Identity theft can seriously disrupt the lives of its victims. Essentially, it is characterized by one stealing the identity of another for the purpose of using the victim’s credit information and finances for ill-gotten gain. Thieves are sometimes able to ruin a person’s credit and drain a checking and savings account before a victim even knows that their security has been compromised. To prevent this from happening, there are a few things that every person can do.

Tips for preventing identity theft

Information storage. Do not store personal financial and identifying information on a computer. Social security numbers, identification numbers, bank account numbers, passwords, password reminders and other log in information is what identity thieves are after. Keep this information safely stored elsewhere, but do not store it on a computer that can be hacked into.

Virus-protection software. Keep all personal and work computers adequately protected with . Some computer viruses are specifically designed for identity theft and may harvest personal information, such as social security numbers and bank account numbers, from an unprotected computer. To avoid this, virus-protection software should not only be installed on all computers used, but also updated regularly.

Firewalls. Install a good firewall program, which will prevent thieves from accessing any information stored on a computer.

Hyperlinks. Do not click on hyperlinks unless it is from a trusted source. Identity thieves are notorious for sending special offers by email that require a recipient to click on a link for more information or to make a purchase. Unfortunately, these links are often used to expose the computer to a virus or some sort of program that harvests personal financial information from a person’s computer.

Trusted sources. When making a purchase, applying for a personal loan or performing other financial transactions online, always be sure that the site is a trusted source. Never follow a link from an email to make a purchase or apply for a cash advance, even if the link looks like it is from a source that would ordinarily be trusted. Instead, take the time to type the store or lender’s URL into the browser’s address bar directly.

Safe Browsers. Only make purchases or perform financial transactions on the Internet when using a safe browser that will scramble or otherwise encrypt all of the date you send online. Also, look for a tiny padlock symbol at the bottom of web pages asking for personal or financial information. This lock means that the site has been deemed secure. If you do not see it, do not proceed with your transaction.

Computer-servicing precautions. Be careful when sending your computer out for servicing. It cannot be repeated enough times not to store personal financial information on a computer. However, if you do, be very careful as to whom you allow to service your computer, as the technician will easily be able to access this information, as well as other private photographs and information.

Selling precautions. When selling a used computer or even if you are just throwing one away, always delete any personal information that was previously stored on it. Special wipe programs exist, which can help delete this information. Be advised that simply erasing the information by hand is not recommended as deleted information still remains on a computer’s hard-drive.

Keeping up in a dangerous game of cat and mouse

Overall, shopping online, applying for an Internet loan and handling other financial transactions by computer are all relatively safe if the tips described above are regularly implemented. There is no guarantee that identity theft will never happen to an individual, as thieves are always inventing new and resourceful ways of stealing information. However, making an effort to stay up to date on these tips and others, as they become available, can save a lot of money and heartache.

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Millie Benger, 73, of Toledo, Ohio, needed to take out installment loans to help her stranded granddaughter. She received a call in the middle of the night. The caller claimed to be her granddaughter and said her car broke down in Montreal. The solution? She requested that Benger Western Union her $4,000 so she could get home safe.

Benger used a combination of quick loans to come up with the funds. When she went to her local Western Union office, she luckily ran into some opposition. A particularly shrewd Western Union agent started asking questions. First of all, Montreal is known to have a reputation for fraud. When the agent asked if her granddaughter had any credit cards, Benger recalled that the woman on the phone said her card wasn’t accepted in Montreal. The agent asked more questions and Benger realized she had most likely been duped.

Using Western Union to Wire money

More and more thieves are using Western Union and an elderly target to make money. In fact, it’s estimated that the “grandparents scam” has already taken the elderly for more than $3.5 million nationwide. It’s a scam where a fake grandson or daughter calls an unsuspecting and concerned grandparent and asks for emergency money. The amount could be small, or it could be a large chunk of money. The scammers normally say that their credit cards aren’t accepted in the country they are visiting, and they usually fail to give their name. A worried grandparent does everything they can to find the money quickly.

