Wednesday, December 22, 2010

Protecting yourself against Fraud this Holiday Season

Interesting article that was sent to me by our Equifax Partners.

In an effort to find the perfect holiday gifts, you are likely hitting the shops and the Web to source your favorite things. While it is extremely convenient to use debit cards, credit cards and websites to make purchases, it is important to safeguard your personal information.

Tara Zecevic, vice-president, Technology Solutions encourages you to get educated and offers this advice, "Be familiar with the various types of online and offline scams out there. Fraudsters prey on people's vulnerabilities and lack of understanding. Be diligent." To help you prevent fraud, she recommends the following:

  • Create strong passwords
  • Use different passwords for accounts containing your personal, banking and credit card information
  • Delete spam
  • Check your statements and credit report regularly
  • Follow up on unrecognized transactions and undelivered bills or statements, since this could be a sign of identity theft

In the case of payment for gift purchases, Zecevic recommends the use of credit or debit cards. She says, "Choosing to use credit or debit cards is preferred since banks and credit card companies are automatically set up to monitor purchase activity and will alert you to unusual transactions. No matter the card you decide to use, always remember to take the following precautions:

  • Memorize your PIN and never give it out!
  • Always cover your PIN and card at automated bank machines and in stores
  • Be prudent -- use an ATM from a trusted source
  • Watch for cameras, cell phones, mirrors and other devices that can be used to view and/or record your information
  • Never turn a blind eye to people who may be watching
  • Don't let cashiers and servers take your card out of sight -- take it for payment processing yourself
  • Avoid providing personal information such as address, postal code, phone, date of birth unless absolutely necessary

When shopping online, ensure your computer is secure with updated protection and avoid making your purchases on public computers at internet cafes and libraries. Once you're confident that your computer is safe, be aware of the following scams to protect yourself against online fraud:

  • Don't trust emails and website links to offers that "look too good to be true"
  • Limit the information you post on social networking sites and only accept 'friend' requests from people you trust. Clicking on bogus email 'friend' requests can download malicious software designed to steal your personal or financial information
  • Do not respond to or click on links or attachments from unsolicited emails to guard against malicious and password stealing software
    • Don't fall victim to phishing emails from reputable credit card companies or financial institutions requesting that you confirm account or login information -- these are scams! If you receive this type of email, notify the company immediately.
    • Ignore charity emails and make a donation via their official website.
    • Be wary of employment scams requesting start-up fees or information of a personal or financial nature
    • Ignore phony delivery emails requesting charges to release package
  • Always be careful when opening holiday e-cards -- make sure you recognize and trust the sender and website

To help protect yourself against fraud this holiday season, staying informed and putting into practice what you know is the first line of defense.

Tuesday, December 21, 2010

Christmas Budget

Like most people, Christmas demands soon start to knock on your door and before you know it, the wallet becomes a revolving door. The introduction of Credit to our society now allows purchasing while removing some logical decision making. The cash in hand purchase method is substituted by credit limits which simply means the measure of affordability is the credit remaining on the credit card and not on the hard earned cash saved. The solution is a Christmas budget that details your Christmas list and the dollar value attached to each person your shopping for. The purpose is to avoid those last minute shopping urges to add icing on the cake gift to that special someone that could suddenly leave you hundreds of dollars in debt. In January the last thing anyone wants is to pry open their credit card statement and review pages of unnecessary purchases simply because of available credit. In a recent survey from ING direct, 71% of Canadians revealed they were using the savings this year for Holiday purchases, as opposed to adding debt. That's admirable however according to Equifax Canada; total outstanding credit card debt hit $78 billion in September 2009 -- up from $76 billion in September 2008. Canadian debt is growing at a rapid pace and in most cases at high rates of Interest.

So what to do, you might ask? Consider saving for Christmas 2011, and start a pre-authorized withdrawal from your bank account into a special account. Leading Edge Credit Union offers a SSC product that provides this simple savings option . It also pays a premium interest rate on your deposit each month. In January, consider consolidating your credit card balances in a loan with a lower rate and a structured payment. This will allow you some comfort of knowing exactly when you will have this credit paid off. Pay particular attention now to credit card statements that indicate the time it will take for you to pay off your credit card debt. New legislation requires that all credit cards must disclose this information. A loan could cut your interest rate in half and ensure you pay off your debt in the shortest time frame saving you thousands of dollars in unnecessary interest. So in summary, plan, plan, plan and next year's Christmas will hopefully be less stress on you and your wallet.