Titan Money Matters: Banking on your ID

In Columns, Opinion

Banks love to up-sell their customers. Each bank operates under the mantra that the more products a customer has, the more satisfied the customer must be.

Interactions with tellers will inevitably lead to a half-hearted attempt to offer the latest and greatest product created to give you “peace of mind” and “security in your banking” — phrases which I was suggested to use when selling to customers at a call center I worked at.

The offering is either a hit or a miss because the salesperson recommends a product the customer doesn’t have, usually a savings account or credit card. But among the most useless offerings a bank could persuade a customer to purchase is identity theft protection.

The banks aren’t alone in their quest to protect your identity. Protecting against fraudulent activity on your account and credit history is a booming industry, and much like life insurance, it’s all a big scheme to squeeze money from you monthly.

When you purchase ID theft protection, you typically pay a service fee. The fees can range from $12 (as was the case at the bank I worked at) to $25, depending on the level of “protection” you get.

No matter the level of protection you pay for, these services are all retroactive. If fraudulent activity does appear on your accounts, it’s already happened and the deed is done. Your only course of action is to contact your bank, credit card company or a credit-rating bureau to fix what has transpired.

I recall many conversations with irate customers asking why the bank would even allow “suspicious activity” to be processed. The response I was encouraged to give? The bank would prefer to approve a transaction based on the chance that you might really be filling up your tank in Mobile, Ala., even though you’ve never traveled outside California in your life.

When you think about it, the policy does make some sense. How angry would you be if your card was declined on your weekend trip to Vegas because the transactions were different from your normal spending patterns?

And yes, the banks monitor your purchases.

So if your ID theft protection won’t prevent fraud, what does it do? Besides debiting your account every month, the issuer of protection will provide you a free copy of your credit report.

What they conveniently forget to mention is the fact that a copy of your credit history is available to you for free every year.

You may request a copy for yourself from the three rating agencies each year, at no cost. Even the path to getting the free copy is riddled with advertisements for ID theft protection, so be cautious where you click.

The only trustworthy source to get ahold of the report is from AnnualCreditReport.com, and you will not need to purchase any monthly services to receive it.
In the event that you do find fraudulent activity on your accounts, you may get a quick fix from your bank or the process could be drawn out over several weeks, depending on the severity of the fraud.

At the call center, when a customer reported a fraudulent transaction, the amount was automatically reimbursed if it was less than $25 and a result of a check card swipe. If the amount was greater, an investigation would have been required, but the turnaround to a resolution was fairly fast. In fact, by law the banks must investigate a fraud claim within 10 business days. Whether or not you get the resolution you were looking for is another story.

Transactions which involve the actual account number are a different matter. Your personal information has been compromised and it’s time for a new account number. This process takes time, especially if you have a lot of automatic debits leaving your account monthly, like insurance or gym dues.

The most inconvenient of all identity theft scenarios is one which involves a credit account being opened under your name. In this case, the ID theft protection could be useful; you would be alerted to new accounts opened under your name within 30 days.

However, the damage is done at that point. And depending on how fast the account was opened, you could see astronomical balances racked up by a thief on a shopping spree under your name.

Without a credit monitoring service, it is possible that an account could be open and active for months before you know it, all the while your credit score is taking the hit.

What proactive measures can you take to prevent fraudulent accounts?

First, you’ll need to know what the trifecta is.

The combination of your birth date, Social Security number and home address is the holy grail of numbers identity thieves seek to obtain. With those three numbers, or even a combination of the two, a fraudster could wreak havoc on your credit.

Keep your Social Security card in a safe, hidden place; you rarely need the card itself anyway, just the numbers. Also, be reluctant to provide your full Social Security number to anyone.

Most companies use the last four digits to verify your identity, and sometimes you’ll be asked to confirm the last six, but never should you be asked to provide your full number.

You should also be weary of speaking the number aloud near people, for example, when you’ve got the bank on the line and you’re standing out in public.

Shred your mail after you’re done ignoring your statements and other documents piling up on your desk that contain your full address. Some thieves have gotten into the habit of digging through your trash to uncover your valuable information. You could also look into opening a post office box and forwarding mail to it; many institutions require that a physical address be on file before opening a new account.

Unfortunately with Facebook, Twitter and the whole offering of social media, keeping your birthdate private is a tough endeavor.

Not to worry, your name and birthdate are as useful to an identity thief as a dollar at Nordstrom. They won’t go far.

By taking preventative measures, such as obtaining your free credit report and keeping your private information from becoming public, you’ll reduce your chances of falling victim to identity theft.

You’ll also reduce your chances of being sold a bank product that amounts to not much more than a monthly stream of cash for your dear banker.

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