Identity Theft

Free credit freezes from Equifax

Many people have had very sensitive personal information exposed in the Equifax breach — Social Security numbers, account numbers, even drivers’ license numbers. Equifax is offering free credit freezes until November 21, 2017.

If you’re thinking of placing a freeze, consider the following:

  • A freeze means that no one (including you) can access your credit file until you unfreeze it, using a PIN or passphrase. That makes it harder for identity thieves to open new accounts in your name.
  • To be effective, you must place a freeze with all three credit reporting agencies — Equifax, TransUnion and Experian.
  • A freeze can cost you money every time you freeze and unfreeze your file- at a cost of $5 to $10 per agency each time, depending on your state’s law.

Fraud alerts are free.  With a fraud alert, creditors must try to verify your identity before extending new credit.  The alert lasts for 90 days, You can renew it but you will need to remind yourself or it will expire automatically.  Identity theft victims, however, are entitled to an extended fraud alert which lasts seven years.  To place an alert, contact any one of the three major credit reporting agencies, either by phone or online.

For more information, click here.

Teaching Suggestions

  • Ask students if they are willing to pay about $5 to $10 each time they freeze or unfreeze their accounts with each credit agency.
  • Let students debate the issue: “A fraud alert is better than a credit freeze.”

Discussion Questions

  1. What are the differences between a fraud alert and a credit freeze?
  2. Should you consider a fraud alert or credit freeze if you become a victim of an identity theft? Why or why not?
Categories: Chapter 5, Identity Theft | Tags: , | Leave a comment

IRS: Protect Yourself Online

The Internal Revenue Service, the states and the tax industry urge taxpayers to take steps to protect themselves online in the fight against identity theft.  Scammers, hackers and identity thieves are stealing taxpayers’ personal information and ultimately their money.  But, there are simple steps you can take to help protect yourselves, like keeping computer software up-to-date and being cautious about giving out your personal information.

Here are some best practices you can follow to protect your tax and financial information, click here.

  1. Understand and Use Security Software. Security software helps protect computers against the digital threats that are prevalent online.  The operating system will include security software from well-known companies or Internet providers.
  2. Allow Security Software to Update Automatically. Set security software to update automatically.  Malware–malicious software—evolves constantly, and your security software suite updates routinely to keep pace.
  3. Look for the “S.” When shopping or banking online, always ensure that the site uses encryption to protect your information.  Look for “https” at the beginning of the web address.
  4. Use Strong Passwords. Use passwords of eight or more characters, mixing letters, numbers and special characters.  Don’t use your name, birthdate or common words.
  5. Secure Wireless Networks. A wireless network sends a signal through the air that allows it to connect to the Internet.  If your home or business Wi-Fi is unsecure, it also allows any computer within range to access your wireless and potentially steal information from your computer.
  6. Be Cautious When Using Public Wireless Networks. Public Wi-Fi hotspots are convenient but often not secured.
  7. Avoid E-mail Phishing Attempts. Never reply to an emails, text or pop-up messages asking for personal, tax or financial information.  Never click on links even if they seem to be from organizations you trust.  Instead, go directly to the organization’s website.

Teaching Suggestions

  • Ask students which best practices they follow to protect their tax and financial information. Make a list and share it with other students.
  • Ask students to make a list of essential software tools available to them for keeping their financial/tax information secure.

Discussion Questions

  1. Why it might be prudent to purchase security software programs from well-known companies or Internet providers?
  2. Where should you keep your passwords list and why?
Categories: Chapter 5, Identity Theft | Tags: | Leave a comment

When Small Charges Can Signal a Big Crime

Counting every penny on your credit and debit card statements can help detect fraud

Most people looking at their bank statements would probably notice if their credit or debit card were used without their approval to purchase a big ticket item, and they would quickly call their bank or card issuer to report the error or fraudulent transaction.  But consumers are less likely to be suspicious of very small charges, including those less than a dollar…which is why criminals like to make them.

“These transactions might be signs that someone has learned your account information and is using it to commit a crime,” said Michael Benardo, manager of the (Federal Deposit Insurance Corporation) FDIC’s Cyber Fraud and Financial Crimes Section.  “That’s why it’s important to be on the lookout for fraudulent transactions, no matter how small.”

