Identity Fraud

I recently worked at a call center operating a fraud protection program. I initially thought the job would be interesting because it involved identity theft. The human resources worker described working with customers of a large bank that were victims of fraud.

As it so often turns out, that wasn’t the job. I was actually classified as a salesman, mainly because the lion’s share of calls we received were customers trying to cancel their enrollment. We had to convince people to remain enrolled by scaring them with stats or giving out freebies in order to maintain a certain save percentage to keep the client happy. I did enjoy helping the few people that called in and were victims of fraud, so I’m sharing what I learned about fraud and these protection programs that are being offered to a growing number of credit card holders

This is long so I’ll tell you now, the first part deals with types of fraud programs, the second part has to do with how ID theft works, and the last part deals with what you can do yourself.

Keep in mind, that the only sort of official on identity fraud is an FCRA (Fair Credit Reporting Act)certified person, or a police officer. My knowledge comes from training and working with victims.

There are three types of protection services.

The first is a very basic program that will likely come free of charge on a debit or credit card. These are fairly dangerous when you don’t pay attention. The reason being is that whoever gives you the card will probably tell you they monitor it for fraud. However this is only random monitoring, so your card number will float around in a queue with all the others and only really obvious or drastic changes in activity will be caught. They don’t all have strict policies about notifying you either, offering few if any benefits.

The second is a general fraud protection service which can be placed on a credit card. They offer continuous card monitoring and/or customized alerts that are suited to your spending habits. They also offer monetary and expert assistance should you be affected. These are monthly charges and can go from $6.00 up to $12.00. The reason you’re now paying is because they are always monitoring your card and offer some benefits.

For instance, Chase offers fraud alerts and can catch online purchases if you wish. Discover card also keeps a fairly close eye and will call to ask if you’re traveling if they see the card used outside its normal area.

The other kind of service is a credit monitoring service. Some will check your credit daily and others weekly and notify you of any inquiries or changes. They also offer monetary and expert assistance should anything happen.

One thing they have all begun to feature is that they provide assistance to you on all of your open accounts (other credit cards, bank accounts, even loans).

Of course to actually benefit from the programs something bad has to happen. And I am not going to say that ID fraud is just a big boogeyman type scam made up to scare you. It is a growing crime, the perpetrators are rarely caught, there’s an astounding amount of ways to go about it.

When choosing a service read the fine print (which applies to everything in life) though I’ve come to understand that most people assume they *know* what’s in the fine print.

Of all the calls I took only two people claimed they were canceling because they read the fine print and they both thought the program was stupid for the same reason. Why’d the cancel? The reimbursement coverage is a big fat juicy carrot in front of a staving donkey. A threatining statistic is that it could cost you anywhere from $4,000 to $16,000 in out of pocket expenses trying to combat fraud. The program of course offers reimbursement for all of those expenses, if you’ve read the fine print you’ll see the words “qualified expenses” which means (harshly) if anything should happen, you probably won’t qualify for the coverage and if you do you’ll be jumping through hoops to get it.

This is where the variety of fraud is a blessing for these programs. Did someone steal your checkbook, did someone use your credit card number to buy shoes, or did someone take on your complete identity, open up three new credit cards, and take out a five thousand dollar loan, leading to creditors calling you everyday, and maybe even the police are looking for you because you skipped a court date after being charged with possession of methamphetamine with intent to sell. Only one of the preceding will likely qualify you for the coverage.

If your checkbook has been stolen and you’re seeking assistance you’ll get nearly nothing, a three bureau/ four score report from the program I worked for to check if anything else happened but that’s about it.

In the instance of complete identity theft with massive fraud, the program can be good, you can use it to pay for a lawyer and cover any lost wages. The expenses for the lawyers have to be approved though, and don’t plan on taking a vacation just because lost wages are reimbursed.

Now here are some scripted stats and these can vary depend on who you are talking to
-Did you know Identity fraud has grown at 500% over the past three years?
-9 million people were affected last year alone.
-Two years to find out you’ve been a victim.
-It can take anywhere from $4,000 to $16,000 in out of pocket expenses to fight fraud.
-Another two years could pass before your credit rating is fixed.

What do the stats mean?

They basically mean that identity fraud is the fastest growing white collar crime and almost everyone gets away with it.

Depending on how you define identity fraud as many as 9 million were affected last year. It can be anything from a stolen check or credit card purchase to someone else walking around out there posing as you.

