Are You a Credit Fiasco?
How Trusting Are You?
How well do you know the people who might have temporary access to your filing cabinet, home internet, cell phone or wallet? Now think: there's the guy who installed your new wireless modem...your cleaning lady...her kid using your wireless password... the neighbour who feeds your cat when you are away. What about your flatmate’s latest boyfriend? Like most of us, you are probably pretty trusting until the precise moment you are either robbed or betrayed. I've been there.
Since COVID arrived, the sheer number of online scams and cooped-up con artists has exponentially increased. I was nearly taken in by a kind voice on the phone because well...I guess that I was desperate for a chat. Con artists have certainly perfected their methods and know their targets. It's freaky.
Once the damage is done and your identity has been stolen or your bank accounts have been zeroed out, it is mentally exhausting and time-consuming to put things right. Unfortunately, that process is not easy. Sure, you can freeze your credit and you can get a lot of help disputing errors on your credit report, but the process of restoring your credit can take months, if not years. Just imagine the heartache and damage to your psyche. Most victims report that the impacts of identity theft go far beyond the financial, especially when they felt betrayed by someone they knew.
Sad but true fact: a very high percentage of people who abuse your good name are known personal or business acquaintances who had just enough information to forge a credit card or bank application behind your back. A lot of scammers target young people on their social media sites or within their circle of friends. Once these folks are impersonating you and racking up debt, you have two ways of finding out: 1. Checking your credit report or 2. The collector's dogs chase you down. By then things will look bad. Real bad.
Be prepared to be treated badly by the banks and credit card companies who are out thousands for those illegally gotten gains that some dude in Nigeria used to buy a new laptop. Creditors first assume you are the thief or in on the ruse. Be patient and firm with them - they get a lot of pleading calls from victims.
Filing police reports is no fun at all. Sending the report and details to your bank or credit card company is laborious. "Someone" will get back to you eventually. It once took me over 4 months to get money back on a stolen debit card that I had blocked only hours after I realized it was missing. To add insult to injury, my bank kept debiting my account for multiple tanks of petrol several days after I reported my card stolen. I kid you not. One might think the purchase of four tanks of petrol in one day ‘unusual’ given that I typically fill up once or twice a month. So much for my bank's duty of care. Credit card companies use artificial intelligence to detect suspect purchases, so again, they are safer.
Forget calling the police if the perpetrator is a low-life con artist. Civil crimes exist in grey areas. Even when you report a clear case of financial theft, forgery or mail fraud you can bet that your local police have better things to do. I learned the hard way that stalking is not illegal in New Zealand. Perpetrators can cruise up to your postbox and even watch you from across the street in broad daylight as long as they don't threaten you. Besides everyone is wearing masks these days so even when they are caught on CCTV they are very hard to identify.
What can you do besides protect yourself up front? Register complaints with the appropriate agencies. Our NZ Commerce Commission and Privacy Commissioner can advise you on options and what laws might apply. Just be prepared for a slog (an upcoming post will address some of the new ways scammers operate to target people for identity theft).
The fact is: identity theft operates inside our trusting culture with impunity. Do you have time to install security cameras and catch a penniless con in the act and legal funds to go after them? What will that get you if they are caught? Our enforcement agencies are just not equipped to go after white-collar criminals who know how to skirt our laws. Very few people take the trouble to report identity theft which means they are getting away with it.
Financial scams are a multi-trillion-dollar market globally (more on that in my next blog post) and many of them are virtually untraceable. And if they are caught? Apprehension and convictions can take years and few get more than home detention or very short sentences.
By the way, debit cards are risky. Thieves have instant access to your funds with a debit card, and it’s harder and takes longer to get your money back, as I mentioned earlier. Consider using a credit card responsibly given they are insured for their losses and you can amass loyalty points. Ironically, using your credit card raises your credit score as long as you keep the balance low. It's wise to use a small balance card for all your online purchases to prevent large unauthorized withdrawals. Very few stores will reject a credit card these days. Just keep some cash on hand for small retailers.
One more thing: be sure to check your Paypal and Pay Later accounts. By that, I mean actually read the monthly statements. Did Spotify keep charging you after you ended the free trial? Did some unknown creditor or cancelled account slip past you?
ID theft can range from minor to major. An overcharge or small amount may look innocent, but sometimes that is a test to see if you notice. Then months later, WHAMMO.
