Social Media Can Lead to Identity Theft

Social media websites such as Facebook, Twitter, LinkedIn, etc. are an excellent way to connect with friends, share pictures, network, seek out employment opportunities and the like. Unfortunately, not everyone is using social media for this purpose; some individuals are using social media as a way to gain access to information that can help them commit crimes such as identity theft.

Identity theft occurs when someone uses your personal information to access your bank or credit card accounts, open up new accounts in your name, or generally commit fraud or other crimes without your knowledge.

According to Javelin Strategy and Research’s 2012 Identity Fraud Survey Report, over 11.6 million Americans have been a victim of identity theft and identity theft through social media is on the rise.  Although the survey could not find a direct correlation between social media and identity theft, the study did find that consumers who use social media are at a greater risk of becoming a victim.

Many consumers believe their social media website is a safe space to share their personal information, but often they are revealing too much information. Could you be one of them? Follow these simple tips to help reduce the likelihood that you will be a victim of identity theft through your social media profile:

· Limit the information you make available on your profile: Do not list your phone number, date of birth (if you include your date of birth, omit the year in which you were born), names of relatives, where you work or have worked in the past, what schools you attended, mailing address, email address, pet’s name, hobbies and interests, etc. If the above information is available on your social media website, a thief may be able to find the answers to common security questions companies such as banks, ask to verify your identity.

- Do not accept strangers into your social network: Thieves try and connect with individuals they do not know to access their profile hoping they can find information that can be used to commit identity theft.  If you and a stranger have a mutual friend, always ask your friend how they know the person before you connect with them. You may be surprised to find that your friend does not know the person very well. Also, be aware that some thieves create fake profiles using the names of real people you know so you are more likely to connect with them. Limit your connections to people you regularly socialize with.

- Update antivirus software: Antivirus software can be installed on your computer to detect and remove malware. Malware is software that infects your computer with viruses which can gather sensitive information from your computer.  Typically, consumers get a virus on their computer by visiting websites that are infected with malware.  Unfortunately, consumers tend to feel their social media website is a “safe” place and as a result, are more likely to click on third party website links shared by individuals within their social network.  By clicking the link, you may be directed to a fake website that requests you enter your personal information or prompts you to “download” or “update” a program, both of which may infect your computer with malware.  Once infected, the thief may send emails to your contacts through your social media account requesting or suggesting that your contacts click on a link which may infect their computer with malware or introduce some other scam.  *It is important to remember that the account holder may not realize their account has been compromised until a later date and may not associate the problem with your account.
 
- Adjust your privacy settings:  Many social media platforms allow you to adjust your privacy settings so that you control who can and cannot view your profile.  Search your social media toolbox today to find out how to adjust your settings. Limit access to your profile to people that you know.

- Change your password every three months or more often: Many individuals use the same password for all of their accounts including banking, email, social media, etc. and rarely change them.  If you use the same password for all accounts and a thief is able to access one of your passwords, you have inadvertently given them the password to all of your accounts.  Create separate passwords for all of your accounts and change your password often.  To help you remember to change your password, use a prompt such as an appointment on your calendar as a reminder.

Hopefully, neither your social media profile nor any of your other accounts that contain personal information will ever be compromised.  If any of your accounts are compromised, contact the company that holds your account directly to learn about their recovery process.  Also alert your contacts. This way in the event the thief tries to communicate with them requesting money or for some other scam they will be prepared. For more information on identity theft, visit the Federal Trade Commission website at www.ftc.gov or contact one of Debt Counseling’s Certified Personal Finance Counselors at 888.354.6332 and we can help you on your way to …a brighter tomorrow!

# # #

CAN I BE DENIED A CHECKING ACCOUNT?

Have you ever been surprised that a financial institution, such as a bank or credit union declined your application to open a checking account?  Financial institutions do not publicize that a credit check may be required to open an account. Even though financial institutions aggressively advertise with promotions and giveaways to encourage consumers to open up a new account, they have the right to protect themselves from at risk consumers. To the surprise of many, some banks have account eligibility requirements and can deny an individual if they have mishandled their bank accounts in the past.

Financial institutions want to open accounts for consumers who pose the least amount of risk.  Consumers who do not regularly overdraw on their bank accounts or incur fees on their accounts are good candidates for being approved.

If you regularly incur fees or have outstanding checking account related debt with another financial institution, you may be turned down if you apply to open up a new account.  Typically, the bank representative simply states that the account cannot be open “due to information in your credit file”.  The credit file the financial institution is referring to is not your credit report (a report generated by Experian, Equifax or TransUnion that details how you have handled credit in the past i.e. credit cards, car loans, student loans, etc.).  Rather, the credit report the bank refers to is the vastly unknown consumer reporting company, Chex Systems, Inc.

