This column is about things that go “bump” in the night. The subtitle is “our biggest fears.”
The top few, according to one survey, include public speaking, walking home alone and identity theft. Since the last one has such serious and expensive consequences, it’s been the subject of plenty of sound advice … and more than a little nonsense.
A recent posting on the website of Kim Komando — who also hosts a radio program about all things digital — points out five major myths involving identity theft. The first is that recovery is easy; virtually anyone who’s been a victim will tell you otherwise. Extended fraud alerts, credit freezes and a detailed plan to repair one’s credit will likely consume hundreds or even thousands of hours.
The second myth is that you’ll get your money back. It’s true that many banks and credit card companies will reimburse you for purchases made fraudulently. However, you must meet certain deadlines to protect your rights. There are also limits on what a bank will cover, so check your bank’s policy.
Myth No. 3 is that credit and debit cards are created equal. While protections exist for many fraudulent credit card purchases, a thief with a debit card may as well have a pipeline into your bank account. The thief can withdraw money at will; until you work things out with your bank, that money is gone.
Liability rules are different, too. Report a credit card stolen before it’s used and you have no liability; if thieves do use the card, your liability is limited to $50.
With a debit card, there’s no liability if loss is reported before it’s used. Report it stolen within two days and the limit is $50; from two to 60 days the liability shoots up to $500. After 60 days, you’re liable for all transactions.
Another myth involves the way identity theft occurs. Many consumers mistakenly think it happens only through online trickery. Major data breaches at retailers have exposed at least some personal data of hundreds of millions of customers.
More often than we’d like to think, friends or family members steal identities. Even contractors you allow into your home might make off with credit cards, bank statements or other potentially damaging documents.
The final big myth is that law enforcement can deal decisively with the perpetrators. Unless you know exactly who they are and the police can build a solid case, there’s little chance of bringing these thieves to justice. You should file a police report, mainly to create a record of the theft for your dealings with credit card and other companies. The report could also head off debt collectors.
You can buy identity theft insurance. The Insurance Information Institute says coverage might include lost wages, phone bills, costs of notary services and certified mailing, maybe even attorney fees.
Your homeowner’s insurance may include an ID theft rider already. Adding such coverage might cost another $25 to $50 per year.
Companies that sell ID theft insurance sometimes advertise that they will cover large dollar losses. Read the fine print before buying, so you will know what is covered and what isn’t.
Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s all-volunteer, nonprofit consumer organization. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write Consumer Forum, P.O. Box 486, Brewer, ME 04412, visit http://necontact.wordpress.com or email email@example.com.