Your Id Has Been Hacked – Now What?

I guess it comes with age, I turned 53 this past week. In recent years, I’ve had friends, family and business associates impacted by a variety of health issues – some serious, some not. The one thing everyone had in common is that they quickly became experts in whatever was ailing them. I guess when it comes to the bad “it” that happens in life, we don’t pay much attention to it and frankly, we don’t care to know much about it, until it shows up in our life or the life of someone we care about…whatever “it” might be.

Similarly, we see all sorts of articles and spots on morning TV shows about identity theft and we tend to treat it the same way – we’ll pay attention if, and when, we have to. I, however, am committed to having you as a reader of Risks and Rewards Blog, be sufficiently “expert” in this area and then hope you’ll never have to use it.

First off, let’s talk about the risks. You can get hit by two types of identity theft, one that’s not too bad and one that is very serious. Sounds like a health problem already, doesn’t it? The first, not so serious one, is account takeover. As the name implies, it’s a person gaining access to one of your accounts like your credit card or checking account. If you’re ever hit with id theft, you should hope it’s this kind, and the odds favor it. Roughly 85% of all identity theft falls into this category. In fact, there’s a high probability that you’ve been impacted by this type of id theft, so you’re already familiar with it.

If you ever notice any strange transactions in your checking account, contact your bank and report it immediately. With credit cards, most of the time the card company will notify you before you notice something is astray. Major credit card companies run sophisticated computer algorithms that monitor your spending patterns in real-time and can usually quickly spot an “out of the ordinary” transaction.

Earlier this year, I was on a business trip in New York City and paid for a round of drinks with my American Express card. I noticed the bartender held my card for a while, but I didn’t think too much about it. The next morning, I got a call from American Express asking me about some unusual purchases. I did not answer any of their questions because they initiated the call to me. I thanked the person on the line, ended the call and called the phone number on the back of my AMEX card. I was connected to their fraud detection unit. They asked me if I had charged anything at Forever 21, a young woman’s clothing chain store, at a mall in Georgia. Clearly, I was in NYC not Georgia, and I have never shopped at Forever 21, so these facts likely triggered the alert. The thief had charged several hundred dollars of merchandise, which is interesting because my wife later told me that the average item at Forever 21 costs around $25. I guess they were working on replacing their entire wardrobe.

The good news is that with this type of identity theft, account takeover, I was not responsible for these charges. Most major credit cards have a zero liability protection policy. So here are some takeaways:

  1. If you’re contacted by a credit card company on the phone about unusual activity, end the call and call the phone number on your credit card or card statement, so you know who you are speaking with. Never share any personal information over the phone unless you initiated the phone call.

  2. Similarly, if you are sent an email or text by a credit card company, do not reply to the email and don’t call the phone number provided in the email or text, instead call the number on your card or card statement.

  3. If you suspect your card has been hacked, contact the credit card company to report it and request a new card. You should also contact one of the three major credit reporting companies (TransUnion, Equifax and Experian) and request that a fraud alert be placed on your credit report. Whichever one you contact is required to inform the other two. You must provide proof of your identity. The alert is free, lasts 90 days and you can renew it. For more information, here’s a link: Article

AMEX cancelled my card and overnighted a new card to my hotel in NYC, so it all worked out okay. The only frustration, which in the grand scheme of things was not so bad, was that I had to re-establish any automatic payments to the new credit card number. For instance, my Sun Pass toll account had to be re-directed to the new credit card. No big deal.

The other kind of identity theft, identity takeover, is far more serious. I will address this in Part Two of this post.

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