How to Avoid Identity Theft

(Image credit: Getty Images)

published 30 April 2019

Ryan Ermey: Even if you haven't fallen victim to identity theft, it may be time to ask yourself how secure does your information feel? Brendan Pedersen joins the show to discuss spotting, preventing and recovering from ID theft in our main segment. On today's show, I review whether the old sayings you've heard about the market are actually true and Sandy and I talk food and beverage savings in the new edition of Deal or No Deal. That's all ahead on this episode of Your Money's Worth. Stick around.

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Ryan Ermey: That's one that you hear and the rationale behind it is that the stock market tends to post its weakest returns from May through October and its strongest from November through April. Our friends at the Stock Trader's Almanac keep track of this data and it turns out it's true. Since 1945, the May through October has been the worst six month period for the S&P 500, averaging a return of just 1.4%. In the other months, the average is 6.6%. The almanac advocates for this sort of rotational portfolio, or at least shows the results of a portfolio were you to rotate in and out of stocks for these six month periods. Someone could feasibly do that although the problem is you're going to run into transaction fees, you're going to run into tax issues if you're selling out of your entire portfolio every year. It's something that is a truism because it's true, but it may not make sense for most investors.

Ryan Ermey: It was coined by an economist back in the '20s. The theory suggests that women wear shorter skirt styles during periods of economic prosperity and positive market returns. There's been a number of theories posited about this, but the general idea is that when money's good, you want to show off and back in the day you wanted to show off your silk stockings with a short skirt. People were just a little bit more carefree. The roaring '20s was the big example of this. Mini skirts in the '80s were a big example of this. Then obviously when the economy goes downhill, women's styles become more modest.

Sandy Block: It's all over the place. The fashion no longer ... I just don't think that fashion is that predictable anymore. You can find long skirts, short skirts, medium skirts, right in my closet let alone out on the street. I think this stems from two very robust economic periods, the '20s and the '60s when skirts really were short because that was sort of a rebellious thing to do. But I think right now anything goes.

Ryan Ermey: Agreed. So the last two, once again, do have a basis in statistical fact. We're not sure you should necessarily make shifts in your portfolio based on any of these, but it's worth noting that these two actually have some basis in statistics. One of them is, "as goes January, so goes the year." This has been true since 1946. A positive return in January in the S&P 500 has resulted in an 11.6% average gain over the next 11 months, while January losses have resulted in only a 1.3% average gain. I'm sure as everyone remembers, after we took a huge dive at the end of December of 2018, or at the end of 2018 rather, in December, we had a big January this year. In fact, it was one of the best Januaries since World War II, a 7.9% gain for the month.

Ryan Ermey: Yeah, exactly. So in the third year of the presidential cycle, this is when it's in the president's best interest for the economy to be good so that everyone in the, say 18 months leading up to the election, remembers "Oh yeah, I mean, this is great." This is where we are. We're in that third year of the presidential cycle. That would suggest good market returns as well. So obviously, all of these things are to be taken with a grain of salt. Some of them, like the length of skirts or the winners of a football game, these things don't become part of the popular consciousness unless there is some historical back-tested truth to them. But honestly, those are completely worth ignoring. But it is fun to take a look at the ways that markets behave in patterns over time. There you have it folks. A fun, market heavy segment to kick off the show.

Brendan Pedersen: Yeah. Experts typically say that thieves are getting better at this. They're targeting the bits of data that are most effective at either stealing your identity or opening accounts in your name and the like. That's information like your passport number, your home addresses, date of birth, even customer card paying information. Things that make it very easy to open things in your name.

Brendan Pedersen: Yeah. The guy that I talked to in Texas was actually pretty lucky because the hospital communicated with him before the debt went to the collectors, right? If you start getting calls from debt collectors, it is a completely different process to solve that debt. Really there's no succinct way to describe that advice. Your best bet is looking at the recourses that you have underneath the Fair Debt Collections Act and the Fair Credit Reporting Act.

Brendan Pedersen: Right. I have to think of an example that aren't my own. For example, fame, maim, and ordain? Those are all words that are spelled differently but rhyme. If you have a nice number in the midst there, with a nice caps or symbol, that's a good one to take with you. And write it down on a piece of paper somewhere, lock it very far away, don't digitalize it at all, and just remember it.

Brendan Pedersen: Yeah, credit freezes are really big. Ever since the Equifax breach in 2017, or at least legislatively as of 2018, it's now free to freeze your credit according to Congress, or on the authority of Congress. That's really great because if your credit is frozen it becomes a lot harder for an ID thief, even with all of your personal information including Social Security number and all that fun stuff, it's a lot harder to open up those accounts in your name. It's not unheard of for it to happen, but those are usually flukes or maybe someone's frozen their credit in two of the three bureaus but forgot TransUnion, something like that.

Brendan Pedersen: Yeah. I mean, the one thing we always start with at Kiplinger are those .gov websites. We like the resources that are offered at ftc.gov and identitytheft.gov. Those are sources that are published by the Federal Trade Commission about identity theft and those will walk you step by step through what you should do for a variety of forms of identity theft. They don't generalize it. If you want to know about credit card theft or just credit account theft or even medical identity theft, it's all there and they will pair you off with a bunch of different places.

