One of the most scariest types of identity theft is new account fraud. It happens when an identity thief steal your personal information, open a series of new credit card accounts, loans or other account under your name. According to a new Federal Trade Commission (FTC) study, 8.3 million U.S. adults become victims of ID theft each year. Consumers Union estimates that this amounts to more than 22,000 victims per day and 15 victims per minute. After you are a victim of ID theft, the out of pocket cost varies widely but 10% percent of all ID theft victims reported costs of $1,200 or more, and 10% of victims of new accounts and other frauds reported out of pocket costs of $3,000. One quarter of all new accounts victims reported expenses of at least $1,000. More than half of consumers (56%) who suffered new account fraud did not discover the fraud until after the first month, and for 24% of consumers, it took more than six months to discover new account fraud.

I wrote a post about credit freeze and mentioned how to use credit freeze to prevent identity theft. Today I’m going to write more details about this. Because credit freeze is very useful to prevent ID theft.  A credit freeze, also known as a security freeze, credit report freeze, a credit report lock down, a credit lock down, or a credit lock, allows an individual to control how a U.S. consumer reporting agency (Equifax, Experian, TransUnion) is able to sell his or her data. The credit freeze locks the data at the consumer reporting agency until an individual gives permission for the release of the data. In this way, a credit freeze allow us to stop thieves from getting credit under our names. When we choose to freeze our credit, a business will not be able to open new accounts for a thief until you permit to do so. Placing a credit freeze does not affect your credit score – nor does it keep you from getting your free annual credit report, or from buying your credit report or score.

When you place a security freeze on your file, you will be provided a personal identification number or password to use if you choose to remove the security freeze from your file or authorize the temporary release of your credit report for a specific person or period after the security freeze is in place. The cost of placing, temporarily lifting, and removing a credit freeze also varies.  Identity theft victims might get free credit freeze in many states while other consumers might have to pay $10 for this service. As the credit freeze laws varies according to states, you can find more helpful information from here. Once you decide to temporarily lift your freeze, you have to contact Equifax, TransUnion or Experian and provide the following information:

1. Sufficient identification to verify your identity.
2. Your personal identification number or password provided by the credit reporting company.
3. A statement that you choose to remove the security freeze from your file or that you authorize the reporting agency to temporarily release your consumer report.

It’s very obvious that a credit freeze is very helpful to keep an identity thief from opening most new accounts in your name. However, it’s not an all-purpose solution to all kind of identity theft. It will not protect you from an identity thief from using your current credit cards or other accounts. It is also helpless when a identity thief wants to use services that don’t do a ID check in your name. If there’s identity theft already going on when you place the credit freeze, the freeze won’t be able to stop it. You should also consider the cost and hassle that credit freeze might bring in before you place a credit freeze on your credit report.

Many of you might not know that you can protect your identity with a virtual credit card number when you’re shopping or paying bills online. These one-time use credit card numbers are linked to your actual credit card number, but are unusable by others or will be expired in a certain time period. If someone was able to obtain your virtual credit card number and try to use it elsewhere, it simply would not work. In this way, you can simply protect you and your identity. You don’t have to bother your credit card costumer service and fill in some forms. Virtual credit card number actually is named as Controlled Payment Number when it came out. A Virtual Credit Card Number can also be called as a “substitute credit card number” or “one-time use credit card”. It’s usually generated through the use of a web application or a specialized program offered by your credit card issuers.

Typically, a virtual credit card number has a limit and an expiration date between 2 to 12 months chosen by the account owner and can be used for many times with the same merchant. (can’t use it with many merchants) You real credit card number will never be revealed to the merchant. There are many credit card companies (Citi, Discover, Bank of America) offer this kind of service for free to their customers. I will briefly introduce each of them below:

Citi Bank—Virtual Account Numbers

This is a security feature of Citi credit cards. Whoever has a Citi credit card is eligible to use virtual account number as long as he/she has registered his/her credit card online. Generating a virtual account number is very easy in your Citi online account. Log in to your online account and select “Get a Virtual Account Number” on your screen. You can choose to download a software or opt for the online program which requires you to log in your account each time you need to generate a virtual account number. After you enter you real credit card number, the tool will automatically generate a new number for you. You can decide when the virtual credit card will expire between 2 to 12 months but on longer than the actual expiration date of your real credit card. If you want to change the expiration date, you have to generate a new credit card number. The virtual account numbers can be used when the purchases don’t require the presence of a physical credit card. You have to allow pop-up windows when use this program.