The best way to protect yourself from identity theft is to keep your personal details behind a solid and unrelenting wall of common sense. Don't carry your bank account details in your wallet or as a note on your phone. DO have a locked filing cabinet or home safe where you store your Passport, Visas, unused credit cards, bank statements, pay stubs and anything with your NZ Health ID, Military IDs, or account numbers that could be used to impersonate you.
According to Frank Abagnale, who inspired the Spielberg movie, “Catch Me If You Can”, Facebook makes it easy to impersonate you. He advises you do NOT post a clear profile photo, your birthdate, and place of birth. It’s just too easy to find your details in public records or sites like Ancestry.com. Instead, publish a group photo or one with a pet or sunglasses which is not a clear shot of your face. That’s harder for business people who need to post profiles, There are even greater reputational risks of having someone impersonate you on business platforms like Linkedin. Imagine having to explain some weird post sent to thousands of business contacts and followers.
And another thing: all those credit card companies who keep sending you 'pre-approved' credit card applications are on phishing expeditions. They have retrieved your name and address from purchased lists. Shred any applications you receive. Beware of the easy Instant Credit links from your favourite online seller. Just clicking links to a buy-now-pay-later scheme constitutes permission for a credit review which will show up on your credit report as an inquiry, even if they decline you.
Of course, it’s also important to report any SPAM you receive via email or text. I recently received a ‘correct your bank details to receive your tax refund’ from the IRD. It was so real I almost fell for it. Check any text or email asking for details by looking at the return address – click ‘reply’ to reveal it…that 'NO REPLY' title in the sender area may reveal a Nairobi address! The problem with SPAM these days is the sheer amount we get. I trash on average 3 phishing emails a day and even more texts.
It’s also a good idea to NOT answer phone numbers from other countries unless you recognize the number. Unfortunately, as an ex-pat mortgage specialist, I get calls from new clients overseas, so I take the calls. Which means I spend a lot of time interrupting the caller and saying very firmly “NO I did not sign up for your online trading program. Remove me from your database immediately” and hanging up. If you block the number this doesn’t stop them because the callers are using roto dial computer systems so even if you called them back the number will no longer exist. It’s infuriating, I know. Report persistent SPAM calls to your Phone company and Netsafe. If you've got time to hang out on the phone, report it to the company they are impersonating....very few people do. I had to block one persistent email scammer at my server several times who was using greek letters in the reply line to evade detection.
If you are seeking a mortgage, confine your 'shopping' to Banks or licensed Financial Advisers (mortgage brokers). Read their disclosures online and check their license on the NZ Financial Registry. Some lapsed brokers who may have been delisted from the FSPR may linger on the registry (sad but true) so you really can’t be too careful these days.
The NEVER Rules:
NEVER get your financial advice from TikTok
NEVER loan a credit card to a friend
NEVER leave your wallet in your office when you go to a meeting
NEVER use free unsecured wifi sites to check your bank balance
NEVER shop on an unsecured website
NEVER share your passwords with anyone and change them often
NEVER leave your key to your password vault on a sticky note near your desk
NEVER email or text a password or account number – use encrypted servers
NEVER respond to an email or text request for any identity information
NEVER enter your details onto a website without checking the source
NEVER co-sign a note or guarantee a loan for anyone for anything
NEVER open a joint bank account with a new friend
NEVER apply for a joint mortgage without a written property share agreement
NEVER give out your personal details to a lender who doesn't ask you to sign a Declaration and Authority form
NEVER shop online for a mortgage with more than one bank if you value your credit score (online lender 'hits' will lower your score and show up on your report).
NEVER be late on your mortgage payment
NEVER be late on your credit card or other revolving account payments
NEVER max your credit cards (over 40% balance) before you apply for a mortgage
NEVER apply for any new credit cards 90 days before you apply for a mortgage
NEVER close credit card accounts even if you aren't using them (unless required to get a loan)
NEVER fall for a credit card offer from your bank while waiting for your mortgage to close
NEVER buy a car or major appliance while waiting for your mortgage to close
NEVER try to hide a credit card, loan, or bank statement from your financial adviser
NEVER EVER lie to your mortgage adviser about your financial history
I will add to the NEVER list as they arise (and they do). Every day somebody presents a situation inspiring another rule. Feel free to offer your comments or call if you have questions.
Wishing you every credit sanity in this insane world.
© 2022 Susan Templeton Niche Mortgages