Identity Theft and Credit Cards

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Identity Theft and Credit Cards

• Chris Miller
• Your Debt Management Consultant
• USA Funds
• chimille_at_usafunds.org

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Agenda

• What is identity theft?
• How do identity thieves get your information?
• How can you protect your personal information?
• What if it happens to you?
• Resources
• State-specific information

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What is identity theft?

• Unauthorized use of your personal information
• Social Security number
• Passwords and PINs for debit and phone cards
• Credit card numbers
• Current and former addresses
• Birth date
• Mothers maiden name birth date
• to commit fraud and other crimes

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Identity thieves

• Steal records from employers (yours or theirs)
• Bribe employees with access to your records
• Hack into an organizations computers
• Search your trash at home or work (dumpster
  diving)
• Steal your wallet or purse containing ID, credit
  cards, checks, Social Security card, etc.
• Steal your mail bank and credit card statements,
  checks, loan pre-approvals, tax information
• Complete a change of address form to divert your
  mail

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damage your reputation and cost you money

• They can...
• Open new credit card and bank accounts using your
  personal information
• Go on a spending spree with your stolen credit
  cards and identification
• Change the mailing address on your credit card
  account, and run up charges before you realize it
  
• Take out auto loans in your name
• Establish wireless phone service in your name

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How to protect your personal information

• Get a copy of your credit report annually
• Remove your SSN from your drivers license,
  insurance cards, etc.
• US Mail - Dos
• Use a secure mailbox for your outgoing mail
• Check your statements and bills every month
• Shred anything containing personal information
• Reduce the amount of solicitations you receive
• US Mail - Don'ts
• Have checks, blank or otherwise, sent to an
  unlocked mailbox

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How to protect your personal information

• Telephone Dos
• Sign up with the national Do Not Call registry
• Protect your calling card from prying eyes
• Check your bill
• Telephone Don'ts
• Give out your SSN or other personal data to
  callers
• List your phone number
• Conduct personal business where you can be
  overheard

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How to protect your personal information

• ATM/Debit Card - Dos
• Use a PIN thats difficult to figure out
• Watch for people looking over your shoulder
• ATM/Debit Card - Don'ts
• Use convenience store ATMs they may not be as
  secure as bank machines
• Use your debit card for online shopping use a
  credit card. Debit cards give access directly to
  your bank account credit cards often have better
  protection for problems with merchandise

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How to protect your personal information

• Computer Dos
• Use up-to-date virus and security protection
• Use one credit card for internet shopping
• Clean the hard drive of computers you discard
• Close your browser after online banking or
  shopping
• Computer Don'ts
• Store personal information or passwords on your
  computer
• Store credit or bank card numbers on your
  computer
• Open or respond to unknown email, especially
  attachments
• Fall for phishers scammers who send
  legitimate looking email fishing for personal
  information

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What if it happens to you?

• Step 1 Place a fraud alert on your credit file
• Call the toll free of 1 of the 3 bureaus a
  fraud
• alert will be placed on all 3 bureaus, and you
  will
• be sent reports from all 3 free of charge.
• 2. Review each report and notify the credit
  bureaus
• to remove any account that is not yours.
• 3. Follow up telephone requests in writing

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What if it happens to you?

• Call each of your credit card holders to cancel
  your accounts and get new ones. Use new
  passwords and PINs.
• Call each of your utility, ISP providers, etc. to
  change accounts if they have been misused
• To report false checking or bank accounts, and to
  insure transactions will be refused, contact
  TeleCheck 800 710-9898 and International Check
  Services 800 526-5380
• Follow up telephone requests in writing

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What if it happens to you?

• Use the ID Theft Affidavit form provided by the
  FTC
• Be ready to provide documentation of your
  accounts and steps taken so far
• Keep a copy of the report. You may need to
  provide a copy to your creditors
• Follow up telephone requests in writing

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What if it happens to you?

