Wednesday, October 11, 2017
In an earlier blog post, I cited research by Morningstar behavioral economist Sarah Newcomb that links a focus on the future with increased savings. Sounds simple enough, but the “f-word” (future) can be vague and scary to many people. It is easy to postpone action today for something that might be two or three decades down the road. For this reason, some people prefer to use the words “now” and “later” instead of “future goal.”
What to do? Use tools and techniques that develop your future-mindedness. Below are five ideas:
Experience Small Successes- Achieve success for motivation to move on to bigger goals. For example, if you complete the 30-Day $100 Savings Challenge a few times, you might ramp up the savings target to $200.
Do Backwards Thinking- Write down on a post-it note, on a board or wall, where you want to be and where you are now. Then, working backwards, insert post-its to identify all needed steps in between the two points.
Post-it Planning- Do the same thing as Backwards Thinking, but in reverse. Work forward from where you are now to where you want to be and use post-it notes to identify all needed steps in between the two points.
Listen to Powerful Stories- Google “Powerful Personal Finance Stories” and you will find inspiring stories about people like you who took small steps to turn their financial lives around.
Get a Glimpse of Your “Future Financial Self”- Research has shown that people who see themselves as an older person save more money. Web sites like Age Me and Change My Face can show you what you look like as an older person and give you a better appreciation of your “future self.
Thursday, October 5, 2017
In last week’s post, I noted that your personal identification information (PII) is now basically “out there” in perpetuity. In addition, proactive measures such as fraud alerts on credit cards and credit freezes will not deter non-credit related frauds such as tax refund identity theft and health insurance fraud. For that, we are simply told to “be vigilant,” probably for the rest of our lives. Hacked data can remain dormant for years before it is actually misused so you can’t let down your guard. Below are five vigilant practices to follow for insurance and taxes:
- File Your Income Taxes Early- Beat fraudsters to your tax refund. They now have the name, address, and Social Security number of 143 million Americans, which is everything needed to file a fraudulent tax return.
- Avoid Over-Withholding- Adjust your tax withholding, using a new W-4 form, to get a smaller refund or no refund; you’ll have little or no money stolen if someone uses your PII to claim a fraudulent tax refund.
- Look for Suspicious Activity- Beware of “red flags” for tax ID theft such as a tax notice from an unknown employer. If you receive such a notice, contact the employer to explain that someone stole your identity.
- Beware of Phony IRS Pretexting- Remember that the IRS rarely contacts taxpayers by phone and never by e-mail. Remember, the Equifax frausters have lots of information to sound convincing. Delete or hang up.
- Review Medical Bills and Explanation of Benefits (EOB) Statements- Scrutinize bills and EOBs to look for medical services that were not received by you. Medical identity theft is very serious and can potentially lead to death if a fraudster’s medical history (e.g., blood type and allergies) is co-mingled with a victim’s.
Wednesday, September 27, 2017
Ever since the Equifax hack was announced on September 7, 2017, I’ve been seeing the words “practice vigilance” and “be vigilant” with little or no explanation about how to actually do this. According to online dictionaries, vigilant means “being on the lookout for danger” or “being keenly watchful and ever alert.” That sounds fine, but the reality is personal identification information (PII) of 143 million people is now “out there” in perpetuity. In addition, “staying vigilant” is often unsustainable because it requires time and mental energy.
What to do? Convert vague advice into concrete action steps that can be practiced for the remainder of your life. Why? That is how long your PII can be misused. Hacked data can remain dormant for years before it is actually misused. In addition, people can only take action to stop new account fraud (see credit freezes, below). Other frauds, unfortunately, can only be detected after they happen. Below are 20 vigilant practices to put into practice:
- Carefully Review Credit Card Statements- Look for unauthorized charges and/or unknown merchants; especially beware of small charges (e.g., $1) that fraudsters may make in anticipation of larger charges later and suspicious recurring charges for products or services that were not purchased
- Carefully Review Bank Account Statements- Look for unauthorized withdrawals and account transfers
- Reconcile Your Checkbook Monthly- Look for unauthorized transactions and checks with changed payees
- Secure Your Debit Cards- Know that it can take weeks to recover funds that are stolen from a bank account
- Use Credit Instead of Debit- Do this for better fraud protection and to postpone payment for a purchase
- Secure Your Checkbook- Keep it out of plain sight and immediately report missing checks to your bank
- Consider a Credit Freeze- Prevent lenders from reviewing your credit to head off new fraudulent accounts
- Use Strong Computer Passwords- Don’t use your birth date because this information has now been exposed
- Shred Personal Documents- Use a crosscut shredder to destroy old credit card, bank, and broker statements
- Check Your Credit Report- Request one credit report every four months on a rotating basis from the “Big Three” credit bureaus (Experian, Equifax, and TransUnion) via www.annualcreditreport.com
- Monitor Your Credit Score- Look for a sharp drop in your score, which could indicate fraudulent activity
- Never Let Your Cards Out of Sight- Use credit and debit cards for payment only where you can swipe them yourself. For gasoline and restaurant meals, try to pay at a register or keep attendants and servers in sight
- Secure Electronic Devices- Put passwords on laptops, tablets, and phones if used for financial transactions
- Practice Digital Security- Guard passwords, PINs, security questions, and other account login information
- Secure Sensitive Data at Home- Do this when contractors, caregivers, and others have unsupervised access
- Smash Old PC Hard Drives and Cell Phones- Do this to assure that sensitive saved data cannot be misused
- Beware of Phishing Frauds- Delete suspicious e-mails and text messages that request PII and/or payment;remember that future phishing schemes may be more personalized as a result of PII stolen in the Equifax hack
- Avoid Remote ATMs- Do not use ATMs far from bank cameras that may have skimming devices attached
- Beware Public Wi-Fi Connections- Don’t use unprotected Wi-Fi for purchases or banking transactions
- Take Advantage of Free Credit Monitoring- Sign up for post-hack credit monitoring, when offered; it doesn’t cost you anything and will save on regular costs that typically range around $120 to $150 per year.
