Identity Theft How to Protect Your Name (20 page)

Travelers insurance, for example, sells stand alone policies from $59 to $180 a year.

You might also be able to find coverage through your credit card companies, bank or employer. An employer can purchase coverage under a legal insurance policy and you pay the premium out of your pay-check.

Having coverage for ID theft won’t protect you from
the problem in the first place. It will only help you
once it has happened. So, on one level it offers peace
of mind…but you don’t want to have to use it. The
laws against ID theft and the insurance you can buy
will be less effective in the long-run than the simple
preventive measures you can take to avoid the crime
altogether.

When shopping for this kind of insurance, look for: •

price;

•

content (what expense will be covered); and

•

overlay (whether you already have coverage elsewhere).

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C R E D I T M O N I T O R I N G S E R V I C E S

Insurance companies also have been partnering with credit management and monitoring agencies to provide new services to consumers—but at a cost. For example, ING Direct has partnered with Privista to give customers, among other things, online access to weekly credit reports using Equifax credit data, weekly updated credit scores and personalized tips to improve your credit.

These services can cost between $30 to more than $100 a year. Equifax has teamed up with the insurer American International Group (AIG) to offer specialized insurance. Equifax’s Credit Watch product promises to send alerts to consumers via e-mail or letter within 24 hours after something pops up on their credit report. The company will also reimburse you up to $2,500 in identity theft costs.

The same companies that record your credit histories and market your good name and reputation
also sell services so you can protect your credit.

It’s important that you make sure that the monitoring service you choose or try out
delivers data in a useful format
. Consumers should not have to pay to have their credit reports monitored, but until legislation changes the mechanics behind reporting, marketing and monitoring people’s credit reports, you have to decide how much you’re willing to pay for services. Be wary of how these programs are promoted: many offer “free” services of one month,
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then will gladly charge you $80 for the year if you forget to call and cancel.

The cheapest route for consumers is to see what protection services your credit card issuers offer at no
charge. Bank of America, for example, started advertising its Total Security Protection program to
people who get their credit cards through the bank.

Bank of America’s program draws from services the big consumer bank already offers: exempting the customer from liability for unauthorized charges and account monitoring for unusual activity. Discover, another card company, offers customers free cards with “perishable” (one-time only) account numbers for making online purchases.

Many of the credit watch services only monitor one
of the three major credit bureaus. As with anything,
make sure you know what you’re getting before you
buy. Check out any company you’re not familiar
with before doing business with them. Contact your
local consumer protection agency or the Better Business Bureau to find out if they have any complaints
on file.

Online services
are also cropping up to help you monitor your personal information. Cardcops (
www.cardcops.com
), for example, gathers up credit card numbers in cyberspace from public areas. Where do
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they find them? In chat rooms, search engines (have you ever Googled your credit card number?), on merchants’ Web sites that accidentally post customer orders and credit card numbers. Cardcops takes the numbers it finds and puts them into a database that you can access and see if your personal information is floating out there in cyberspace.

B I O M E T R I C S

You might soon find yourself swiping your fingerprint instead of your check card when you go to the market for milk. Biometric technology (which identifies an individual by a physical attribute, such as the sound of his or her voice, or recognition of eyes, face or even DNA) is closer than you think. Within the next five years, biometric checkout lanes could be standard. Fast-food giant McDonald’s has already taken fingerprints for payment during a test in Fresno, California.

The biometrics market is still in a curious state of
anticipation as multiple government agencies mull
what will work best for everything from passports
to drivers’ licenses. At the same time, civil liberties
groups and privacy advocates are urging caution.

At three of its grocery stores in Texas, Kroger uses technology that lets consumers scan their fingerprints at the checkout counter. Once the system recognizes the shopper, it charges their purchases to a designated credit card or checking account.

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If given the opportunity to use a biometric system at the market or bank, consider accepting it. Most banking and security experts predict that fingerprint, hand, iris or facial recognition will become widely used in the 2000s. Fingerprint biometrics are already used to check welfare eligibility in California, Texas and New York, and some governments—the Philippines, Argentina, Hong Kong—are creating national ID programs with the technology. And dozens of Fortune 500 companies already use fingerprint scans for network or PC

access.

T I P S F O R B U S I N E S S E S

The focus of this book has been on what consumers can do to prevent ID theft. But it’s worth mentioning a few tips for businesses, since many consumers are running small businesses themselves and need to prevent ID theft in their personal life by changing their work setting habits. Some tips: •

Review your bank statements regularly, and ensure that the
authorized signers
are not the same people who reconcile the account.

•

Have Social Security, and as many other checks as possible, deposited directly into your bank account rather than mailed to you.

•

Review all
hiring procedures
. Know your employees. Consider background checks.

•

Make sure two people are responsible for accounts payable, and ensure that mailroom personnel and procedures are sound.

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•

Keep all check stock or cash equivalents in a secure and locked facility.

