Ask Kim
Tricks ID Thieves Use
Knowing which red flags to watch for will help you protect your identity.
By Kimberly Lankford, Contributing Editor, Kiplinger's Personal Finance
June 7, 2010
My credit-card company called me and said that somebody tried to charge a penny to my account. When I explained that it wasn’t my charge, the issuer canceled my card and sent me a new one. Was this an identity thief at work? In the future, what can I do to protect myself from identity theft?
This is a common ploy for ID thieves, who test out your credit card with a small charge and then, if it goes through, start making big purchases. Crooks may even use programs with algorithms that run 16-digit numbers until they get a hit. Then they try to charge a penny or a dollar or two, making it look as if a charity is the recipient, says Adam Levin, chairman of Identity Theft 911, which sells ID-theft prevention services to businesses. “They’re hoping that because of the small size of the transaction, it will slip through filtering systems.”
Another trick ID thieves use is to impersonate an employee of your bank’s fraud department and fish for your sensitive information. After offering enough of your personal details to get in your trust, they may ask you for your Social Security number or the security code on your credit card. If you get a suspicious call, call the customer-service number on the back of your credit card.
It’s a good idea to regularly check your bank and credit-card balances online for suspicious transactions. You should also check your credit report to see whether anyone has applied for credit in your name. You can get one free credit report per year from each of the three credit bureaus at www.annualcreditreport.com. You could also put a credit freeze on your account, which blocks potential lenders from getting access to your credit report without your authorization. (Your current creditors are exempt from the freeze, and you can make charges to your current cards without unfreezing your account.) The protection works only if you freeze your credit at all three bureaus (Equifax.com, TransUnion.com and Experian.com). It generally costs $10 at each bureau to freeze the account and $10 to unfreeze it.
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Reader Comments (6)
Posted by: disarrayed at 06/08/2010 04:58:28 AM
Well arent there other online payment methods out there where you arent required to give any sort of ID what so ever!?
Posted by: Carol at 06/08/2010 08:02:25 AM
There is no charge for a senior citizen to place a credit freeze on his/her account.
Posted by: Jack Vance at 06/08/2010 08:05:03 AM
No one should have to PAY to freeze their credit reports. This information should only be accessible by the proper OWNER, NOT indifferent credit reporting bureaus who profit from the sale of OTHER people's private information. Consumers should be able to OPT-IN if they want their information bought and sold to the highest bidder. Otherwise, it should be PRIVATE. PERIOD. STOP CHARGING US FOR WHAT IS RIGHTFULLY OURS.
Posted by: sammontana at 06/08/2010 04:05:02 PM
I often use Skype and I pay with a prepaid voucher. It's called Paysafecard and It's very safe as you don't have to put in any ID and only the PIN of the voucher. But I don't know if we can use it here, too :-/
Posted by: Greg Nowak at 06/09/2010 07:05:49 AM
Ma'am, My wife and I are considering investing in a prepaid tuition plan for our childrens' education. Is there an on-line resource where I can view all prepaid tuition plans and see which states honor other states' plans? We are interested in taking advantage of the opportunity but would also like to offer our children some flexibility when choose a college or university in the future. Thank you for your assistance. Greg Nowak Homestead Florida
Posted by: John Niebuhr at 08/31/2010 04:03:30 PM
i really don't do a lot of shopping and have yet to buy anything online, have only 3 credit cards, and i regularly call them to find out balances and payment due dates on the day i write out checks which i photo copy; i also call my banks (2)...also (my) credit union. in other words i maintain extensive and accurate documentation -so, why do i need id theft protection? i think i can forgo it and if something happens i will act on it immediately!' thank you...