Cyber Monday sales in 2013 hit an all-time high, with consumers spending 20.6 percent more than in 2012, according to IBM. Unfortunately, cyber thieves are cashing in on this holiday shopping as well by preying on distracted shoppers. Norton’s Cybercrime index reached a near-record level of 121 the week after Thanksgiving, with spam comprising 56 percent of all email sent. Norton reports that almost 90 percent of identity theft stems from hacking, often in the form of phishing email and website links that impersonate legitimate retailers. Such attacks have far-reaching impact on victims, with immediate losses compounded by long-term credit problems. To protect yourself, be aware of the risks and know what you can do to make your holiday shopping safer.
Beware Your Balances
Identity thieves usually run up large balances on your accounts before you even notice. You can be held liable for these purchases, and it reduces your available line of credit, draining your own ability to purchase items.
To prevent this, the Identity Theft Resource Center recommends doing online shopping with a special, dedicated credit card rather than using your regular credit card or a debit card. This limits the amount a thief can purchase on your account, protects your other cards and accounts and reduces your liability. Under the Fair Credit Billing Act, you can dispute unauthorized purchases and withhold payments pending an investigation. If investigators determine your card was used fraudulently, you are only liable for the first $50. Your debit card does not necessarily provide such protection and you’ll be left with a possible empty account while you haggle with your bank on who took the money when.
Monitor Your Accounts
Identity theft also harms your credit rating by causing late payments. If a thief uses your account to open new accounts, you may face extra payments. To avoid this, as soon as you notice fraudulent activity, you should immediately contact your credit card company in writing to cancel any compromised accounts. You should also contact the three major credit bureaus (Experian, Equifax and TransUnion), the Federal Trade Commission, the police and other creditors to alert them. Finally, monitor your credit report closely to follow up.
We have all the details on what do on our identity theft recovery page…
Meanwhile, as you’re getting things sorted out, you might find yourself needing some quick cash to avoid late payments. In that case, you might use emergency savings, borrow from family and friends, or maybe call those JG Wentworth guys with the crazy commercials if you have a some kind of structured settlement.
Review Your Credit Report
Identity theft can further damage your credit by attracting suspicion as thieves go around opening accounts and making purchases in your name. This creates credit inquiry records on your credit report known as “hard inquiries.” Excessive hard inquiries give you the appearance of shopping for credit, making creditors suspicious that you lack funds. Check your credit report periodically or subscribe to a credit monitoring service that will alert you to hard inquiries, so you can have fraudulent ones removed from your records.
That’s it! I’m sure the 2014 will be even crazier with even more online purchases and more threat of fraud and identity theft. Just the way it is.