Last month, Kim was a victim of identity theft. Somebody used her debit card to make a large purchase of cosmetics.
The thief first tried a couple of test transactions for amounts of $0.01 and $0.00. (How is a $0.00 transaction even possible? I have no idea.) When those worked, she went all-in. She charged $555.90 to the account.
Fortunately, Kim has an excellent bank. USAA both phoned and texted to let her know something seemed suspicious. Then, over the next week, they worked with her to keep disruptions as minimal as possible.
In the end, nobody knows exactly what happened. How did the ID thief get Kim's debit card info? How were they able to buy $555.90 in cosmetics? What's to prevent this from happening again? All that's certain is that Kim lost a great deal of time (but no money) handling this hassle.
Credit Where It's Due
Since the incident, I've been coaching Kim on what she can do to protect herself. We're not taking a comprehensive approach (as suggested in this very thorough identity theft resource at the Personal Finance subreddit). I don't feel like this event warrants more than increased vigilance. To that end, we're taking three specific steps.
- First, it's important that she check her transaction history regularly. Money nerds like me do this several times each week. Kim isn't a money nerd. All the same, I think it'd be smart for her to go online and scan her account statements every Saturday morning.
- Second, I showed her how to access her free credit reports from AnnualCreditReport.com. The U.S. government has mandated that consumers be allowed to view their credit reports from each of the three major reporting agencies once every year. If you'd like, you can obtain reports from all three credit reporting agencies at once. Or, you can stagger your requests, possibly requesting one report every four months from a different agency. (Kim's credit report came back clean — nothing unexpected.)
- Finally, I had her sign up for a free account at Credit Sesame. Credit Sesame is one of many online tools to monitor your credit score. (I like that it analyzes which parts of your credit score or strong and which are weak.)
We didn't find any additional problems. The cosmetic purchase appears to have been a one-time thing. (Or maybe the quick action from Kim and USAA managed to prevent additional problems.) We'll keep a close eye on Kim's accounts for the next several months, though. If other problems occur, we'll escalate the protective measures.
On a lark, I checked my own credit score with Credit Sesame. Drat! I came in at 810, fourteen points lower than Kim. As always, I'm penalized because I don't have enough sources of credit. If I could get a mortgage (like I want), my score would be better.
Still, I shouldn't complain. My credit score has increased a few points this year. (My credit score was 804 when I got a new credit card in February.)
Deter, Detect, Defend
If Kim's situation had been more severe, we would have used the U.S. Federal Trade Commission's excellent site devoted to helping people recover from identity theft. The site includes a comprehensive list of steps to take if you believe your ID has been stolen. It will also walk you through the process of creating a personal recovery plan.