The “grandparents scam” is a routine

The way thieves dupe the elderly with the “grandparents scam” is pretty routine. Here are the warning signs:

• A distressed young person calls in the middle of the night
• He/she has an emergency that needs immediate funds
• They rarely are forthcoming with their name, but rely on the elderly, who out of hasty concern, divulge their relative’s name first
• They suggest Western Union for immediate funds — they have an “emergency” after all!
• The grandparent looks for immediate solutions like installment loans, savings or credit to provide the cash

If you or a loved one are the victim, be smart. Ask questions. Sergeant Carl Pouley, detective for the Middleton, Ariz., police department, said, “It’s pretty easy to take a thief off guard because they have a routine. If their scam is up, they quickly move to another person. …Asking for the name of a pet or childhood toy is not unheard of. Most likely your crook will give up.” Pouley added that most of these scammers have “hundreds of names” to get through daily and if they think you are onto them, they will end the call pretty quickly.

Protect yourself against thievery

People need to be wise. Rather than getting emotional and distressed when a loved one calls, the elderly are cautioned to be calm and think rationally. Would loved ones really turn to their grandparents for emergency funding via savings, credit or installment loans? Most likely a grandchild in distress would first turn to parents and friends for aid. Sergeant Pouley added, “Grandparents these days are on fixed incomes so the likelihood of asking them for cash just isn’t that great.”

Apply here for Installment Loans

Phishing, pharming, spoofing, smishing —what do all these words mean? Each one has to do with online hackers and your personal information. Almost everyone today who does anything online has had some experience with unscrupulous companies or people. Phishing for example is when you get an email that looks like it’s coming from your bank or PayPal or EBay, but is actually a fake. It instructs you to click on a provided link to “confirm” your information. The link is phony and will take you to a website that collects your personal information and allows thieves access to your account.

Different words, same result

Then there’s pharming, also known as spoofing, where hackers redirect legitimate online traffic to their own website, and smishing, where criminals use cell phone text messages to get you to divulge your personal information.  Regardless of the name, each one of the above are things hackers use to steal your personal information. They may use the information themselves by trying to withdraw money from your account, or they may sell it to a third-party, black-market company. Either way, you’ll have some trouble fixing the problem once your information is compromised.

Hackers are getting smarter

Some people think they can outsmart hackers by eliminating the computer from their daily bill payment method. Sure this may cut out some of the above tactics, but rest assured there are others. Hackers spend hours devising ways of stealing information. They also use vishing, or “voice phishing,” to leave you automated phone messages from fake banks or credit card companies. The message will ask you to confirm your information in order to get details about where you are keep your money.
There’s also bank-card skimming where thieves actually put bogus ATM machines. When you enter your card, your information is captured and when you enter your pin, they have that too. A simple portable card reader does the trick and can leave you vulnerable to theft.

Not to spread alarm, but . . .

The solution is not to stop answering phone calls or get rid of your credit cards. Phones and credit cards are modern necessities. But the reality is that you have to protect yourself. Here are some basic tips to remember about identity theft:

• Order your credit report yearly. You are allowed one free report every year from Equifax, Experian, and TransUnion. Get them, review them, and make sure everything is accurate, including account numbers and balances, your name, and addresses.
• Never give your personal information to anyone over the phone or online. Remember that your bank, PayPal, EBay and your credit card company already have your personal information. There is no reason for them to request it again.
• If you are self-employed, do business on your own computer and never a public one. Even after you sign out, you may leave valuable information on a public computer. Wireless connections are also more dangerous when dealing with business issues.
• Protect yourself when you are at an ATM. Don’t be afraid to let someone go before you if you think they are standing too close. Also, be sure to never keep your PIN near your card. There’s a reason why banks tell you to pick a number you can easily remember.
• Use the paperless option when it comes to your bank statement. Thieves will go through your mail and garbage to get your information. Handling transactions online leaves no physical record for anyone to steal.

Keep your guard up

These are just some of the ways you can protect your identity and your finances from hackers and thieves. Be vigilant and careful with your information. Theft in general and identity theft in particular, can be difficult to sort out when it happens to you.

Using credit cards can be a pleasure and a pain. Will anonymous credit cards make security one less thing to worry about? (Photo: flickr.com)

Credit cards are both a blessing and a curse for millions of people worldwide. Managed use of this form of consumer credit can help build one’s credit score and provide a convenient means through which to transact with merchants who require a credit card in order for a consumer to secure services (automobile rentals, hotel rooms, etc). The key to managing one’s credit card usage, however, is a something that many consumers do not practice: paying off the balance each month. By making only the minimum payment, credit card debt grows significantly as interest is compounded. Revolving lines of credit like credit cards can saddle a consumer with a lifetime of debt.