Discover Card—Secure Online Account Numbers

The Secure Online Account Number is a free service that providing additional online security for Discover card members. Like Citi’s virtual account numbers, you can choose to download the software (PC version) or use a online web application (browser version) to generate a virtual account number every time when you need one. For the PC version, download the tool and it will automatically launch each time you go to make a purchase. Click the “Fill Form” button, and a secure account number, Valid Through (Expiration) date and CID (security code) will be generated and automatically entered into the “Credit Card Number” field(s) of the online merchant’s checkout form. For the browser version, you have to follow these steps:

1. Click “Launch Now” button on the Secure Online Account Numbers main page to get a secure number. Sign in with your Account Center user ID and password.
2. Open a new browser window so you can view both Discovercard.com and the shopping site at the same time.
3. Shop at your favorite Web sites, copy and paste the secure number into the retailer’s checkout page. When ordering via phone, give the customer service representative the secure number.

According to Discover card:

Secure account numbers always expire on the same date as your actual Discover Card account number. When your Discover Card is reissued with a new expiration date, it will be necessary to update the expiration information on any retailer’s Web site where you have stored your actual card number or any secure account numbers.

Bank of America—ShopSafe

ShopSafe is a free service that can generate a temporary credit card number every time you want to make an online purchase.This number links directly to your real credit card account number but keeps your card number completely private and completely protected. The ShopSafe number is used as another credit card number but the merchant will never know your actual account number. To get ShopSafe, sign in to Online Banking and choose “Use ShopSafe” from your Account Activity screen. You can enter desired spending limit and expiration date there. And then ShopSafe creates a temporary account number that allows you to purchase with confidence. The ShopSafe service allows you to set your “Valid Thru” date for up to 1 year in the future.

Note: American Express card is not eligible to generate a virtual credit card number from above card issuers.

When you are not confident with some online merchants, you can use virtual credit card to help you prevent any credit card fraud.

“Can You Refuse to Show ID with Visa Credit Card?” turned out to be a very interesting post at MyCardBlog.Com. According to the official document from Visa, you can refuse to show your ID to a store clerk at checkout as long as you’ve signed your credit card. All they can do is to keep your credit card and verify your signature. Actually, most of credit card issuers require that merchants should not check your ID at checkout. The reason is very simple: if you show your ID and credit card to a store clerk, you’re potentially to be an identity theft victim. However, the truth is you are frequently asked to show your photo ID to a store clerk at checkout. The retailers seem this is a good strategy to avoid losses from fraud. (Once a credit card fraud happens, retailers will take the cost while card members will be protected by laws.) You’d better think twice before showing your driver’s license. A driver license and a credit card can give a splenetic store employee a good chance to steal all of your personal information.

The retailers are seeking ways to curb the losses from fraud. Our consumers are trying to avoid identity theft. Yes, you want to protect you privacy and personal security by not revealing you address, birth date, and other information contained on your driver’s license to a stranger. Here are some tips we should know:

1. MasterCard, Visa, and Discover network prohibit retailers from requiring ID with a signed credit card. American Express discourages retailers to require ID at checkout. The information can be found at privacyrights.org/ar/Alert-FS15.htm. If possible, you can print out related material and take it with you.

2. Once you are required to show your ID to a store clerk, you can call MasterCard at 800-MC-ASSIST (800-622-7747); Visa at 800-VISA-911 (800-847-2911); Discover at 800-DISCOVER (800-347-2683); American Express at 800-528-4800. You may let the customer service representatives to convince the store clerk.

3. Refuse to shop at this store. You can always buy the same merchandise at different retailers. You can also shop online!

4. The last choice is to pay with cash, although cash will not bring any additional cash back and insurance protection to what you paid. Anddon’t forget to file a complaint to Visa, MasterCard, Discover, and American Express.

I received an interesting complaint from one of my readers. He currently has Chase Freedom Visa Card, Starwood Preferred Guest Card from American Express, Citi Diamond Rewards Card and Citi PremierPass Card. I think we can learn a lesson from his story. Here is the story:

I went to XXXXX (deleted by me) Buffet with some of my friends on May 3rd to eat. After our meal I went to the counter to pay and used my Chase Freedom Visa Card as payment. The cashier asked me to show ID to her and I kindly declined this request. I was then told that they were not going to be able to finish this transaction without my official government issued ID. I insisted that they should not see my ID because I have already signed on the back of the card and they can just check my signature. However, the owner of that restaurant was getting angry when I argued with him. Then he called the police and asked the police to arrest me for not paying for the dinner! I was fully embarrassed! I has 2 credit cards in my wallet at that time. After a while, one of my friends paid the money with his credit card along with his ID.

