Protecting Your Credit Cards From Identity Theft

There is another way to protect credit ratings and identity - but the Governments around the world won't go for it.  If CRAs were made to work on the basis that the credit and ID data they held was the subject's, not theirs, and that, whenever anything happens that requires a change to their rating, they must contact the subject via a channel separate from the incoming change (e.g. where someone asks for a new account/credit), then the subject is in far more control and it would be more difficult for new account fraud to happen.

Of course, it would drive up the costs of credit, and it would make instant credit more difficult or impossible to function, but even that has a plus point in making it that bit more difficult for the consumer to get into a mess of their own accord.

I don't see why I should pay a CRA to get updates on my credit rating - it' should be up to them to prove that any changes made were valid, by having to check with me first.

This is unlikely to see the light of day unless there is a swell of opinion, which would need to be mobilised...  This is a pity.

Roger, 1000% correct.

"New account fraud, as it relates to credit cards, occurs when someone gains access to your personal identifying information, including your name, address and, most importantly, your Social Security number. With this data, a thief can open a new account and have the card sent to a different address."

If this is all that's needed to open a fraudulent account of credit card, then there is something seriously wrong with the system. If the customer's identity is not reliably verified in the process, customers should not be held responsible for any account activities.

BTW, I found out the perfect way to eliminate credit card fraud on a consumer level: destroy the magnetic stripe of the card. After doing so, the card cannot be copied, and purchases can only be done via chip&pin. Vendors who lack C&P teminals must enter the card data manually to the terminal, which acts as a security measure as well.

For cash withdrawals where the ATM does not have C&P, use a separate debit card that is linked to a separate account where you only carry a small balance for the withdrawals.

Id Theft Prevention, Fraud Alerts...  hhmmm...  Lifelock charges U.S. consumers, $10 per month for annual credit reports and for putting fraud alerts. Lifelock reports to have approximately 980,000 customers. 

In 2008, ID Security Firm Lifelock was sued by a couple of its customers for misleading, deceptive practices.

"The lawsuit alleges that LifeLock is engaged in the "concealment, suppression, and omission of material facts" about its service. The company allegedly fails to make clear that it charges subscribers for an annual credit report that's available to them for free when placing a fraud alert."

""LifeLock does not necessarily protect its subscribers' identities as advertised," the lawsuit claims. "Indeed, the statements by LifeLock's CEO regarding the ability of LifeLock to protect his own identity are deceptive because his identity was stolen while he was a customer and is, upon information and belief, presently being misappropriated by at least 20 identity thieves."

Lifelock was also sued by Experian. Judge ruled for Experian. See Finextra's news item about this : "Judge backs Experian over LifeLock's unfair business practices". Experian states that the placing of hundreds of thousands of alerts is costing Experian millions of dollars a year. 

The judge agreed and granted the Experian motion, stating: "Under the clear terms of the legislative history, any request for a fraud alert "must" be made by "an individual," and not by a company like LifeLock."

But the real story is that Experian although it allows a consumers to put his own fraud alerts for free (for 3 months) and see his own credit report, that it also then sells several other services such as triple alerts credit monitoring, identity theft protection, etc. 

What this says is that giving consumers the ability to monitor and control their IDs (social security numbers, card numbers, bank accounts, driver license, etc.) is something that consumers would pay for. This is great news for banks that are looking for something new that they can offer to their customers.

Oh by the way, this is to Kalle of Nordea - You can also just close your card account. This way, you will not get dedrauded even if someone gets your card number, exp date and CVV.

Zapping your magnetic stripe is easy. Just use one of those fun magnetic items that you slap onto your refrigerator, pass your magnetic stripe over one and voila, your magnetic stripe is dead. Yes, like kalle you can do this if you have no plans to leave Finland or go to a country that only accepts magnetic stripes and signatures (and there still are many countries that accept only magnetic stripes and signatures).