Several years ago, my identity was stolen. It took several years to get everything straightened out but I still worry about it. When I changed banks to PerkStreet recently, for a short period of time, I didn’t have my identity theft protection in place because I forgot to change the debit card I used to set it up. When I realized I wasn’t protected –  honestly, I freaked out until I could get my ID theft protection back in place. I was bitten once and it forever changed the way I view identity theft protection.

How identity thieves use your personal information

Once someone has accessed your personal information, he or she can exploit that information in a wide variety of ways, ranging from simple fraud (intentional deception for personal gain) to criminal impersonation to illegally using benefits that are rightfully yours. Knowing how identity thieves might use your information is an important step toward defending yourself.

ID thieves can use your information in at least TEN ways:

1. Make purchases
2. Withdraw funds
3. Change the address on file with your creditors
4. Open new credit accounts
5. Obtain medical services
6. Get services like utilities or cell phones
7. Create false identification
8. Get a job
9. Use your name if they’re arrested
10. Receive your benefits

Make purchases or withdrawals

With even the smallest amount of information in hand, a thief can exploit your existing bank accounts, run up debt, or living the high life at your (and your credit card company’s) expense. These fraudulent buying sprees may include expensive high-end items such as computers and other electronics, which the thief can quickly and easily re-sell for cash.

Withdraw your cash

With the proper credentials or information, a thief can withdraw money from your savings, checking, or investment accounts via ATMs, checks, online payments, or an electronic transfers. This money can then be used to do everything from buy drugs to finance illegal arms shipments to make the thief’s mortgage payment. How does THAT grab you?

Change your address

A thief can change your credit card billing or home mailing address by calling your credit card company or filling out a change of address form at the post office. Once your address has been changed, the thief can:

• Prevent you from learning of fraudulent purchases and accounts right away
• Collect the abundant personal information contained in your daily mail
• Receive and respond to preapproved credit card offers
• Receive new credit cards and checks that have been sent to you
• Receive your tax refund, social security checks, or any other mailed income

Be vigilant about your mail. Know what you should receive and when each month.

Don’t wait until you’re a victim. Stop ID theft today. Right now. Click HERE.

Open new accounts

An identity thief can use your Social Security number and other identifying information to apply for and open new credit accounts in your name. Types of accounts thieves tend to open are:

• Credit card accounts
• Checking accounts
• Car loan or other loan accounts

Thieves typically make account applications using a fraudulent address, preventing you from learning of the accounts’ existence right away. When these accounts go unpaid and become delinquent, a collection or repossession agency might be notified, and the delinquency will be recorded on YOUR credit report, damaging YOUR credit score.

Obtain medical services

Thieves have been known to use your information to obtain medical services at emergency rooms. They typically will use your medical insurance card to run up huge bills for fraudulent injuries or use your insurance to obtain prescription medications which can then be sold … or used. These huge bills can have a very detrimental effect on your employer, who usually handles your medical insurance. How? One of the determining factors for insurance premiums is the group’s claims history. If an ID thief ran up a $50,000 medical bill using your information, you, your employer, and your employees could be paying for it through higher premiums next year.

Establish services

Thieves can use your name, a fake mailing address, and other personal information to set up service accounts, including:

• Utilities (gas, electric, oil, water, etc.)
• Cable or satellite television
• Telephone or cell phone
• Internet service

When the thief fails to pay, guess who’s credit is damaged?

Create false identification

The manufacture and sale of false identification is a thriving underground business. Thieves who want to create false driver’s licenses and IDs try to get access to what is called “breeder documents” — documents containing personal information that can be used to create a variety of different types of false ID. The most sought-after breeder documents are:

• Social Security cards
• Birth certificates
• Passports

Thieves can use these documents to commit various types of fraud, such as:

• Altering or selling existing identification – Stealing your driver’s license or passport and then attempting to alter it, or selling it to someone who will alter it.
• Creating counterfeit identification – Using the information in your documents to create authentic-looking identification using readily available technology, such as scanners and personal computers. These fake IDs probably wouldn’t hold up to the scrutiny of most law enforcement officers but will easily get by a busy cashier, typically untrained in security issues.
• Obtaining fraudulent identification through a legitimate venue – Using your personal information and documentation to obtain a driver’s license or passport that shows the thief’s picture but your name. These will get past law enforcement.

Get a job

Thieves who cannot secure employment with their own identity (due to a criminal record, residency status, etc.) may try to secure employment using your name and SSN. When the employer reports the thief’s earnings to the IRS on your SSN, the government may think you’ve failed to report all your income. If the thief files a tax return to obtain a refund, it will appear as though you’ve filed twice. Talk about a fiasco. Then guess who would be expected to show up at the IRS audit?

