Tuesday, December 1, 2015

Keep Your Spirits Bright

The holiday season is upon us, the time of year when we defy our normal spending and travel patterns. A bicyclist in Los Angeles hops on a plane to visit friends in Omaha where they spot a great deal on a putter that they ship to their favorite uncle in Texas. A Memphis lawyer spends Cyber Monday hunting for the best deals on imported wine for pickup in an NYC shop for their former college roommate. Best friends head to Las Vegas for a break from the early Colorado winter.

Why are these activities important? Because banks and credit card processors use automated fraud detection systems that "learn" our normal spending habits and locations then raise alerts on anomalous behaviors. The bad guys look forward to this time of year as much as kids await the season's first snow day. Fraudsters can count on consumers breaking their own models which may slow down these anti-fraud detections, giving criminals more time and flexibility for identity theft.

Some banks are better at detection than others, of course. But the onus isn't completely on them. There are simple steps you can take to protect yourself.

First and foremost, everyone should have a security freeze on their credit. Sometimes called a "credit freeze," this requires your direct participation to grant explicit access to your credit report in any request for information or application against your social security number. It's a bit of a pain to implement because you need to contact all of the "big 3" credit reporting agencies - Experian, Equifax and TransUnion - but the hour or so out of your life is worth the peace of mind knowing that fraudsters can't open new accounts in your name. You can learn more about security freezes at the FTC website here: http://www.consumer.ftc.gov/articles/0497-credit-freeze-faqs

There are other steps you can take to keep the criminal Grinches at bay. Check your bank and credit card activity online more closely during the holidays, at least once a week. And while you're there, enable two-factor authentication ("2FA"), sometimes called "advanced access" or "identification code." This is a huge step in preventing bad guys from brute-forcing and/or phishing your login credentials. You can read more about that topic in my previous post, "What's In a (Pass)word?" Since that post was first published, more online services offer 2FA including banks, email providers and social networks.

With these few precautions, you can spend less time worrying about identity theft, or, worse, cleaning up the aftermath of fraud, and spend more time with loved ones. Happy holidays!