Ryan Ermey: The last thing I wanted to ask you about because I remember it was you and Miriam Cross and Lisa Gerstner reporting this story, and I know that you guys had sort of a nightmare tracking people down for the story because people really don't want to put their name out there as a victim of these kinds of scams. But it turns out that that's actually probably pretty smart of them to not talk to you.

Brendan Pedersen: Yeah. That's a great point. We did this story in 2015 when we went through identity theft. When we did it this year in 2019, our editor Mark Solheim told us that he wanted real people. So we went out and we were scouring all our sources, different parts of the internet, and it was really, really tough. The big reason for that is because, well, victims of identity theft don't really want to talk about their experience because it's embarrassing.

Brendan Pedersen: But at the same time, what victims either know implicitly or from experience is that when you are a victim of identity theft once, you are much more likely to experience it again because it's a lot easier. If your information is floating around on the dark web, it becomes much more likely for people, on the cheap, to pick up that information and try to hack another account or open another account in your name, this, that or the other.

Brendan Pedersen: 100%. It is really important to not broadcast the ins and outs of your particular theft. That goes for medical identity theft, that goes for credit cards, debit cards, the whole enchilada. Keep it to yourself. It's often best to stay anonymous as you're looking for help. No matter how well-intending a person that you encounter might seem, don't give them your address, don't give them your Social Security number. Just keep it to yourself.

Ryan Ermey: All right, before Sandy and I go, we wanted to do a food and beverage themed edition of Deal or No Deal. Mine is beverage themed. It's that Burger King has rolled out a new subscription service for $5 a month you get one small, hot coffee a day. Now, mathematically this is a deal if you go and get a few cups. In fact, if you go and get your 30 cups in a row, which is available to you, you'll end up paying about 17 cents a cup for a coffee, which isn't bad.

Sandy Block: Right. Yeah, I mean obviously if you want to spend less on coffee, make your coffee at home. My tip on this is I do buy a lot of coffee, but I bring my own cup and at the very least you'll get a 10-20% discount. What I've found in visiting very many coffee places is no one really knows how much to charge you when you bring your own cup so very often they charge you the absolute less. One time, in a McDonald's or something like that, I brought my own cup and because there was no key for that, they gave it to me for free. You can't beat that.

Ryan Ermey: There are plenty of tools on the internet that help you identify subscriptions that you're maybe no longer using and help you cancel them. One that I'm kind of excited about is Trim. That's part of their free service, or at least purportedly. I haven't tried it yet but I am going to try it hopefully for an upcoming issue of the magazine because they have a paid service through which they will negotiate bills for you, like your Comcast bill and things like that which in fact, even if I don't get assigned it, I'm still going to try it-

Sandy Block: So my deal is also subscription, but I think it's one that is worth looking at and it is this latest trend of ugly produce subscription services. The idea behind these, the most well known ones are Hungry Harvest, Imperfect Produce and Market Misfits, they're modeled after CSAs which I have used before where you contract with a farm to provide you with a box of fruit or vegetables once a week.

Sandy Block: And what they claim to be doing is buying ugly, bumpy produce from farms and selling it to you at a discount, and the prices are actually pretty reasonable. What I liked about looking at the services is particularly if you're single or there's just two of you, you can get a weekly ... some lettuce and various types of produce and vegetables for as little as 20 bucks. Since this is all online, I think a lot of CSAs you give them the money upfront and then you got to eat that bok choy all summer. Since this is online you can sign up and you can suspend it, you can cancel it, so it's pretty efficient. The selection looks really good, like I said. Prices are reasonable, anywhere from 20 to 40 depending on how much produce you get.

Sandy Block: And farmers, they're not tossing all this stuff out. They give it to the cows, they juice it, sometimes they donate it to food banks. I'm not sure that the promise of reducing agriculture waste is valid but it might reduce your own personal waste which is really where a lot of waste comes from, that people buy food that they can't use. Because they do allow you to buy smaller amounts than I think a lot of traditional CSAs do, and they give you dozens of choices. It's not just whatever the farmer grew.

Sandy Block: Yeah. I looked at some of the prices and actually they're very competitive even just going to the store. So now again, you get a lot of choices. You can do all organic if that's your thing. Some offer to get the food from local farmers, others are just getting them from big ag. Like I said, it's a good way to improve your diet and I think that if you do this correctly it could be a good way to save on money too.

Ryan Ermey: That's it for this episode of Your Money's Worth. For show notes and more great Kiplinger content on the topics we discussed on today's show, visit kiplinger.com/links/podcasts. You can stay connected with us on Twitter, Facebook or by emailing us at podcast@kiplinger.com. If you like the show, please remember to rate, review and subscribe to Your Money's Worth wherever you get your podcasts. Thanks for listening.

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Block joined Kiplinger in June 2012 from USA Today, where she was a reporter and personal finance columnist for more than 15 years. Prior to that, she worked for the Akron Beacon-Journal and Dow Jones Newswires. In 1993, she was a Knight-Bagehot fellow in economics and business journalism at the Columbia University Graduate School of Journalism. She has a BA in communications from Bethany College in Bethany, W.Va.

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