•

Change
keys, entry codes and passwords
periodically to prevent routine access to storage areas and computers.

•

Consider
surprise audits of your own
accounts
.

•

Consider moving check disbursement activity to electronic payment.

•

Read and understand your bank contracts regarding liability for fraud under the Uniform Commercial Code.

•

Maintain
contact with other businesses
in your area so you can receive timely information on fraud occurrences.

•

Use bank services like positive pay, expedited return information and signature verification systems to protect your accounts payable and accounts receivable areas.

•

Purchase
check stock from well-established vendors
. If you process your payables through a service bureau, make sure you have a copy of its security procedures.

•

Reconcile your check disbursements and deposits regularly.

•

If a payment account is fraudulently used, close the account as soon as possible.

•

Be cautious when using refund accounts, such as rebates for subscriptions. This is another target for check fraud. The
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checks are relatively easy to obtain and can be used for counterfeits.

•

Evaluate the use of
negative check file
databases
, especially if you accept a large number of payments by check.

•

Find ways to replace paper documents with electronic payment devices.

•

Know your customers
.

In the normal course of the day, staff members will be working with sensitive information. They should take care not to leave papers, forms, reports and so on out at their workstations—especially if the area is not completely secured. Even seemingly harmless documents can be used against the company and employ.

Employees who work in the human resources, payroll and benefits departments are commonly bound by specific rules that govern their access to information and that include termination penalties for violat-ing their employers’ confidentiality policies. Make sure they understand these rules—and that the rules will be enforced.

C O N C L U S I O N

A lot of prevention has to do with making
lifestyle
changes
. It’s about how you manage your mail, financial records and bank accounts, pay bills, use your credit cards, use the Internet…and even pick topics of conversation at a cocktail party.

The next chapter is more of an extension of this chapter. It deals with ways of preventing identity theft via
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the changes you make to your daily life. You’ll find that a major joint of access to your identity involves the Internet, so you’ll find some techniques to implement when you’re online, whether you’re in a community chat room or on a merchant’s site ready to buy.

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9

CHANGES

It’s hard to know these days which way is the “safer”

way to pay for something with a credit card: online with a known vendor or over the phone with an equally well-known merchant? Can a phone line’s security be compromised as easily as an online transaction?

Trouble is, no one knows. It’s hard to know when and where a
breach in your personal security
will occur.

The most secure way to pay for something is with
cash. But few people resort to carrying cold hard
cash in their wallets—not because they fear being
mugged, but because it’s not as convenient or they
just don’t have it (i.e., they buy on credit).

Many of the conveniences we enjoy today result in a relinquishment of security on some level. For example, you can use a debit card instead of writing a check when you go to the supermarket; you can make pur-1 9 7

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chases from the
comforts of your home
on the Internet with a credit card; and you can sit on a public bench in a public park and log onto the Internet using a wireless network set up for people like you who use your lunch hour to write e-mails and
hotsink
critical information
to and from your PDA.

For purposes of safeguarding your identity, would you be willing to make changes to your lifestyle that may be inconvenient in today’s world? Ask yourself: •

Can I get rid of the extra credit cards?

All of them?

•

Can I find a system of passwords rather than resorting to the same old password?

•

Can I organize my financial records and shred everything I don’t need that contains my personal information?

•

Can I resist online commerce?

•

Can I change the way I pay bills, use mail and discard unwanted material?

How you answer these questions says something about how serious you regard your identity…and
how dedi-cated you are
at protecting that identity.

W H E N Y O U ’ R E O N L I N E

The Internet provides a huge window of opportunity for criminals. With the easy availability of family Web pages on the Internet, be cautious about the kind of
information you post
there.

Posting pictures of the inside of your home on the Internet for friends and family to see might seem like
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fun, but the photos give a thief a road-map of what type of valuables are in your home and where they’re located.
Do not
: •

post the itinerary for your upcoming vacation; •

post information or photos about col-lectibles; •

post family information, names, favor-ite places, memories or something about your heritage;

•

post information about your child, such as his or her age, photos, after-school activities, friends or hang-outs; or •

post your address, place of business, family names or information about who you do business with.

The key to
noticing a secure Web site
is in the URL.

When you log on to a Web site, take a look at where you see the “http” in the address, after which there will be a semicolon. If you’re on a site that’s supposed to be secure, such as a place where you make actual purchases and input personal information, you’ll see an “s” pop up after the “http.” For example, when you go into
Amazon.com
and you’re starting to buy something, it’s going to say “https” at the very top in that URL page.

You can also go to something called
www.bizrate.com
, a Web site that displays
e-business ratings
by consumers.

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Make sure every Web site you patronize has a toll-free number, which gives you the ability or the opportunity to call in your order. Any good, legitimate outfit will offer a number (many of them toll-free) on the home page, giving you the option of
ordering over the phone.