He added, “When thieves fraudulently obtain someone else’s credit or debit card information and create counterfeit card, they might test it out with a small transaction—like buying a pack of gum or a soda—to make sure the counterfeit card works before using it to make a big purchase.  If this test goes unnoticed, by the true account holder, thieves will use the card to buy something expensive that they want or that they can easily sell for cash.”

For more information, click here.

Teaching Suggestions

  • Ask students if they know someone who had his/her credit or debit card compromised. If so, how they detected the illegal charge and how the problem was solved.
  • Under what circumstances should you close the compromised account?

Discussion Questions

  1. Why is it important to regularly scrutinize your monthly credit and debit card statements?
  2. What can be consumers do to protect themselves from such frauds? What is the best way to catch this type of fraud?
Categories: Chapter 5, Credit Cards, Debit Cards, Identity Theft | Tags: , , | Leave a comment

Securities and Exchange Commission (SEC) Warns of Government Impersonators

The SEC has issued an investor alert warning people about fraudulent solicitations that purport to be affiliated with or sponsored by the Securities and Exchange Commission.

The SEC does not endorse investment offers, assist in the purchase or sale of securities, or participate in money transfers.  SEC staff will not, for example, contact individuals by telephone or e-mail for purposes of:

  • seeking assistance with a fund transfer
  • forwarding investment offers to them
  • advising individuals that they own certain securities
  • telling investors that they are eligible to receive disbursements from an investor claims fund or class action settlement; or
  • offering grants or other financial assistance (especially for an upfront fee).

If you receive a telephone call or e-mail from someone claiming to be from the SEC (or other government agency), always verify the person’s identity.  Use the SEC’s personnel locator, (202) 551-6000, to verify whether the caller is an SEC staff member and to speak with him or her directly.  In addition, you can call the SEC at (800) SEC-0330 for general information, including information about SEC enforcement actions and any investor claims funds.

For more information, click here.

Teaching Suggestions

  • Ask students to visit other websites, such as, consumer.gov and investor.gov for additional tips on investing wisely and avoiding fraud.
  • Ask students to find a list of international securities regulators on the website of the International Organization of Securities Commissions (IOSCO) and a directory of state and provincial regulators in Canada, Mexico, and the U.S. on the website of the North American Securities Administrators Association (NASAA).

Discussion Questions

  1. What actions can you take to protect yourself from government imposters?
  2. What are the tell-tale signs that an impersonator is contacting you to steal your financial information?
Categories: Chapters, Frauds and Scams, Identity Theft | Tags: , , | Leave a comment

Chip Card Scams

Scammers are taking advantage of millions of consumers who haven’t yet received a chip card.  For example, scammers are e-mailing people, posing as their card issuer.  The scammers claim that in order to issue a new chip card, they need to update your account by confirming some personal information or clicking on a link to continue the process.  Information received can be used to commit identify theft.  If they click on the link, they may unknowingly install malware on your device.

How can you tell if the e-mail is from a scammer?

  • There is no reason your card issuer needs to contact you by e-mail or by phone to confirm personal information before sending you a new chip card number.
  • Still not sure if the e-mail is a scam? Contact your card issuers at phone numbers on your cards.
  • Don’t trust links in e-mails. Only provide personal information through a company’s website if you typed in the web address yourself and you see that the site is secure, like a URL that begins https (the “s” stands for secure).

For more information, click here.

Teaching Suggestions

  • Ask students to visit other identify theft websites, such as, consumer.gov/idtheft, to learn what to do if your identity is stolen.
  • Ask students to compile a list of what actions can they take to ensure that their credit/debit cards and other financial information are secure.

Discussion Questions

  1. How do you discover that someone has stolen your identity?
  2. What steps can you take to thwart identity thieves?
Categories: Chapter 5, Frauds and Scams, Identity Theft, Uncategorized | Tags: , , , | Leave a comment

New Credit and Debit Chip Cards

Banks and card issuers have been sending out new credit and debit chip cards, usually as existing cards expire or need replacement.  If you haven’t gotten your new cards, don’t worry.  The rollout will continue at least through 2016.  If you want to know when yours new chip cards will arrive, contact your card issuers at the phone numbers on your cards.

