5 Ways You Need To Protect Your Money That I’ve Only Learned From Working In Fraud
Who do you picture when you think of someone getting scammed? I’m guessing it’s someone who looks a lot like your grandmother or aging parent. It might surprise you, then, that according to the Federal Trade Commission, the federal-level fraud fighters, 40% of those age 20-29 who filed fraud complaints reported monetary losses. This is compared to just 18% of those age 70 or older.
I work in consumer protection on the state level. We receive complaints day in and day out from people of all ages, income brackets, and education levels. From identity theft to contractors that take a deposit but don’t show up to work, to businesses that simply never deliver an order, all of these can put you in a messy financial situation. After five years of reading complaints and talking with consumers, I can tell you that, truly, no particular type of person is immune to financial fraud. But we can all do a little more to protect ourselves from it.
1. Use a credit card (but only if you can do so responsibly).
If you’re not in a place where you can use credit without creating or adding to credit card debt, this tip is not for you. But if you’re comfortable using credit, do it. Credit cards generally offer significantly more protections than debit cards. Both payment methods will let you dispute a transaction if something is charged to your account fraudulently or something you order never arrives. However, with a debit card, that cash has already left your account, and it might take weeks for your bank or credit union to reverse the charge or credit your account.
2. Know your card’s transaction dispute policies.
The first step to spotting fraudulent charges is to actually check your bank and credit card statements regularly. The second step is knowing what to do if you spot a fraudulent charge. If your physical card has been stolen or your account numbers have been compromised, you should obviously immediately call to cancel it. But not all incorrect charges require you to cancel your card or change your account numbers. Sometimes you place an online order and it never shows up, but the company won’t issue a refund. Sometimes a subscription provider doesn’t listen when you ask to cancel and continues to charge you anyway.
In these instances, the dispute button is your best friend. When you log in to your account online, most card providers allow you to click on a particular transaction and file a dispute easily with one click and a simple explanation on why you think you’ve been wrongly charged. The trick is knowing the window in which your card provider will allow you to dispute something; for many, the cutoff is 60 days from the date the charge is posted.
3. Freeze your credit reports.
As soon as you finish reading this, head to Equifax, TransUnion, and Experian to freeze your credit reports with all three bureaus. With data breaches galore, there is no good reason not to freeze your credit reports in my opinion, especially now that they are free. These freezes will prevent data thieves from being able to open an account in your name. This also means you’ll need to unfreeze your credit reports should you be looking to open a new line of credit or get a car or home loan — but this is a minor inconvenience compared to identity theft. If you’re a parent or legal guardian, you should also consider freezing your child’s credit reports. If an identity thief were to steal their credit information, it could go unnoticed for years.
4. Watch out for free trial offers.
I love a product sample, but I’ll likely never sign up for another free trial offer. These offers usually come in two flavors – try a product free for 30 days and send it back if you don’t like it or just pay the shipping for this product that is actually a monthly subscription. At best, these companies are hoping you’ll forget to return the product or cancel after the free trial. At worst, these companies deliberately set up a system in which you are unable to return the product for a refund or cancel the subscription you didn’t want to begin with.
5. Student loan saviors are too good to be true.
As much as I’d love someone to sweep away my student loan debt, it’s just not happening. But there are a number of student loan “debt relief” companies out there making false promises that, for a fee, they can reduce your monthly student loan payment or even have it forgiven completely. All these companies do is relieve you of a few hundred dollars and leave you in the same or a worse financial position than you started. If your student loan payments are becoming too much for your budget to bear, talk to your student loan servicer directly. They can help you determine what payment plans or forbearance options are available. Alternatively, you can refinance your student loans with a private lender that may be able to adjust your interest rate, length of your loan, or monthly payment. Just know that you’ll no longer be eligible for federal loan benefits like deferment, forbearance, or public student loan forgiveness.
Bonus: Know where to go to file a complaint.
Despite your best efforts, you might find yourself on the losing end of financial fraud (if you’re on the winning end, then we’ve got problems). Know that you have a backup. On the federal level, you’ve got the Federal Trade Commission and Consumer Financial Protection Bureau to lean on. At the state level, you’ll likely have consumer protection divisions within your state’s Attorney General’s office or Department of Justice. And on the local level, you can always contact local law enforcement if you experience theft, and many larger cities or counties have their own consumer protection offices. While I hope you’ll never need me or someone in my line of work, we’ll be here to help as best we can.
Amanda is a consumer protection investigator and advocate. Outside of work, she can be found watching NCAA men’s basketball, nerding out over spreadsheets or attempting to convince the neighborhood cat to adopt her as his human.
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