as possible, preferably only one. Make sure the limit is reasonable for your needs but not unnecessarily high. Don’t allow increases to this limit unless you really need and/or request it. For example, if you are planning a trip out of the country for an extended period, it may make sense to increase your limit just in case of an emergency. Once you return, however, request that the limit be reduced to its previous level.

Remember, you need to manage your credit rating along with your credit card(s) utilization, don’t let the creditor manage it for you!

Newsday.com recently reported that 600,000 current and former Times Warner employees, their dependents and beneficiaries, may have their identity compromised as a result of the loss of Time Warner’s computer tapes by a data-storage company. Among those records compromised is a former employee’s 7-year-old daughter.

If that’s not bad enough, a student of City University of New York discovered, during a google search, the files of more than 300 students who received student loans through the school. The social security numbers of the students were included in the files.

More and more it seems we are learning that it’s not a question of if our data will be compromised, it’s just a matter of when. The problem is too great to be easily solved. There is too much vulnerability and that vulnerability was identified too late.

While consumer groups, creditors, banking and data processing companies battle back and forth with our congressional representatives trying to draft legislation that will improve security, our identities are out there. “Virtual” thieves are savvy. They know how to find the weak spots in security systems and it’s even easier when they learn, in some cases, there’s no security at all.

Congress must act in the best interest of American citizens, not the businesses that are leaving us exposed. Every citizen has a stake in what takes place in both state and federal legislation. If you’re concerned about protecting yourself and/or your family, you should seek out the details of proposed legislation or communicate with your representatives about this serious issue.

There are numerous consumer groups that are working to ensure that legislation improves the situation, not worsen it. One group, the Consumers Union, offers on their site the ability to contact your representatives easily. Please click on the link and complete the form that will send a letter directly to your congressional representatives. If you have been the victim of identity theft and want to share your experience you can complete their online survey. The more noise Americans make regarding this threat, the more likely Congress will hear the demand and take the necessary action to protect us.

So far this year we have learned that millions of consumer personal data records have been compromised by numerous large creditors and processing companies. This information has been made available as a result of innovative legislation from several states. So far, however, it hasn’t dampened the increasing numbers of Americans who are victims of identity theft.

Bottom line, online criminal activity is increasing exponentially.

Why? According to a new report from Symantec Corp., there are huge software security flaws and home computers are being used without their owner’s knowledge. Sixty percent of the flaws are found in Web-based applications. The result allows hackers and computer “bots” to access vulnerable computers and their sensitive data. Whether it’s your home PC or the one at your office, your information is most likely a few clicks away from any internet thief interested in stealing it.

Arthur Wong, vice president for response and managed security services at Symantec, recently stated, “It’s more dangerous [today] than it ever has been.”

Even those who have installed security, firewalls and such are finding they are still prey to internet threats.

Is your computer safe? Has your identity been compromised? Vigilantly watching over your credit history and safeguarding your personal data is the only way to protect yourself until more thorough security measures at data sources and legislation for accountability are established. For every security measure taken, someone, somewhere is finding a way around it. Your best protection is to maintain as much control over your information as possible and to watch your credit history carefully. While many worry that checking credit too often can negatively impact their score, I believe it is better to risk a lower score than discover too late that my identity has been stolen.

For detailed article, see Washington Post’s Brian Krebs Hacked Home PCs Fueling Rapid Growth in Online Fraud.

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As a result of recent laws passed by several states, initially California, creditors and processors of consumer data must notify individuals if their data is compromised due to theft, loss or other means. Prior to these laws being passed, consumers were not made aware they may be at risk for identity theft due to their information being compromised.

Susanna Montezemolo, a policy analyst for the Consumers Union, which is lobbying Congress for tough[er] security and privacy standards, recently told FOXNews.com that, “We have millions of Americans who become victims of identity theft each year, and we need to do as much as possible to lower that number. States have been innovators in regard to identity security; we want to know that the state[s] will still be able to come out with effective solutions.”

Current legislative proposals in Congress will undercut the state laws and give companies the “authority” to “investigate” security breaches and determine for themselves whether or not consumers should be notified. This will effectively mitigate state legislation already in place around the country and we will be right back where we started—with those who manage the data and create the risk controlling the public’s knowledge of any breach.

The supporters of current Congressional proposals believe that the data handlers are capable of determining amongst themselves whether or not breached data could cause a consumer harm. They claim they don’t want to unduly alarm consumer’s by notifying them unnecessarily if they determine there is no risk to the individual. Their concern? Notification would be expensive for the businesses and possibly detrimental to their reputations.

Since most companies that traffick in consumer data do so at great profit, it is fairly apparent that they don’t want to be put in a position of liability or risk having the expense of notifying consumer’s everytime they experience a security breach. This position alone would clearly indicate that the frequency of security breaches and their lack of effort to prevent them is an inherent problem. They have obviously failed to effectively police themselves thus far, because if they had, identity theft wouldn’t be costing American citizens billions of dollars every year in out-of-pocket expenses.

If the companies traffickking in our personal data are allowed to “investigate and determine consumer risk” for themselves, we might as well accept that identity theft will simply become a greater threat to Americans than it is right now. If consumer’s are informed when their data is compromised and they have the right to pursue liability charges against the company that allowed the breach, then those companies might get serious about protecting our data.

Until then, we, as individuals, will pay for their lack of effort and Congress may just continue to let us do so!

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