Then There’s Identity Theft

Use of credit cards can expose consumers to the nightmare of identity theft. Whenever you pay a restaurant bill with your card, you’re exposing yourself to risk if the server is less than honest with your sensitive information. If you’re shopping online at a site with less than industrial-strength security, great potential for an information leak is there. Giving your credit number over any form of telephone connection is highly problematic as well.

Such scenarios of financial pain and horror might cause you to wonder how you can keep yourself from becoming a victim. One answer is to use payday loans rather than credit cards in emergency situations where you need quick cash, as the process does not generally expose you to potential identity theft. However, having a small number of credit cards can be beneficial to your FICO score (indicating diversity in your credit portfolio, which creditors like to see), so perhaps a better long-term answer would be how to make credit card usage less dangerous.

Make it Anonymous, Perhaps?

Elli Androulaki and Steven Bellovin of Columbia University recently published a study entitled “An Anonymous Credit Card System” which proposes a system that could serve as a solution to this problem with credit cards. Consumers would be able to kept close track of their credit card usage while banks would be able to justify the payments it makes to merchants through an anonymous E-cash system.

An Anonymity Barrier

One of the benefits consumers enjoy when using credit cards is that logs of transactions are readily accessible. In addition to convenience, this provides a level of security in that consumers can challenge erroneous charges. However, such logs can be a double-edged sword in that banks can (and often do) sell that consumer profile information to third parties. What the study authors propose is a system that maintains the benefits while at the same time protecting consumer and bank privacy through a barrier of anonymity. For consumers, however, the anonymity system express is conditional in that the consumer must make honest attempts to keep up with payments. If an overspending transaction occurs, the consumer is blacklisted from the anonymous service.

For online retail, truly anonymous credit cards would prevent any unauthorized outsider from acquiring information about a transaction or those involved in the transaction. Androulaki and Bellovin stress that banks would not be able to create profiles that they sell without the cardholder’s permission. In order to achieve this level of privacy and security, the authors have created a theoretical system whose high points will be discussed here.

The Dawn of Credit Card Security

According to previous studies of credit cards and state-of-the-art security methods, measures have existed since at least 1994, but such schemes have involved extraneous trusted parties to maintain security. Furthermore, previous credit card protection schemes offered no expense reports or means of error correction for consumers. Using E-cash as a money substitute that cannot be copied or spent more than one time has furthered security schemes, but it requires prepayment to function and works only for online transactions. It also provides no avenue for error correction or clear listing of transactions. Prepaid debit cards are limited in their security application for similar reasons.

What the authors propose is a system that combines an E-cash system for making payments and a combination of “blind and plain digital signatures” for other operations. Consumers, merchants, card-issuing banks, acquiring banks (institutions merchants are authorized to receive payments through) and credit card associations (Visa, MasterCard and others who set transaction rules between the different bank types named here) would all be served by this system. Credit cards under the new system, write the authors, “should not be forgeable or usable by any third party. It should be possible for cardholders to track their transactions (Expense Report Service) and provide an undeniable proof of any mischarge (Error Correction Service) without endangering their privacy.”

How E-cash works

There are two types of E-cash used in this system, drawn from “wallets.” One is accessed by the consumer while the other is where merchants deposit E-cash received from the consumer. Blind signature schemes are used to ensure that merchants get paid and consumer identities are protected from third parties. If set limits are exceeded, conditional anonymity of the consumer is revoked – an added incentive to make payments, which appeases the banking establishment. For the most part, merchants and consumers are identified only by signature keys when they open their E-cash accounts with their banks. In order for consumers to access their E-cash credit cards, they create an anonymous pass code. Backups, multiple layers of encryption and loss recovery systems are present here, as are timestamps for online transactions; consult the study for a more detailed account. It is interesting to note that encryption is performed by the consumer during the anonymous credit card origination process, via secure home software. Thus, a home computer would be required.

How are Anonymous Credit Cards Paid?

Obviously a consumer honor system would be inappropriate, so the consumer is required to report the amount of money spend each month to the card-issuing bank. Regular backups and reporting are required to protect both banks and consumers. Spending is proven through receipts. The card-issuing bank then computes the consumer’s monthly payment through the same formula used today for standard credit cards.

How Does Error Correction Work?

The consumer has the right to contact their credit card association in the event of an error or fraudulent use. In the event of a error, a receipt is required in order for a correction to be made. When the merchant makes the correction and gives back funds via E-cash, the currency passes the refund to the credit card association, who in turn moves it to the merchant’s acquiring bank. It is the acquiring bank who finally moves the funds back to the consumer’s card-issuing bank. If fraudulent charges require purchase cancellation, the exchange is handled in a similar fashion.