It can take a long time to find out you’ve been a victim because of the tricks criminals pull. Some will change your address and open a new account. If you don’t check your credit report often you won’t see it. So a credit card bill under your name could be going to another address across the country, and the thief might even make minimum payments on it until they can rack up all the debt possible.

If you need to hire a lawyer and stop going to work to fight the fraud then it could cost thousands of dollars.

Here’s a final list of things to consider about these programs and what you can do yourself to avoid fraud.

1. Don’t think you’re invincible because of the precautions you already take, sometimes it is out of your hands.

A customer told me- “I don’t have to worry about fraud because I only have this one card and it’s always in my back pocket.”

Reality- the VP of your health insurance company has a lot of work to get done but also has a business dinner in an hour. The VP figures he’ll take his laptop with him. He leaves it in the front seat of his car in a dark lot behind the restaurant. Someone steals it and a week later you get a call saying a computer had been stolen and your address, phone number, social security number, and various other personal info is at risk. (Happens every single day, just think about the amount of places that have your personal information from doctor’s offices to places you’ve worked)

Not to mention that particular customer hasn’t thought about falling prey to phishing scams, pick-pockets, a dumpster-diver, or someone swiping his mail.

Currently, stealing a business computer can be far more profitable and easier to get away with than robbing a bank.

2. Protect yourself. Look at your credit report. By federal law, you can see one for free every year. You can also weasel one from a credit bureau but be careful about being pulled into a program with a monthly charge. The bureaus recommend you check it every quarter, of course that’s because it gets them the most money. Twice a year should be ok unless you associate with a lot of shady people and businesses. Also, contrary to popular belief, pulling your credit report does not lower your credit rating. It is called a soft hit because you’re not inquiring about a new line of credit. (A long time ago it may have been true, but not anymore)

The credit bureaus are infamously hard to work with, so most programs offer case managers and experts to handle the bureaus for you, but one thing you can consider is placing locks on your credit report which will keep anyone from making an inquiry on your history.

Benefits of the programs include free credit reports or at least discounted ones.

Also, each bureau has different data on you. A comprehensive report will tell you everything as well as give you an average score. On the other hand, I recently received a one bureau report from Experian and noticed my score was fairly high due to the fact that inquiries I had made went through Transunion and the two didn’t share that bit.

Be on guard. Is someone watching you enter a pin closely? ATM’s have been fooled by pieces of plastic with magnetic strips on them. Have you received an email or phone call about fraud on one of your accounts, do they even provide the last four digits of your account and give a number to call back if it is a message? Delete the email and hang up. Pull out an old statement or your card and call the customer service number to see if they actually did call.

3. You have to help yourself. Filing a police report is probably the number one piece of advice if you ever discover you’ve been a victim, it factors heavily into creditor’s decisions on whether to hold you liable for fraudulent charges.

If you don’t file a police report don’t be surprised when a creditor thinks that since they already found you (remember only 2% of thieves are caught) they might as well hold you liable instead of looking for the real culprits.

Also, be prepared for paperwork and plenty of phone calls, especially if you’re going after reimbursements for qualified expenses offered in the programs.


4. Know what your program does. Read the information yourself. I worked for a company that was working for a company that was working for a company, and every other day we received a list of things that we were misinforming customers about or shouldn’t be telling them at all. On top of that, customers were getting information from pushy telemarketers notorious for enrolling people without consent and customer service reps who were the last in line to get new information about what the program offers.

Some people called us so we could handle their disputes with other businesses, which we could if they were actually fraudulently drawing from an account, but it’s usually just a case of one party claiming the other stills owes money.

Other people liked hearing that we cover all of their open accounts and then call six months later upset that we didn’t catch a fraudulent purchase on their Amex or Discover card.

Well, to all who don’t know, credit card companies don’t share their customer’s cc numbers with each other. Discover card monitors Discover cards, Chase monitors their cards, and so on.

Everyone places a different value on these programs. Some people think they are a stupid waste of money and they may be right. Other people are fascinated by them and think some of the features are remarkable and will happily pay the monthly charges for the piece of mind it gives. The bottom line is a pushy telemarketer shouldn’t enroll you, and statistics shouldn’t scare you into them. You should weigh your habits, lifestyle, and financial situation and make the decision. Maybe a program could protect you, but maybe, by being cautious and holding yourself responsible you could avoid putting yourself at risk.