5 steps to protect your credit

5 steps to protect your credit

Updated: Jan 27, 2014 10:03 AM
© George Doyle / Stockbyte / Thinkstock © George Doyle / Stockbyte / Thinkstock


By Andrew Housser

Last month, hackers broke into Target's data system just as the holiday shopping season got underway. More than 40 million customers who made purchases between Nov. 27 and Dec. 15 may have had their debit and credit card numbers stolen. Target now says thieves also stole personal information for an additional 70 million customers. These customers are at high risk for identity theft. If you are concerned that your personal finances are now sporting a bullseye, take these steps to safeguard yourself.

Step 1: Monitor your accounts daily

Keep an eye on bank and credit card accounts for unauthorized activity. Do not wait until you receive your monthly statement. Rather, check for discrepancies frequently each week. Thieves often use small, unusual amounts ($1.21 or 6 cents) as a test before attempting a pricier transaction. You will need to monitor your accounts for quite some time, as data thieves can wait months before taking action. Experts say it is not necessary to ask your bank or credit card companies to issue new cards unless you have a problem.

Step 2: Report suspicious account activity

If you notice unauthorized charges, call your bank or creditor immediately. The fraud monitoring department will cancel your card and issue a new one. They will help you dispute charges. You will not be liable for unauthorized charges. If you paid for purchases at Target between Nov. 27 and Dec. 15, call the Target hotline (866-852-8580). Target will cover the cost of any fraudulent activity that results from the data breach.

Step 3: Change your PIN

Personal identification numbers (PINs) were among the data stolen from Target. A PIN is the number you enter when processing debit card transactions or making cash withdrawals from ATMs. Because the stolen PINs were encrypted, experts believe the thieves will unable to use them. It's still wise, however, to ask your bank and credit card companies to change your PINs.

Step 4: Register for free credit monitoring

Target is providing all customers one year of free credit monitoring and identity theft protection via credit bureau Experian. You can sign up for this service even if you are not a known victim of the cyber-attack. Visit CreditMonitoring.Target.com and enter your name and email address. Experian and Target will email an activation code and instructions. You have until April 23 to register for this service and until April 30 to activate it. You will receive one free credit report as well as notice of any inquiries, newly opened accounts or delinquencies. Victims of identity theft related to the Target security breach will be assigned an agent to help resolve problems. 

Step 5: Beware of scams

If Target has ever contacted you by mail or email, it is possible that your information (along with your phone number) is now in the hands of crooks. This makes you a more likely target of phishing scams. Thieves phish for additional information (such as your bank account or Social Security numbers) in several ways. They may send emails that look like they are coming from a bank, creditor or store (like Target). The message asks you to click a link, which directs you to a fraudulent website that may look authentic. To protect yourself, do not open emails or attachments from unknown senders, or click links from these senders. Use an Internet search engine instead to navigate directly to a bank or credit company site. If you receive a call from someone claiming to be from your bank or a credit card company, tell the person you will call them back. Then call the toll-free number on the back of your credit or debit card to verify the earlier call's authenticity.

Any business is at risk for a cyber-attack. This month, luxury retailer Neiman Marcus announced that some of its customer information also had been compromised. With the popularity of computer-processed credit card transactions, data breaches may become more widespread. For these reasons – as well as your ability to stick to your budget – paying with cash is a great way to protect yourself. But when cash is not feasible, observe safe shopping practices while remaining vigilant about your personal finance accounts.

 

 

Andrew Housser is a co-founder and CEO of Bills.com, a free one-stop online portal where consumers can educate themselves about personal finance issues and compare financial products and services. He also is co-CEO of Freedom Financial Network, LLC providing comprehensive consumer credit advocacy and debt relief services. Housser holds a Master of Business Administration degree from Stanford University and Bachelor of Arts degree from Dartmouth College.
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