Breaching the Veil of Anonymity

As mentioned previously, consumer anonymity is dropped if credit cards are charged over their limit. In that instance, all E-coins withdrawn by the consumer are traced. The authors mark this as necessary for loss recovery. But seeing as how a cardholder may open as many anonymous accounts as desired, being able to achieve transaction linkage is possible.

Buying into the Checks and Balances

The anonymous credit card system proposed by the study authors could eliminate identity theft altogether (until someone figures out how to introduce decryption technologies in the middle of the process). That could occur, but the system proposed could be the best current option for safe credit card use.

I find it interesting that the proposed system would require consumers to hang on to their receipts. It’s something consumer groups and banks (not to mention mom and dad) always advise us to do, but how often do we practice what they preach? If you’re a conscientious consumer who already keeps track of such things, your adjustment to such an anonymous credit card system would likely be painless. For those of us who are forced to become more accountable, the transition would be more difficult. However, it is a much safer financial road to travel. It is also a responsible road. Sure, payday loans are still be more desirable in situations where carrying a balance over from month to month becomes too expensive, but credit cards will still have their place. The layers of checks and balances that preserve security may sound inefficient to some, but remember that the financial world rarely gives us something for nothing. This isn’t trading freedom for protection, in my opinion.

IRS building. Image from Flikr.com.

If you have gotten a “notice of unreported income e-mail,” delete it and do nothing else. And if you do get a notice of unreported income e-mail or any e-mail from the IRS that asks for a response in the future, do not respond.

Don’t panic if you’ve gotten a notice of unreported income e-mail and opened it. Replying is the part that will get you in trouble. It’s a phishing scam from someone who is trying to get your IRS login ID and password, so just don’t respond. Giving out your password online is the first step toward identity theft, and you don’t want some scammer taking out online cash loans in your name and running off with the money.

IRS does not use e-mail

OK, so the IRS does use e-mail, but not for getting personal information from you. Any transfer of personal information between you and the IRS online will happen via your online IRS account, which you must log in to, using your password.

Don’t e-mail your IRS login information and password to anyone. The IRS will never ask you to do this. In fact, this is a good rule of thumb for any password you want to keep a secret: don’t put it in an e-mail.

Why would someone do this?

If the phishers are successful at getting your IRS login information, they will be able to attempt to change your tax filing to show that you are owed a tax refund. Of course, they will arrange for the tax return to be sent to them, not you.

Once the IRS catches the mistake, you will have to pay back the money. Even though it was the person who stole your identity and not you who ended up with the cash, you will be held responsible. And you don’t want to be on the IRS’s bad side.

Same old story

This “notice of unreported income e-mail” isn’t the first time scammers have tried to get people’s tax information. Back in 2005 some scammers started an e-mail campaign, saying they were the IRS, asking for taxpayers to give their social security number and credit card information.

The IRS will never need your credit card information. If you choose to put taxes owed on a credit card, you can do so. But the IRS will never solicit your credit card information from you. Also, never give out your social security number unless you are absolutely positively certain you know where it’s going and who you’re giving it to. Don’t e-mail your social security number to someone you don’t know.

Avoid IRS e-mail scams

The most important thing to remember is that the IRS does not send unsolicited e-mails. That means that the only time the IRS will ever e-mail you is when you e-mail them first and they respond. If you are going to get an e-mail alert informing you that your taxes have been filed or that your refund has been deposited into your account, you will be warned in advance when you file your taxes.

In the case of e-mail alerts, the IRS will not ask you to respond, and in fact you can’t respond. The IRS won’t ever ask you for personal information in an e-mail, and they will not communicate with you by e-mail unless you request it. So don’t get scammed by the “notice of unreported income e-mail” or any other IRS scams!

Here’s some topical insurance news and it grows out of the fear of identity fraud. This ever increasing scam has given the banks and credit card companies the perfect selling opportunity: ID theft insurance. This type of protection may be the ultimate peace of mind insurance policy.

The worse the economic crisis becomes, the more crime emerges on the streets. Many people are worrying about ID theft in these troubled times. It is cited as the main worry for those aged over 65. If you become a victim of ID theft, there’s no question it could be a very serious problem indeed. Fraudsters can obtain your personal information and identity without your knowledge, and then use it to open bank accounts or apply for credit in your name.

