By Cheryl Winokur Munk
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (April 9, 2018).
These days, financial fraud is everyone's problem.
Roughly 16.7 million U.S. consumers had their identities
compromised in 2017, resulting in $16.8 billion in losses,
according to consulting firm Javelin Strategy & Research. The
number affected was up 8% from 2016 and the highest since Javelin,
a unit of Greenwich Associates LLC, started tracking identity fraud
in 2003.
Some consumers may be more aware of the widespread potential for
fraud after last year's Equifax breach, which exposed the personal
information of nearly 148 million, including an additional 2.4
million who were recently identified. Others, however, remain
unaware of the potential dangers.
How much do you know about financial fraud? Take our quiz to
find out.
1. True or false: Fraud victims tend to be older and less
educated.
ANSWER: False. A 2016 study from the Better Business Bureau
found that people between the ages of 25 and 34 are the most likely
to lose money to fraud. And more than half of those who lose money
due to financial fraud have a college degree, the study showed.
2. True or false: It is expensive to protect oneself against
identity theft.
ANSWER: False. There are several low-cost, or free, ways people
can guard against identity theft. For instance, federal law
requires each of the three major credit-reporting firms -- Equifax,
Experian and TransUnion -- to provide individuals with a free
credit report once a year. People can request their report online
at annualcreditreport.com, by calling 1-877-322-8228 or by mailing
their request via the U.S. Postal Service. People can space out
their requests to receive one report every four months, for
example.
Another free protective measure: Carefully reviewing monthly
credit-card, bank, retirement, brokerage and other account
statements; consumers can monitor account activity more frequently
if these records are available online. Consumers also should review
their explanation of benefits statements from health-insurance
providers and swiftly alert their insurer and medical providers if
they see treatments they never received, according to the Federal
Trade Commission.
3. People who suspect a security breach, should immediately:
A. Place an initial fraud alert with one of the three
credit-reporting companies.
B. Close all their bank accounts.
C. Cut up their credit cards.
D. Do nothing.
ANSWER: A. A good first step is to contact one of the three
credit-reporting firms to place a fraud alert on your credit
report. Ask that company to report the request to the other credit
firms. Once an alert is placed on a credit report, a business must
verify the consumer's identity before issuing credit. The initial
alert stays on the report for at least 90 days and can be extended,
all at no cost to the consumer. Placing an alert also allows
consumers to order one free copy of their credit report from each
of the three credit reporting agencies, regardless of when they
last requested a report.
4. True or false: Hiring a third-party company will guarantee
one's identity is never stolen.
ANSWER: False. Many companies refer to their services as
identity-theft protection services, but it's a misnomer; Even a
paid company can't prevent people from having their personal
information stolen, according to the FTC. Deciding whether to hire
a service to monitor credit is a personal choice that requires a
careful cost-benefit analysis.
Generally, there are two types of paid services: Monitoring
services watch for signs that an identity thief may be usurping
personal information, such as a bank account number or Social
Security number. Recovery services, by contrast, are designed to
help individuals regain control after identity theft has already
occurred.
5. True or false: Wiring money or using reloadable payment cards
are among the safest ways to avoid fraud when paying for items
online or over the phone.
ANSWER: False. Wiring money or using reloadable payment cards
are considered some of the riskiest ways to pay because it's nearly
impossible to get your money back in the event of fraud, the FTC
says. Credit cards have more fraud protection built in; some even
offer you the ability to create unique numbers with a specified
spending and time limit to use for online purchases.
6. When it comes to credit-card fraud, your liability under
federal law is typically capped at ______.
A. $250
B. $1,000
C. $25
D. $50
ANSWER: D. Under federal law, a consumer's liability for
unauthorized charges on a credit card is $50. However, consumers
who report the loss promptly, before the card is used, aren't
responsible for any charges they didn't authorize, according to the
FTC. The maximum loss for debit cards ranges from zero to a
complete loss of funds in accounts linked to the debit card,
depending on how quickly the card is reported lost or stolen,
according to the FTC.
7. One good way to make online accounts more secure is to
______________.
A. Reuse the same passwords for multiple accounts.
B. Use multifactor authentication.
C. Respond to emails that ask for personal information.
D. Both B and C.
ANSWER: B. Multifactor authentication requires more than one set
of credentials to verify a user's identity. That could mean a
combination of a password, pin, special login code, biometric
authentication or hardware token. It is considered more secure
because if one factor is compromised, there is still an additional
layer of protection, making it harder for thieves to steal personal
information.
8. Financial abuse is estimated to cost seniors $2.9 billion a
year, according to a MetLife study cited by the National Center on
Elder Abuse. More than half of financial abuse in the U.S. is
committed by family members, caregivers and friends. Red flags of
possible abuse include ______________.
A. Unusual activity in an older person's bank accounts such as
large, frequent or uncharacteristic withdrawals, or unusual
credit-card activity.
B. Checks written as "loans" or "gifts" to unfamiliar people or
charities.
C. Evidence of newly opened accounts that the senior doesn't
seem to need or understand.
D. All of the above.
ANSWER: D. Family members or friends who notice any of these
activities should speak to their loved one right away to try to
determine if something is amiss, according to tips provided by the
American Bankers Association. Suspected fraud should be reported to
the bank and the local Adult Protective Services, the ABA says. As
added protection, family members can request that their loved ones
list them as a "trusted contact" on brokerage accounts, so they can
be informed if financial exploitation is suspected, thanks to
Financial Industry Regulatory Authority rules that took effect
earlier this year.
Ms. Winokur Munk is a writer in West Orange, N.J. She can be
reached at reports@wsj.com.
(END) Dow Jones Newswires
April 09, 2018 02:47 ET (06:47 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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