• Step 4 File a complaint with the FTC
• Call 877 438-4338 or visit www.consumer.gov/idthef
  t
• The FTC maintains close contact with law
  enforcement to prevent and track down abusers
• If you receive a phishy email, forward it to
  uce_at_ftc.gov

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Resources

• FTC Identity Theft Hotline [phone]
  www.consumer.gov/idtheft
• National Do Not Call Registry 888 382-1222
  www.donotcall.gov
• Stop junk mail, both USPS and email
  www.dmaconsumers.org
• Opt out of credit reporting industry pre-screen
  lists
• 888 567-8688
• Identity Theft Resource Center www.idtheftcenter.o
  rg
• Order credit reports
• Equifax 800 685-1111 www.equifax.com
• Experian 888 397-3742 www.experian.com
• TransUnion 800 916-8800 www.transunion.com
• Programs to scrub your hard drive
• Sure Delete www.wizard-industries.com
• Safeshred Free (for Macs) www.codetek.com

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Credit Bureau Fraud Departments

• Equifax www.equifax.com
• 800 525-6285
• PO Box 740241, Atlanta, GA 30374-0241
• Experian www.experian.com
• 888 397-3742
• PO Box 9532, Allen, TX 75013
• TransUnion www.transunion.com
• 800 680-7289
• Fraud Victim Assistance Division, PO Box 6790,
  Fullerton, CA 92834-6790

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State-Specific Information

• The FTC provides state-specific data such as of
  complaints, top identity theft types, top
  metropolitan areas for identity theft within the
  state, average dollar loss via the Consumer
  Sentinel Identity Theft Data Clearinghouse
• www.consumer.gov/sentinel/index.html

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Student Credit Card DebtThe Emerging Crisis In
Debt Management
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By the end of this session, you will

• Understand the issues related to student credit
  card debt
• Know how credit card debt is adversely impacting
  students
• Identify the common errors students make when
  using credit cards
• Learn ways to address these issues at your
  institution

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Student Credit Card Debt

• Is it a problem?
• Majority of students use credit cards responsibly
• For some, card use is putting them at risk
• this number is increasing, rapidly
• Credit card debt is not closely monitored by
  colleges
• Over the past ten years, the industry has
  aggressively marketed to students
• So, lets look at some of the details . . .

Source Student Aid Transcript Summer 1999 and
Institute for Higher Education Policy Survey
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Student Credit Card Debt

• Why is this a problem?
• Most students arent experienced with dealing
  with debt
• dont understand the basics of credit debt
• dont understand that low intro rates change
• quickly max out limit often 1,500 or more
• take out new cards to pay for existing debt
• dont practice delayed gratification very well
• dont understand how a bad credit start can
  impact their lives for many, many years to come

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Student Credit Card Debt

• Credit card usage is becoming a big problem for
  many more college students
• 83 of undergraduates have at least one card
• a 24 increase since 1998
• Average credit card balance is 2,327
• 21 of undergraduates who have cards, have
  high-level balances between 3,000 7,000
• Students double their average credit card debt
  and triple the number of credit cards from when
  they arrive on campus until graduation

Source Undergraduate Students and Credit Cards
An Analysis of Usage Rates and Trends -Nellie Mae
April 2002
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Student Credit Card Debt

• Characteristics of high-risk use
• Average credit card balances over 1,000
• Owning four or more credit cards
• transferring balances, getting new ones to pay
  off existing cards
• Carrying a balance each month
• Using credit cards to charge tuition or fees
• many college do not allow anymore

Source Institute for Higher Education Policy
Survey
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Another Piece of the Puzzle
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Student Credit Card Debt

• College Students and Credit Cards
• GAO investigation requested by Congress
• conducted about 100 interviews at 12 universities
  and colleges
• reviewed and quoted three studies
• TERI/IHEP, Student Monitor Nellie Mae
• Report released July 17, 2001 by three
  Congressional representatives
• Louise Slaughter (D-NY), John Duncan (R-TN), and
  Paul Kanjorski (D-PA)

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Student Credit Card Debt

• Looked at four objectives
• advantages/disadvantages
• results of key studies
• university policies
• business strategies/educational efforts of credit
  card issuers

Source www.gao.gov/
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GAO Report to Congress
Interest savings between lowest/highest payment
1,570 time saved 75 months or 6.25 years!
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Student Credit Card Debt

• The Risks
• Between 10 - 20 of students are risking
  unacceptably high levels of debt
• 33 of students have both student loans and
  credit cards
• Many must take on additional jobs to pay debt
• Many cut back on the number of classes or drop
  out of school all together

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Student Credit Card Debt
In 1998, Indiana University reported that it lost
more students to credit card debt than to
academic failure.
Source As quoted in a study by the Consumer
Federation of America Georgetown University
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Student Credit Card Debt

• The Risks
• Career choices can be limited
• Some are forced to file bankruptcy
• A few students, so overwhelmed with debt, have
  committed suicide

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Believe It or Not . . .