After reading his story, I looked up some visa card agreements and found out that it’s a violation of their credit card merchant agreements to ask for ID in order to complete a transaction. As it’s cleared stated in an official VISA statement: Stores can’t deny a transaction unless the credit card itself is unsigned.

Merchants may not refuse to honor a Visa card simply because the cardholder refuses a request for supplementary information. The only exception is when a Visa card is unsigned when presented. However, “See ID” is not considered a valid signature. In these situations, a merchant must obtain authorization, review additional identification, and require the cardholder to sign the card before completing a transaction.

To report any merchant practices that you feel are inappropriate, please notify the disputes area at the financial institution that issued your card account. Your card issuing bank has access to the appropriate Visa rules and regulations as well as to the Notification of Customer Complaint forms which should be used by your bank to document and file merchant complaints.

As an alternative, you may contact the Global Customer Care Services to report merchant practices that you feel are inappropriate. Please contact the Global Customer Care Services at 1-800-VISA-911 (1-800-847-2911). Please advise them that you were referred to file a complaint. The staff will be able to initiate a complaint form over the phone.

Next time, when you was requested to present your photo ID with your visa card purchases, you can just deny it. You’re officially protected by the visa!

I got this information from the front page of this week’s staples flyer. Right now, if you sign up privacy guard service at www.privacyguard.com/staples20, you can get a $20 staples gift card plus a free 1-month Privacy Guard identity Theft Protection.

What can you get from Privacy Guard?

Daily Credit Monitoring—They will monitor your credit report for certain signs of activity through a major credit reporting agency. And you’ll be quickly alerted should a change be detected.

Monthly Credit Scores and Reports—You can get credit reports and credit scores from 3 credit bureaus every month.

Personalized Fraud Services— Should your identity be stolen, you’ll be assigned a personal fraud specialist who will work with you to help restore your good name.

Offline Financial Tools—Privacy Guard offers some tools which you can access in your account.

You can try your service for free at the first 30 days, and then you will be billed $11.99 each month if you want to keep the service. You can receive the gift card through mail simply by fill in the form sent by them. The service is provided by Trilegiant. According to my experience, the cancellation process is no hassle. But you’d better write down the operator’s ID number and time.

Recently I received many emails from so called “Bank of America” which said there were some unauthorized activities about my account at Bank of America. I also heard that someone really took it as real and revealed their registration information. If you look closely at their email address—<pp-verify@yahoo.com>, <bankofamerica@yahoo.com>, and <bankofamerica@google.com>—you can immediately make a judgment by yourself. A very ridiculous thing is that I click the link they offered and, do you know what I put in? I put in words like “bitch, 911, FBI, F**K you”, as my name, SSN, address, and phone number and then I can submit the information at last! Hmm……but we should be aware that the website is similar to the real Bank of America web. Here I put one of the email I received:

Dear Bank of America client,
You have received this email because you or someone had used your account from different locations.For security purpose, we are required to open an investigation into this matter.
In order to safeguard your account, we require that you confirm your banking details.
The help speed up to this process, please access the following link so we ca complete the verification of your Bank of America Online Banking Account registration information.
http://0xd20e5fb6/icons/…/www.bankofamerica.com/sslencrypt218bit/online_banking/ (see the link!)
If we do no receive the appropriate account verification within 48 hours, then we will assume this Bank of America account is fraudulent and will be suspended.
The purpose of this verification is to ensure that your bank account has not been fraudulently used and to combat the fraud from our community. We appreciate your support and understanding and thank you for your prompt attention to this matter.

I don’t know next time they will send me emails under which bank’s name….But I won’t fill in my personal information as required from every email. I hope you also won’t give away your personal information. We have phone and we can call them.

Upromise.com is offering free one year Identity Theft Protection plan for us. However, you can’t see the credit report in this plan. They will notify you whenever there is a change in your credit report. It’s really nice for them to do this. Nowadays, we have to pay to enroll in the credit monitoring plans at least fot $100 per year. To join this protection, you can join the Upromise program (here) or you don’t have to join it. (here) Most of us may not be familiar with Upromise. Upromise is a college service provider that helps families earn, save and pay for higher educations. Joining their program is free—sounds like non-profit organization. You can get lots of benefits from them.

By the way, Citi is providing Citi Upromise Platinum Select Mastercard which will give you 1% cash back on everyday purchase and 10% cahs back on 7000+ grocery and drug stores. It also provides 0% APR on balance transfer without a transaction fee. For those who wants to take advantage of the 0 APR on balance transfer offer it’s a good choice.

Here is another video shows you can’t be too carful when you are eating at a restaurant. Be careful about any suspicious behaviors!

We should always be careful about our credit card. DO NOT simply give our card to anyone. See the video