Chex Systems is an independent third party organization that gathers and reports on how well the consumer has handled their checking account(s) over the past five years.  Before we learn more about what is in a Chex Systems report, let’s review common, often confusing bank terminology. 

¨ Overdraft: This happens when you write a check or use your debit card to withdraw more money than you currently have in your checking account.  The financial institution will release the funds to cover the check or debit transaction, but an overdraft fee is charged (typically between $29-$39).  The consumer is responsible for the overdraft fee as well as the funds withdrawn by the check or debit transaction.

¨ NSF (insufficient funds): also known as a bounced check:  This happens when your checking account is debited and funds are unavailable; the check does not clear and funds are not released.  Typically, the financial institution and the retailer will charge an NSF fee or bounced check fee.

Consumers may be denied a checking account due to unpaid fees, such as the ones listed above.  Similar to credit reports, it takes time and effort to rebuild your checking account history but it can be done and DCC is here to help! 

If your request to open a checking account has been denied - it is an acceptable practice to ask why you have been denied; then order a copy of your Chex Systems report to learn what negative information is being reported.  Similar to credit reporting agencies, every consumer is entitled to a copy of their Chex Systems report once every twelve months.  To order a copy, visit their website at www.consumerdebit.com or call 1.800.428.9623. 

Your personal Chex Systems report will provide details of the following information as it pertains to your file.  Information reported in ChexSystems may include:

* Identity Theft Security Alert: This alert is requested by consumers who were victimized by identity theft.  Banking identity theft is the act of a third party opening a checking or savings account using someone else’s identifying information i.e. social security number.  Typically, the thief will mishandle accounts listed in your name through bounced checks, overdraft, etc.  An active identity theft security alert through Chex Systems can help to prevent new account identity theft by requiring consumers to provide a password while the security freeze is active.  For more information on identity theft, contact one of DCC’s credit counselors.

* Reported Information: Any banking accounts that have been mishandled in the past five years or outstanding debt owed to a financial institution will be reported in Chex Systems.  Typically, NSF and overdraft fees are reported in this section as well.

* Consumer Initiated Inquiries:  Each time a consumer applies for a credit card or completes an application for a checking account at a financial institution, an inquiry is reported through Chex Systems.  Inquiries can be reported for up to three years.

* Creditor Initiated Inquiries:  Unbeknownst to you, if your financial institution uses Chex Systems as an evaluative tool before opening bank accounts, your Chex Systems file may be periodically reviewed by creditors to determine pre-approval, potential employers or a potential investor to assess your credit risk.  Creditor initiated inquiries are not reported to others on your Chex Systems report, but are reported to you as a courtesy. 

* Retail information: Retailers and other businesses that accept checks for payment report returned checks to Certegy Check Systems, Inc.  Chex Systems collects this data from Certegy Check Systems, Inc. and reports it on the Chex Systems report.  If you feel a returned check is reported in error, you must dispute this information with Certegy Check Services, Inc. directly by contacting 1.800.437.5120 or write to Certegy Check Systems, Inc. P.O. Box 30046, Tampa, FL 33630.

* History of checks ordered:  All checks ordered by the consumer will be reported for up to three years.  

Unfortunately, like the credit reporting agencies, information in Chex Systems is not always accurate.  It is common for consumers to be turned down for a bank account based on errors reported by Chex Systems.  For example, Chex Systems may report that $35.00 is owed to Bank A due to an overdraft fee.  In reality, the consumer paid the outstanding overdraft fee, but Bank A did not update Chex Systems.  Like credit reporting agencies, it is the consumer’s responsibility to dispute incorrect information (provide proof to validate your claim). Chex Systems will investigate and update your report if the claim is validated.  Additionally, each consumer is permitted to add a personal statement to their Chex Systems file providing details regarding a dispute or blemish on their file.

Please note: Chex Systems does not approve or deny an application to open a checking account; the decision to open an account is determined by the individual bank where the application was requested.

If you are turned down for a checking account, don’t give up!  Order your Chex Systems report and take the time to clear up outstanding debt.  It is important to have a bank account as it allows you to cash checks at the bank and avoid high cost check cashing outlets.  Additionally, handling your checking account properly helps to establish a positive relationship with the financial institution.  A long lasting, positive account history may help you in the future – you may be entitled to additional services free of charge or if you do not meet the traditional criteria for a loan, the bank may be willing to take a risk on you and give you a loan due to your positive history.

As always, if you are struggling with managing your checking account and find that you are regularly incurring overdraft or NSF fees, please contact one of DCC’s Certified Personal Finance Counselors today.  Our counselors can help you identify the cause of your financial challenges and work with you to create a plan of action to avoid overdrawing your checking account, all free of charge.  Our counselors are trained on many aspects of personal finance and are here to help you on your path to …a brighter tomorrow.