• Recently, all credit card companies were kicked
  off the University of Louisville campus because
  one company was giving away offensive T-shirts to
  students who completed credit card applications
• Some students, so far in debt, have resorted to
  cyberbegging to help pay off their debts
• Many young people are filing bankruptcy right out
  of college due to high credit card and student
  loan debt (federal and private)
• In 1999 over 100,000 persons under the age of 25
  filed for bankruptcy

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This Just In

• Identity theft bill signed into law on 12/4/03
• Updates the Fair Credit Reporting Act
• Requires one free credit report per year from
  each major credit bureaus
• Consumers must be notified if a business is going
  to report to the credit bureaus
• House Financial Services Committee Chairman,
  Michael Oxley, R-Ohio
• This is the most significant consumer protection
  and financial literacy legislation signed by
  Congress in decades.

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This Just In

• 27.3 million people have been victims of identity
  theft in the last 5 years, 9.9M past year
• In 2002, identity theft losses to business and
  financial institutions cost 5 billion
• Individual victims lost an average of 1,180
• Emerging as an issue as access to personal
  information increases
• Must educate students
• How to avoid
• What to do if it happens
• Where to go for help

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Student Credit Card Debt

• What can be done?
• Control credit card vendors and their access to
  students or ban them altogether
• Work with parents to limit student use
• Education, offer life skills courses on
  personal finance management topics
• Allow use of starter card, ban others
• Provide credit counseling and/or peer counseling
  for students who get in too deep

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Student Credit Card Debt

• What can be done?
• Explain to other campus areas the relationship
  between high credit card debt and failure to
  graduate
• enrollment and retention issues
• alumni issues
• Highlight your efforts to control credit card
  issues at your institution to parents and
  potential students
• many parents are becoming aware of this issue and
  are asking what schools are doing about it

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Student Credit Card Debt

• What can be done?
• Require credit card vendors to provide
  educational materials/sessions
• Establish a relationship with the local Consumer
  Credit Counseling Services (CCCS) office
• call 800-388-2227 to be connected to the office
  nearest you
• web site National Foundation for Credit
  Counseling www.nfcc.org

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Student Credit Card Debt

• For colleges
• review current practices for allowing credit
  vendors, fee structure
• prohibit credit companies from offering trinkets
  to students for completing applications
• include credit card management and debt education
  materials in brochures inserted in bookstore bags
• consider limiting the number of credit card
  tables allowed on campus
• conduct regular debt management sessions

Source Excerpted from PIRG Recommendations
for Colleges, Students, and Congress
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Student Credit Card Debt

• For students
• become informed consumers, know what you are
  getting into
• consider risks and benefits of credit card debt,
  before you apply
• one national credit card is all you need
• if you must carry a balance, pay as much as you
  can afford, every month
• compare the fees, after intro interest rates,
  charges and other hidden costs
• look beyond low intro rates
• select the best value

Source Excerpted from PIRG Recommendations
for Colleges, Students, and Congress
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Other Recommendations

• For Congress
• do not enact industry-supported legislation, that
  is unbalanced and puts the student consumer at a
  disadvantage
• require credit card bills to include a monthly
  calculation illustrating the time it will take to
  pay off the balance at the minimum amount
• prohibit the mailing of unsolicited credit cards,
  even cards that are not activated

Source Excerpted from PIRG Recommendations
for Colleges, Students, and Congress
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Student Credit Card Debt

• USA Funds
• www.usafunds.org/financial_aid/debt_management/ind
  ex.html
• National Endowment for Financial Education
• www.nefe.org
• Credit Card Calculator
• www.calculatorweb.com/calculators/creditcardcalc.s
  html
• Public Interest Research Group Tips
• www.studentpirgs.org/
• www.pirg.org/student/consumer/credit.htm

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Helpful Web Sites

• Other Sites
• www.cardweb.com/
• www.bankrate.com
• www.debtwizards.com/
• www.mapping-your-future.org/features/dmbudget.htm
• www.credit-edadministrator.com/
• www.calculatorweb.com/calculators/budgetcalc/