Be a Safer and Smarter Consumer + National Advocate Resources
Projections show that around 230.5 million Americans will shop online in 2021. As more Americans turn to e-commerce, it’s essential that they protect themselves from fraud. In the eyes of scammers, increased online shopping means more opportunities to steal from innocent consumers. Although fraud is everywhere nowadays, we’re going to share some tips and tricks that will help you become a safer and smart consumer.
Fraud Statistics: Why It’s Such a Big Deal
Whether you’re shopping online or at the mall, there’s always a lingering threat of fraud. The statistics speak for themselves:
- Approximately 47% of Americans experienced identity theft in 2020.
- In 2020, fraud cost American consumers $65 billion.
- Data breaches impacted 300 million people in the last year.
- According to PWC, companies lose $42 billion to fraud annually.
- The Identify Theft Resource Center found that fraudsters steal the identity of 1.3 million children every year.
Monitor Your Credit Report
Federal law requires each major credit reporting agency (Equifax, Experian, and TransUnion) to give you a free credit report every 12 months. It’s also a great idea to check your credit score monthly to spot any significant drops.
So, what should you look for on your credit card report to identify fraud? Look for suspicious activity such as unrecognizable account openings, late payments, and collections. If there’s anything that screams “fraud,” freeze your credit as soon as possible to avoid further damage. Take a look at our “fraud and identity theft resources” at the end of the page to learn how to freeze your credit with each credit reporting agency.
Get Identity Theft Protection
Identity theft protection is a form of insurance that typically offers stolen-funds reimbursement, credit monitoring, and fraud alerts. Many employers offer identity theft protection at discounted rates, but you can also buy it on your own. The standard policy ranges from $10 to $40 per month. Identity theft protection is an excellent choice if you don’t have the time to monitor your credit or just want some extra peace of mind.
Use Credit Cards
Many people stigmatize credit cards without recognizing their numerous benefits. One such benefit is that credit cards come with heightened fraud protection compared to debit cards. It’s much easier to initiate a chargeback and recoup fraudulent payments. Although banks will flag debit card transactions as suspicious or fraudulent, chances are slim you’ll recover the money.
The Fair Credit Billing Act gives consumers even more reasons to use credit cards over debit cards. Under this act, you aren’t responsible for more than $50 worth of unauthorized credit card transactions. Moreover, the credit card company won’t hold you accountable for a single penny of unauthorized activity in many cases.
Enable Two-Factor Authentication
Talk to any cybercriminal, and you’ll learn that it’s not hard to crack a password. Fortunately, many websites are now using two-factor authentication. To log in to a website with two-factor authentication enabled, you’ll have to enter a code sent to your email or phone. This extra step makes it extremely difficult for fraudsters to hack your account, but not entirely impossible.
Many banks, for example, offer RSA SecurID Hardware tokens. You’ll have to pay a small fee, but it’s virtually impossible for hacker to get their hands on a physical token unless they still it from you. Physical tokens tend to surpass the security of mobile and email two-factor authentication, primarily when you use them for banking and investment accounts.
Don’t Use the Same Password Twice
Recent data shows that around 68% of Americans use the same password twice. Although using the same password makes life easier, it makes you significantly more vulnerable to fraud. A criminal can run your password and username through a cracker tool. This software cycles your password and username through various sites. Before you know it, the fraudster could have access to over ten of your online accounts.
Whether you’re at home or work, you should never write your passwords down on paper. Not only that, but you should also not store passwords in unencrypted Word and Excel files. Instead, you should use a tool such as Google Password Manager. This tool enables you to save unique passwords that you use across multiple platforms securely. To add the cherry on top, Google Password Manager notifies you if it found your password in a data breach.
Never Share any Banking Details Online
No matter the circumstances, you should never share your banking details with anyone online. This information includes your routing and account number and online banking login details. There is one caveat – it is acceptable to provide your routing and account number to pay bills and accept direct deposits from a legitimate employer. However, before giving any banking details, you should verify that the company is legitimate.
How do you verify that a company is legitimate?
- Search for the company on the Better Business Bureau
- Confirm that the business has a physical address and phone number
- Perform a Google search and look for red flags (i.e., poor reviews)
- Ask friends and family if they’re aware of the company
- Search public records to see if the business has a license
Routinely Review Your Bank Account
The general rule of thumb is that you should check your bank account at least once per week. Routinely reviewing your bank account helps you spot and act on any unauthorized transactions. The longer you wait, the harder it is to recoup stolen funds. It’s also a brilliant idea to look at your bank account after making a significant purchase or if you attempted to buy something and you received an error when trying to pay.
You should also consider setting up alerts with your bank accounts. Most banks will send you a text message or email if a transaction hits your account that surpasses a user-defined threshold. Although this could be a bit annoying if you use your account frequently, it’s an excellent way to stop fraud in its tracks.
Research a Company Before Making a Purchase
As alluded above, you should always perform due diligence before making a purchase, no matter the amount. Even if you’re making a mere $5.99 purchase, the company could compromise your banking or credit card details. If the company has a solid BBB rating, a physical address and phone number, and favorable reviews, then you’re probably in the clear. However, you should also confirm that:
- The company’s website has a valid SSL certificate
- The company is using a secure payment method (i.e., PayPal, Authorize.net, Stripe)
- You aren’t redirected to another website when making the purchase (unless it’s a secure and valid website such as PayPal)
Use Caution When You See Something Too Good to Be True
A brand-new unlocked iPhone 13 Pro selling for $399 – sounds like a great deal, right? Unfortunately, if you fall for this, you can almost expect to be out $399. Always question prices that seem too good to be true. Ask yourself, “why is the store selling this product for 50% less than retail?”