Your new cards look like your old cards with one exception.  New cards have a small square metallic chip on the front.  The chip holds your payment data—some of which is currently held on the magnetic stripe on your old cards—and provides a unique code for each purchase.  The metallic chip is designed to reduce fraud, including counterfeiting.

Here’s how it works: To buy something in a store, instead of swiping your card, you’ll put it into a reader for few seconds.  Then you might have to sign or enter a PIN.  With each transaction, the chip generates a unique code needed for approval.  The code is good only for that transaction.  Because the security is always changing, it’s more difficult for someone to steal and use.

There will be no change in how you use your card online or by phone.  That means chip cards won’t prevent crooks from using stolen card numbers to buy online or by phone.  So it’s a good idea to still guard your card information closely, and check statements for suspicious activity.  If there is a problem, your consumer protections remain the same.

For more information, click here.

Teaching Suggestions

  • Ask students if they have received a new chip credit or debit card. Show how the new card differs from the old card.
  • Do you believe that new cards will help reduce fraud? Why or why not?

Discussion Questions

  1. How might scammers try to take advantage of the millions of consumers who have not yet received a chip card?
  2. How can you protect yourself from the scammers?
Categories: Chapter 5, Credit Cards, Frauds and Scams, Identity Theft | Tags: , | Leave a comment

Income Tax Identity Theft Baffles IRS

“Income tax identity theft is a huge problem that is only getting worse.”

According to a 2015 report of the General Accountability Office (GAO), the IRS paid out $5.8 billion in bogus refunds to identity thieves for the 2013 tax year–the latest year that complete data are available.  To make matters worse, the actual dollar amount is probably higher because of the difficulty of knowing the amount of undetected fraud.

To combat the problem, the IRS announced a new cooperative effort between the IRS, state tax administrators, and private tax preparation services to fight income tax identity theft.  A number of specific steps are outlined in this article.  Unfortunately, the experts admit there are additional problems to stopping identity thieves that are not addressed in the new program.  In fact, most experts agree that additional regulations are required to coordinate employer reporting of employee wages with Social Security reporting requirements.

For individual taxpayers, bogus tax returns become a very real and personal problem if their social security number is stolen and their personal tax return is flagged by the IRS as suspicious.  To help resolve disputed tax returns, the office of the National Taxpayer Advocate, which is an internal watchdog for consumers at the IRS, suggests that you file a police report and then mail a paper tax return with an attached Form 14039–Identity Theft Affidavit with a copy of the police report.  In addition to additional documentation, expect that it may take on average 278 days to resolve a claim if you become a victim of income tax identity theft.

For more information, click here.

Teaching Suggestions

You may want to use the information in this blog post and the original article to

  • Discuss the importance of protecting your personal identity and especially your social security number.
  • Stress the importance of monitoring your credit report and all financial documents that could indicate your personal identity has been stolen.

Discussion Questions

  1. What steps can you take to protect your personal identity?
  2. There are a number of credit monitoring services that will help protect your identity. Most charge $75 to $100 or more a year to monitor your financial and personal information.  Do you feel this  service is worth the cost?
Categories: Chapter 3, Chapter 5, Financial Planning, Identity Theft, Taxes | Tags: , , | Leave a comment

Internet Fraud

How many people are scammed into sending money or giving personal information each year?
Answer: Millions!!

Types of Internet Fraud

  • Internet auction fraud—involves the misrepresentation of a product advertised for sale on an Internet auction site, or non-delivery of merchandise.
  • Credit card fraud—the unauthorized use of credit/debit card, or card number, scammers fraudulently obtain money or property.
  • Investment fraud—an offer using false claims to solicit investments or loans, or providing purchase, use, or trade of forged or counterfeit securities.
  • Nigerian letter or “419” fraud—named for the violation of Section 419 of the Nigerian Criminal Code, it combines the threat of impersonation fraud with a variation of an advance fee scheme in which a letter, e-mail, or fax is received by a victim.

