A GENERATION ago, most families didn’t think about financial fraud. Today, it can come in many forms – over the phone, through the mail and, increasingly, online. It’s an equal-opportunity crime that affects consumers of all ages.
For the 15th straight year, the federal trade commission tapped identity theft as the number-one source of consumer complaints in its 2014 Consumer Sentinel Network Data Book, which was released in February. The agency also noted a “large increase” in so-called “imposter” scams – phone calls and e-mails from thieves purporting to represent the government as a way to steal data and money from unsuspecting adults.
Young people – particularly students – could be the fastest-growing group of fraud targets. According to a 2015 study by Javelin Strategy & Research, they could be the greatest potential victims of financial fraud because of their dependence and sometimes unwitting use of computers and mobile devices.
More than 64 per cent of the study’s respondents said they were not “very concerned” about identity fraud but were far more likely to find out they had been fraud victims long after the damage occurred through measures such as a call from a debt collector or a rejection letter from a lender.
Most consumers under the age of 18 shouldn’t have a credit record at all but, as digital thieves become more sophisticated and federal agencies become occasionally vulnerable to hackers, critical privacy data could be at risk years before a child ever opens a bank account or applies for a loan. Such data includes social-security numbers, which many parents obtain for their children in infancy so they can save or invest money for them or buy insurance on their behalf.
For all these reasons, it might be time to think about a family fraud plan. Here are some steps to consider:
• Check the accuracy of all family credit data. Parents should begin by checking their own credit reports to make sure creditor data and loan balances are accurate and that no inaccuracies or unfamiliar lenders have crept into their information. Once clear, adult children can make sure senior relatives are taking similar steps. As for minors, the three major credit agencies – TransUnion, Equifax and Experian – have their own website guidelines for confirming and evaluating a minor’s credit data.
• Make sure mailboxes are safe from thieves and any document with an account number or identifying data is destroyed before it is placed in the trash. The same goes for tax returns that are no longer needed.
• Learn how to protect all mobile-computer and handheld-device data and have a plan in place in case any family member loses a smartphone, tablet, laptop or desktop computer. Tips are available online from smartphone service providers and device manufacturers.
• Online, by phone and in person, be wary of collection demands or requests for social-security numbers or other specific account data unless the identity of the caller can be verified. Fraudulent calls are called “vishing” scams as they are similar to “phishing”, which involves fraudulent e-mails, texts and websites used to illegally collect personal data.
• Install all software security updates immediately on your mobile devices and computers and ensure your passwords are unique and frequently updated.
• Sign up for fraud alerts from your banks, credit-card issuers and investment companies to receive immediate word of unusual or potentially illegal activity on your accounts.
Bottom line: Identity thieves and other financial fraudsters watch consumer behavior closely and are equally adept at stealing money and data in person, over the phone and online, so have a plan in place to protect your entire family.
Nathaniel Sillin directs Visa’s Practical Money Skills For Life financial education programs. Follow him on Twitter at twitter.com/PracticalMoney. His articles are intended to provide general information and should not be considered legal, tax or financial advice. Always consult a tax or financial adviser for information on how the law applies to your individual financial circumstances.