Use your name when arrested

In the most insidious cases, a thief may use your identity when stopped, questioned, or arrested by law enforcement. If the thief’s scam is successful, the consequences of the thief’s actions can affect you personally. For instance, if the thief receives a traffic ticket, the points will accrue on your license. Or worse, if the thief fails to show up for a court date, an arrest warrant could be issued for YOU.

If you later apply for a job, your application could appear to have conveniently omitted the felony “you” had, should a background check be performed.

Your reputation is at stake. Protect it with GoIdentityProtect.com today.

Get your benefits

Identity thieves can use your information to obtain your Social Security benefits, pension monies, or other benefits that are rightfully yours to obtain. In one case I read about, an identity thief filed for, and received an elderly widow’s Social Security benefits. The scam was so successful that the district attorney believed the thief was the true owner! Only after the widow used a lawyer to fight back was the case resolved and the thief jailed.

How can you deter identity thieves?

1. Never give out personally identifiable information unless you know who you’re giving it to, how they’ll use it, and how they’ll protect it.
2. Guard your identity, treating it as a precious asset. It is.
3. Join me in signing up for identity theft protection. For my money, nothing beats that peace of mind.

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It can, if you know how to do a few tricks with algebra. Why point this out? If you aren’t paying attention, you can be tricked into believing all sorts of crazy things, from financial scams like the one that Bernie Madoff pulled to the latest conspiracy theory. In the end however, logic and reason usually prevail. In the meantime, brush up on your high school math skills for a moment and examine the following:

Given that a = b

1. 3a = 3b and 11a = 11b
2. Multiply by a on both sides, 3a^2 = 3ab
3. Multiply by b on both sides, 11ab = 11b^2
4. Subtract the above equation from the one in step 2, 3a^2 – 11ab = 3ab – 11b^2
5. Subtract 3ab and add 11ab to both sides, 3a^2 – 3ab = 11ab – 11b^2
6. Add ab and subtract b^2 from both sides, 3a2 – 3ab + ab – b^2 = 12ab – 12b^2
7. Factor out common factors, 3a(a-b) + b(a-b) = 12b(a-b)
8. Divide both sides by a-b, 3a + b = 12b
9. Subtract b from both sides, 3a = 11b
10. Substitute a for b, remembering that they are equal, 3b = 11b
11. Remove common terms and 3 = 11

Did you see that? Three DOES equal eleven? … Ha ha! It really didn’t matter which numbers I used so long as they were different. I could just as easily made $12 equal $300 million. Where does this simple equation go wrong? When we “factor out the common items” in step 7, we’re actually dividing by zero and any one who passed 5th grade math can tell you that dividing by zero is a big mathematical NO-NO.

But it’s easy to get caught up in the moment and overlook that step because the rules violation is hidden. What’s always odd is that sometimes the most important, most common sense rule can get obscured by technical mumbo-jumbo, quickly glossed over, and ignored by someone who should know better.

Such is the case with most scams. They lure us in with an outrageous claim (“make $50,000/yr stuffing envelopes at home!”) just like the 3 = 11 title. Then they convince us that we really can “buy a home with no money down,” or “join this multi-level marketing ‘business’ and become rich in 12 months,” or even “I am a Nigerian prince who needs to hide $700 million in your bank account for a few days.”

But, if you’ll take your time, examine the claims slowly and with a discriminating eye for detail, you will usually find that one fatal flaw. Or you could use the old pessimist’s rule: if it sounds too good to be true, it probably is.

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Regardless what you think of him today, Tiger Woods has been taught a lesson we all need to learn: Just because you’re “somebody,” just because you work hard, just because you’re talented, just because other people like you, just because certain temptations are available to you, doesn’t mean you’re allowed to give in to those temptations.

I felt that I had worked hard my entire life and deserved to enjoy all the temptations around me. I felt I was entitled.

Don’t we say the same things about our money as Tiger did about his marriage and personal life?

We think “I’ve worked hard, I deserve that new wardrobe.” But at the same time, our clothes budget is maxed out.

We think “I’m a vice-president at my company and I deserve that new entertainment system.” But we’re constantly funneling money back and forth from our savings account (and credit card cash advances) to checking just to cover our inability or unwillingness to budget.

We say “I’m entitled to have that new car.” When we can’t even afford the car we’re driving now.

We think “It’s not really MY fault that I overspent on dining out because my friends know that when I’m asked to join them, I just can’t resist.” And we shift the blame for our own actions over to someone else simply because we can’t find it inside ourselves to say no.

Our budget-busting actions hurt others in our lives too. How much stress would be lifted from your shoulders if your emergency fund was filled with six or eight months of living expenses? How would that stress relief affect your relationship with your children, with your spouse, with your boss?

How would your relationships change for the better if you no longer lived paycheck-to-paycheck and used YNAB to give direction to every dollar your earned?

