Identity Theft Continues to Be a Big Problem

It doesn't look like the number of instances of identity theft is going to go down any time soon. No matter how careful we are with our personal information, creative identity thieves can still get their hands on our data. From "skimmers" held by restaurant employees, to unscrupulous customer service personnel, to computer hackers... all sorts of people have quick access to our account numbers and private data.

Nancy Trejos, a personal finance columnist for the Washington Post recently had her identity stolen and her debit card and bank account compromised. She was lucky because her bank called her while someone was trying to buy over $800 of shoes with her debit card number. The sales clerk became suspicious when a woman came to pick up the merchandise that had been ordered with the card number (including the security code on the back!), but couldn't produce the actual card. A call to the credit card company prompted their call to Trejos, and then the fun began.

Trejos was in an unusual position because she had given up her credit card in favor of a debit card. She was hoping to become debt free by avoiding the use of credit cards, but now her troubles could easily multiply because of that debit card. She used it frequently, and now realized that each time we use a debit or credit card we’re putting our accounts at risk.

And the damage from a stolen debit card number can often be much worse than from the theft of a credit card. Why? Credit cards generally protect you against fraudulent charges, and you just don't pay them while the credit card company is investigating. In contrast, a debit card takes the money out of your bank account right away... doing immediate damage. Consumers may have to wait weeks or months to get their money back, suffering potential financial consequences in the meantime.

Trejos did the best that she could to mitigate the damage. She called one of the credit bureaus to put a "fraud alert" on her records. That bureau automatically notifies the other two big credit bureaus so they can flag their records too.

She immediately cancelled her debit card and had a new one issued. Trejos also reported her situation to the FTC and the police. While most often police don't want to investigate cases like this, the police did look into the writer's case. And they're close to charging someone with a crime.

These days we're all at risk for identity theft, no matter how careful we are. Keep close watch on your accounts and make sure that your bank and credit cards have your current contact information so they can call you or get in touch with you if they suspect fraud on your account. While these calls may seem like a nuisance, they're a necessary part of curbing the fraud risk.