In many cases, scammers set up these websites for a quick cash grab. They’ll sell thousands of dollars of “products” and vanish in the blink of an eye. You’ll have no choice but to dispute the charge with your bank or credit card company if you want to get the money back.
Don’t Fall for Phishing Emails and Texts
If you have any experience in corporate America, you’re probably well aware of the concept of phishing. Unfortunately, fraudsters are gaining the upper hand with more sophisticated techniques. In short, cybercriminals use phishing to lure individuals into providing sensitive information, such as banking details or passwords.
Fraudsters usually send attempts to phish for information by sending misleading emails and text messages. In many cases, they’ll spoof the message, making it appear that it’s from someone you know or a legitimate company. Phishing attempts often have calls-to-action, such as “click here to reset your password.”
It’s relatively easy to spot a phishing attempt if you look for the following:
- Poor grammar and spelling mistakes
- Anything that sounds too good to be true
- Impersonal greetings (i.e., not saying your name)
- Unfamiliar links and attachments
- Poor quality graphics
- Foreign top-level domains such as .ru, .cd, and .cz
Don’t Answer Unknown Calls
If you receive a call from an unknown caller, don’t answer it. Let the caller leave a voicemail, and you can decide if you want to call back. It’s easy to fall victim to scams when you’re put on the spot (and that’s often the case with phone calls). If you receive endless questionable calls, you can add your phone number to the National Do Not Call Registry. However, you should always remain skeptical of unfamiliar callers, especially if they ask you for sensitive information.
Keep Your Social Media Accounts Private
Scammers are constantly on the prowl for personal information such as where you work, the names of your friends, and where you attended university. What purpose does this information serve? Fraudsters can use information obtained from social media to crack security questions, perform social engineering, and even blackmail you.
Even if you have private social media accounts, you should still be mindful of what you post. All that information could fall into the hands of a scammer if someone hacks your friend’s account. For example, never post your phone number, address, or other sensitive information. Even posting where your work could help a criminal steal your identity.
Use Free Resources to Learn More About Fraud
We have provided you with a ton of information to help you become a safer and smarter consumer. Nevertheless, there’s always room for improvement when it comes to avoiding fraud. Various online platforms, such as Coursera, offer courses on criminology and computer forensics. There’s no better way to steer clear of fraud than to get into the mind of a criminal. Moreover, you can also use the resources below to read more about fraud and how to avoid it.
Fraud and Identity Theft Resources
Are you a victim of fraud or identity theft? We’ve compiled a list of the best resources that you can use to report scams, identity theft, and place holds on your credit report.
- State Consumer Protection Offices: This website lets you find your state’s consumer protection office. You can work with local agencies to report fraud related to consumer products, banking, insurance, securities, and utilities.
- FBI Internet Crime Complaint Center: You can use the FBI’s Internet Crime Complaint Center if you’re a victim of online crime. After receiving the complaint, the FBI may forward your case to state or international law enforcement agencies.
- Cybersecurity & Infrastructure Security Agency: Are you a victim of phishing, malware, or other online vulnerabilities? Report these incidents to the Cybersecurity & Infrastructure Agency.
- BBB Scam Tracker: Although not a government agency, the Better Business Bureau (BBB) can make other consumers aware of fraudulent businesses. By reporting a scam to the BBB, you can help shut down deceitful companies.
- Report Fraud (FTC): The Federal Trade Commission works with law enforcement agencies to investigate fraud. This website lets you report fraud and learn more about how you can protect yourself. This includes things like mortgage fraud for home buying, auto loans, lemon cars, etc.
- Report Identity Theft (FTC): IdentityTheft.gov (part of the Federal Trade Commission) lets you report identity theft and receive a tailored recovery plan.
- United States Postal Inspection Service: You should report any mail-related crimes to the United States Postal Inspection Service. Examples of such crimes include suspicious mail, mail fraud, and mail theft.
- gov: Did you fall victim to a fraudster in another country? Econsumer.gov partners with over 40 consumer protection agencies worldwide.
- Experian Fraud Alert Center: If you’re a victim of fraud, add a fraud alert with Experian to protect your credit report.
- TransUnion Fraud Victim Resources: Add and remove fraud alerts with TransUnion to keep your credit intact.
- Equifax fraud alert: Use Experian’s tool to file an initial or extended fraud alert if you’re a victim of identity theft.
Advocacy for Consumer Protection
- National Association of Consumer Advocates – Help Finding an Attorney
- Consumer Federation of America
- Consumers Union
- Federal Trade Commission
- U.S. Securities and Exchange Commission (SEC)
- Federal Communications Commission – Consumer & Governmental Affairs Bureau
- Coalition Against Insurance Fraud
- FBI Common Fraud Schemes
- Fraud.org from National Consumers League
- Privacy Rights Clearinghouse
- Internet Keep Safe Coalition
- Consumer Action Website
- National Do Not Call Registry
- US Government Recalls
- Association of Certified Fraud Examiners
- National Center for Disaster Fraud
- Consumer World
- US Consumer Gateway
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