So, as Tiger Woods makes his comeback at the 2010 Master’s golf tournament, let’s all remember the lessons he was painfully taught and apply them to our own lives. Chief among these lessons? Don’t let a sense of entitlement creep into your thinking.

And let whoever is without sin cast the first stone …

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Earthquakes, floods, and forest fires know no season. Spring tornado season is just around the corner and soon thereafter, we enter hurricane season. If you were thrown a curveball and had go through a hurricane, tornado, earthquake, flash flood or forest fire – would you be financially prepared to weather the storm?

Natural disasters serve as reminders that we all need to be prepared, no matter the source of the disaster. What to do?

1. Take a home inventory.

Go room by room and record a visual inventory of your possessions on a video camera or still camera. Describe the item in your own voice, recording its cost and when you bought it as well as any serial numbers or model numbers. Photograph your landscaping, patio, outdoor furniture, fencing, and sprinkler system and include automobiles, boats, or RVs. Review your inventory every two to three years to keep it up-to-date and augment the video or photographs with a written record. List each item and its value as well as any identifying numbers where appropriate. Put your inventory records in a safe place such as a safe-deposit box.

2. Keep copies of all financial records in a very safe place.

Scan your financial documents (mortgages, life insurance policies, other insurance policies, copies of your drivers license, passport, credit cards, everything) and burn them onto a CD in pdf format, then keep this CD in a safe deposit box. An alternative strategy is to use something like Mozy Online Backup which offers up to 2 GB of free storage or unlimited storage for only $4.95/month. All you have to do then is remember to scan and save to your hard drive.

3. Update your homeowners insurance.

It may seem obvious to you and me, but believe it or not, most people are either not insured at all or severely under-insured on their homeowners insurance. According to the Federal Emergency Management Agency, only 25 percent of the 10 million American homes that lie within high flood-risk zones carry flood insurance, despite the fact that homes are four times more likely to be damaged by flood than by fire.

4. Be sure you have the right kind of insurance coverage.

Your first line of defense is your homeowners insurance so make sure you’ve examined your insurance coverage before disaster strikes. What you don’t know CAN hurt you in the long run. For example, there’s a big difference between replacement and reimbursement cost. If your 3-year-old flat screen television is destroyed in a flood, does your coverage pay to replace it or only pay you based on it’s current, depreciated value (much less)? Some policies only cover the structure so make certain you cover the contents of your home, as well as the structure. If you’re a renter, buy renter’s insurance because the landlord’s insurance won’t cover damage to your possessions.

5. Beef up your emergency fund.

If you find yourself going through a disaster, having a three to six month emergency fund will be a lifesaver. Don’t delay in starting your fund as soon as possible. Use my Sneaky Savings Strategies to help you pump cash into your fund and don’t be afraid to get creative in your own savings ideas.

We all hope we never have to weather such a storm, but by taking a few smart precautions, a punch in the face by Mother Nature won’t knock you out.

Note: This article was included in the Carnival of Personal Finance – Blogthority.com Relaunch Edition! Make More Money Blogging edition! Thanks Mike!

Photo by smiteme

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There is no such thing as a recession proof job.

With the incredible amount of unemployed people vying for a position and thousands more losing their jobs on a weekly basis, it makes no sense to view your job as a lock. Your employer doesn’t. Since December 2006 (quick, think back to what other significant event occurred in late 2006), unemployment rates have risen from 4.4% to 10% at the end of 2009 (Bureau of Labor Statistics).

Books about “recession proofing” your job are flying off the shelves while the REAL unemployment rate is hovering north of 16 percent. Those numbers include people who have just given up or who aren’t working full time when they wish to. Unemployment among teens, those without high school diplomas, and minorities are even higher.

Understanding what your employer wants is critical and though each employment situation is unique, there is a definite benefit to knowing how to hang on to your job. What is your employer looking for? Here’s a general list of what employers look for in candidates that are applying for positions at your company and what they want to see in you.

What employers want:

• A record of achievements that match well with your employer’s greatest wants and needs. Nothing trumps having successfully “been there, done that,” so long as it’s relevant to what your employer wants.
• Intelligence, business savvy, and a willingness to learn.
• Honesty, integrity, and decency.
• A team player who meshes well with the company’s team and can integrate with the company’s culture.
• Likability, a positive attitude, and maybe a sense of humor. Be careful here, the wrong humor can get you in trouble.
• Excellent communication skills whether speaking, writing, talking on the phone, or using email.
• Dedication, flexibility, and a willingness to go the extra mile to achieve excellence.
• A goal setter with a clear sense of purpose.
• A high level of motivation and the enthusiasm to back it up.
• Confidence and leadership with an air of equanimity.

There are no guarantees. And while there may not be any such thing as a recession proof job, by knowing what your employer wants, you might be able to save your job … or more easily find another one.

Note: This article was included in the Carnival of Personal Finance #249 at Amateur Asset Allocator!

Photo by viZZZual.com

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