Identity Theft Dangers

Here are a few identity theft dangers that a credit freeze won't protect against:

  • Unauthorized use of an existing credit card. If you report fraud promptly, Visa or MasterCard(MA) issuers will remove the charges and it won't cost you a penny. (There are exceptions to this policy for business cards, and for cards issued outside the U.S.)
  • Unauthorized use of your debit card for purchases or to withdraw cash. A debit card simply doesn't have the same protections as a credit card. If someone has your debit card and PIN, and uses it to withdraw cash, you'll be fighting it out with your bank to prove that it was not really you who withdrew the money. Fraudulent purchases made with a Visa debit card are not protected -- unless the transaction happens to be transmitted over the Visa network, which is used by only 60% of merchants, and which is not apparent to the consumer when you punch in your PIN. Remember, your debit card gains access to not only the balance in your checking account, but to any line of credit you may have, as well.
  • Unauthorized use of your Social Security number. Establishing a credit freeze doesn't protect you from unauthorized use of your Social Security number, if the user doesn't open any new credit. Illegal aliens often use existing Social Security numbers, and employers who treat them as legitimate workers will make "contributions" on their behalf to your Social Security record. Check each year to make sure that reported earnings aren't more than you earned. An even worse-case scenario has involved unauthorized use of your Social Security number to refinance a house, rent an apartment in your name, etc. You can get your Social Security earnings statement securely online.
  • "Phishing" online scams. Amazingly, people still fall for scam emails pretending to be from your bank, brokerage firm or PayPal -- asking you to click on a link for a message of urgent importance from your financial institution. These authentic-looking messages trick thousands of people each month into "logging in" to their accounts at a fake site, thus exposing their account numbers and passwords to the thieves. Never click on a link! Instead, go directly to your bank's Web site to log in and receive any messages posted there.

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