Many of the above actions can become personal habits or “decision rules” that you simply adopt as a matter of practice (e.g., checking credit reports and bank statements). Others can be implemented on an “as needed” basis (e.g., smashing hard drives). The next time someone says “be vigilant,” don’t brush it off. Take positive action to protect yourself against future frauds and to detect possible fraud from your data that was stolen from Equifax.
Wednesday, September 20, 2017
Credit Freeze Information in the Wake of the Equifax Hack
I guess I touched a nerve with my post about the Equifax hack last week. Over 600 people have viewed it so far. This week's post is the sequel. I'm pleased to report that, after 8 dropped phone calls, 3 inaccessible web sites, and 2 certified mail requests, I have (finally) frozen all my credit with four credit reporting agencies, probably for the remainder of my life.
Credit experts recommend that consumers freeze their credit to reduce their risk of becoming an identity theft victim. This has to be done individually with each of the “Big Three” credit reporting agencies (Equifax, Experian, and TransUnion), plus some experts also recommend doing a freeze with a lesser-known credit reporting agency called Innovis to “cover all the bases.” That means making 4 separate freeze requests per person or 8 requests for a couple.
By freezing your credit, you prevent potential creditors from accessing your credit file, thereby preventing identity thieves from opening accounts in your name. However, credit freezes will not deter non-credit related frauds such as tax refund identity theft and health insurance fraud. For that, consumers are simply told to “be vigilant.”
Credit freeze requests can be made online, by phone, or by certified U.S. mail. Expect to devote some time to this task. Below is contact information for each credit reporting agency for each method of contact to request a credit freeze:
Equifax: Equifax Security Freeze, P.O. Box 105788, Atlanta, GA 30348
Experian: Experian, P.O. Box 9554, Allen, TX 75013
TransUnion: TransUnion LLC, P.O. Box 2000, Chester, PA 19016
Innovis: Innovis Customer Assistance, P.O. Box 26, Pittsburgh, PA 15230-0026
- Full name (with middle initial) and former name, if applicable
- Current address and former addresses within the last five years
- Social Security number
- Full date of birth (month, day, year)
- Photocopies of two forms of identification such as a government-issued identity card and proof of residence such as phone bill or utility company bill.
Wednesday, September 13, 2017
I usually try to avoid long lines and peak crowds as a way to reduce wasted time and mental stress. It didn’t quite work out that way this week. As everyone knows by now, about 143 million Americans had key pieces of their personal identification information (PII) stolen in the Equifax hack. We’re talking about the “holy grail” of PII for identity thieves: Social Security numbers, birth dates, addresses, credit card numbers, and other key data.
As if that wasn’t enough, consumers were basically told to “deal with it” ourselves: check our credit reports, sign up for free (for now) credit monitoring, request a fraud alert, and freeze our credit. All at our own expense (both time and money), of course. If the traffic on I-95 in Florida fleeing Hurricane Irma looked bad, imagine millions of Americans simultaneously trying to take the four recommended actions noted above. Yes….total gridlock.
While I’ve toyed with the idea for years, the Equifax hack immediately convinced me to freeze my credit. By taking this step, you prevent potential creditors from accessing your credit file, thereby preventing identity thieves from opening accounts in your name. Unfortunately, this is easier said than done. I’ve been at it for four days now and encountered two “temporarily unavailable” web sites and phone calls that drop with busy signals.
We’re told to “keep trying” and I will, until I am credit frozen by the “Big 3”credit reporting agencies or CRAs (Equifax, Experian, and TransUnion). Some credit experts are also recommending freezes with another agency called Innovis. Too much is at stake not to. Unfortunately, each CRA must be contacted separately. That’s 4 contacts per person. It would be so much easier if we could contact one central site like www.annualcreditreport.com for credit reports.
To avoid online and phone gridlock, you can also request credit freezes by certified U.S. mail. I found an Indiana government web site with helpful template request letters but double-check the addresses for security freezes on each CRA’s web site. Some did not match the templates. Even after doing all this, you’re not done. Your PII is now basically “out there” in perpetuity. Credit freezes will also not deter non-credit frauds such as tax refund theft and health insurance fraud. For that, we are simply told to “be vigilant,” probably for the rest of our lives.
In an earlier blog post , I cited research by Morningstar behavioral economist Sarah Newcomb that links a focus on the future wit...
I usually try to avoid long lines and peak crowds as a way to reduce wasted time and mental stress. It didn’t quite work out that way this...
Credit Freeze Information in the Wake of the Equifax Hack I guess I touched a nerve with my post about the Equifax hack last week. Over 6...
In last week’s post, I noted that your personal identification information (PII) is now basically “out there” in perpetuity. In addition...