Tips for Avoiding Internet Fraud

  • Know your seller – If you don’t know who you are buying from online, do some research.
  • Protect your personal information – Don’t provide it in response to an e-mail, a pop-up, or website you’ve linked to from an e-mail or web page.

For more information, click here.

Teaching Suggestions

  • Bring to class Internet-related problems and examples of individuals or families. Suggest ways in which these problems might be solved.
  • Compile a list of places and organizations where a person can call to report Internet fraud.

Discussion Questions

  1. While the Internet makes everyday tasks faster and more convenient, like stopping, banking, and communicating, why it’s important to be safe, secure, and responsible online.
  2. What are some basic precautions we can take to protect our computer and personal data from theft, misuse, and destruction?
Categories: Chapter 6, Credit Cards, Frauds and Scams, Identity Theft | Tags: , , , | Leave a comment

Avoiding Banking App Errors

While smartphone apps have made banking easier than ever, threats to financial security continue to grow.  However, some simple actions can be taken to avoid banking app mistakes.

1.    Don’t conduct banking transactions on public Wi-Fi networks since they are vulnerable to hackers. Use a virtual private network (VPN), which provides added security and encryption.
2.    Log out after your session to prevent a thief from getting access to your bank account.
3.    Select a not-so-obvious username. Create password recovery questions with responses that are difficult to obtain from public records.
4.    Update your app when a new version is available to take advantage new security features.
5.    Create a strong password with special characters, and it should be at least 12 characters long. Change your password every 90 days.

For additional information on banking app errors, click here.

Teaching Suggestions

  • Have students talk with others about their experiences using banking apps.
  • Have students locate online information about the latest security features fof banking apps.

Discussion Questions 

  1. What are benefits of costs of banking apps?
  2. How might banking apps be improved for increased financial security?
Categories: Chapter 4, Financial Services, Frauds and Scams, Identity Theft | Tags: , , | Leave a comment

Be Smart About Your Smartphone

You just bought the latest Smartphone.  You loaded all your favorite apps–online banking, GPS, even an app to track your health.

But now your phone is full of information about you–how much money you have, where you are and whether you’ve gained a little weight.  Your information can cause problems if it’s in the wrong hands.  Want to protect it?  These tips are for you:

  • Set you phone to lock automatically. When you don’t use the phone for a few minutes, the phone should automatically lock itself and require a password to reopen.
  • Use passwords for your phone. In addition to a password to unlock your phone, use a different passwords for each shopping or financial app. Don’t share your passwords with anyone.
  • Be wise about Wi-Fi. Don’t send personal information on a public wireless network in a coffee shop, library or hotel. Wait until you can use an encrypted Wi-Fi network that requires a password.
  • Foil phishing attempts. Don’t text or email personal information, and delete any texts or email messages that ask for it. If you must give out personal information, do it only if you type in the organization’s web address yourself and you see signs that the site is secure–either “https” (the “s” stands for secure) or a lock icon.
  • Connect to Bluetooth carefully. Bluetooth makes it easier for you to connect your phone with other devices. But, like other wireless connections, Bluetooth also can make it easier for thieves to steal your personal information. So, connect to Bluetooth in private, uncrowded areas only. Don’t forget to turn off Bluetooth when you are not using it.

Now you are ready to start using your new phone, right? Before you toss your old Smartphone,  remove all your personal information.  It’s important to protect your personal information from the moment you start using your phone until you get rid of it.

For additional information go to

http://www.ncpw.gov/blog/be-smart-about-your-phone

http://www.consumer.ftc.gov/articles/0272-how-keep-your-personal-information-secure

Teaching Suggestions

  • Ask students how they get rid of all the personal and financial information stored in their mobile devices.
  • Why is it important to use strong passwords with your mobile device, laptop, credit, bank, and other accounts?

Discussion Questions

  1. Why is it important to protect your personal information from the moment you start using your phone until you get rid of it?
  2. What steps should you take to remove personal information before discarding your mobile device?
Categories: Chapter 5, Identity Theft | Tags: , | Leave a comment

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