Clearing up the mess after your ID has been stolen and correcting your credit record can be a complex, time-consuming process. So, wouldn’t it be sensible to insure against it? Apply for Payday Cash Advance Loans right now and attend to this insurance matter so you can continue thinking without worrying.

How they get you

Use of stolen credit card and debit card numbers is among the most common forms of identity theft. Some schemes use electronic means, including online scams like “phishing,” while others might use more old-fashioned methods, such as “dumpster diving”- rooting around in people’s garbage to collect financial information.

The advent of the new, “no-swipe” credit cards that transmit account and user information through radio frequency identification may make it possible, in some cases, for identity thieves to use a simple electronic device to capture the information.

Tips for Avoiding Identity Theft

• Keep the amount of personal information in your purse or wallet to the bare minimum.
• Avoid carrying additional credit cards, your social security card or passport.
• Guard your credit card when making purchases.
• Always take credit card or ATM receipts.
• Don’t give out personal information on the phone, through the mail or over the Internet unless you have a secure line.
• Proceed with caution when shopping online.
• Do not fall for online or email scams. Be wary if you receive email solicitations for personal information.
• Monitor your accounts.
• Don’t rely on your credit card company or bank to alert you of suspicious activity. Check your bank and credit card statements.
• Order a copy of your credit report from each of the three major credit bureaus. A new law that took effect December 1, 2004, entitles you to one free credit report per year. Your credit report contains information on where you work and live, the credit accounts that have been opened in your name, how you pay your bills and whether you’ve been sued, arrested or filed for bankruptcy.
• Place passwords on your credit card, bank and phone accounts. Avoid using easily available information like your mother’s maiden name, your birth date, any part of your Social Security number or phone number, or any series of consecutive numbers. If you suspect a problem with your credit card, change your password.
• Shred any documents containing personal information such as credit card numbers, bank statements, charge receipts or credit card applications, before disposing of them.

We have all heard the expression “the cashless society” and by now we all know that where there’s smoke, there’s a fire somewhere. We are also all finding out exactly how powerful the influence of the internet is and at last we are learning that every household must have a computer, no matter how much the residents resist it.

Progress

But this is progress. This is how we humans adapt ourselves and move along with the times. Here’s a quick example. Remember Amazon.com, the online bookstore that we older folks pooh-poohed and sneered at as we said, “It’ll never work. People like to browse and touch and feel the book they are going to buy”? Well, Amazon reported recently that it sold 73 items a second. No touching and feeling in there, right? Not even time for a quick sniff! Want more proof of the way things are going? EBay, the online auction site, is stated to have the 26th-largest economy in the world.

Staggering numbers, huh? Well, here’s another one. The incidence of online fraud is going into orbit.

Credit card fraud

All these examples I am firing at you are internet generated. And when it comes to internet transactions, credit card fraud is a major concern. This is what is leading the rush to a cashless society and the introduction of virtual currencies.

Paypal is an internet money transfer system which sends funds up and down using a combination of a credit card or checking account number and an email address. Anyone who uses PayPal will tell you that the system is smooth and efficient. They will also tell you that PayPal loves it because they basically watch what is happening and get a commission on every payment.

Here’s another one

Ukash is a newer entrant to the world of online commerce and it works differently. The website explains: “Ukash is delivered as a ready-to-spend PIN code, which can be used to pay directly at one of the thousands of Ukash friendly websites. You get it by converting your cash at any one of the 275,000 global locations and, soon, via online bank transfer.”

Basically if you want to spend money or transfer money or send your nephew a gift, you simply go into a store that sells Ukash vouchers, and buy “virtual currency”, then you go to your computer and send that virtual currency to where you want it to go. You can do it through your cell phone. No names, no addresses and best of all, no income tax reference numbers!

There’s no cost to purchasing Ukash vouchers. And because you don’t use a credit card, there’s no risk of imaginative hackers stealing from you. It also means that people without credit cards can shop online – good news for people in developing countries that don’t have high credit card penetration.

And many others

There are dozens of money transfer systems operating on the internet, some restricted to certain countries or continents and some universal. Most of them were developed in defense of fraud.

What’s next?

Most companies will have to upgrade its money transfer systems in the ongoing fight against fraudulent operators, those vultures circling overhead and waiting for some innocent to walk out into the street clutching money in his hands. It looks like we’re heading to that cashless society.