Credit & Identity Theft Blog

A recent ABC News / Washington Post poll found that seven in 10 adults are worried about falling victim to online identity theft.

While technology and the internet provide convenience, most people feel that convenience comes with a price - namely, privacy and security. Here are some of the poll's findings:

57% of American adults feel that the internet greatly diminishes personal privacy (up from 42% in 2005 and 38% in 2000).

72% worry that their personal information could be stolen online.

84% think businesses should do more to protect customers' private information.

As consumers hear more and more reports about data breaches in which fraudsters gain unauthorized access to their information, privacy fears swell. Many polled expressed concern about the transfer of their private data due to recent bank mergers.

Interestingly, identity theft numbers are down this year, indicating the increased fear is unwarranted. 22% polled said they had had their credit card stolen or used to make unauthorized transactions - the exact same percentage from 2005.  Granted, 22% is a huge number of ID theft victims, but at least it hasn't grown in the past 4 years. 

For more facts and figures, visit our Official Identity Theft Statistics page.

This guest post comes from Thomas J. Fox. Thomas is the Community Outreach Director at Cambridge Credit Counseling Corp. He is an AFCPE-accredited credit counselor and IFL Certified Educator in Personal Finance who, over the last decade, has created a number of guidebooks, DVDs and educational curricula designed to educate young people and low-income individuals about personal finance. Mr. Fox also co-hosts Money America, a weekly radio program that airs on WAIC 91.9 FM.

If you’re like most Americans, there are probably a lot of things you wish you knew before our current recession hit. Perhaps you had too much debt, or not enough savings, and as a result found the economic downturn especially difficult to navigate. Don't worry - you're not alone. Most Americans are guilty on both counts. Before the recession hit, our country held almost $1 trillion in credit card debt, and our personal savings rate had hit an all-time low of negative 2.7%. While we all wait for a time machine to be invented, we should use this latest crisis as an opportunity to learn how to make better financial decisions.

Financial education

Everyone agrees that a well-rounded education is the foundation of success, so it’s more than a little surprising that only seven states require courses in personal finance. Many experts have cited this oversight as a contributor to the economic crisis. Why? Because many people were simply unprepared to deal with the choices they faced. Should I rent or purchase a home? If I buy, what kind of mortgage should I get? What’s the best way to save for my child’s college tuition? Should I settle my debts, or pay them down responsibly? How much will I need for retirement? The good news is there are organizations out there that can provide you with the financial knowledge you need to answer these and a host of other tough questions, and they’re only a phone call away.

Credit counseling

Many people mistakenly think that credit counseling agencies simply provide debt management plans, but, in fact, the more established organizations generally offer a variety of other programs, including housing counseling – a service that a lot of displaced homeowners wish they had used before they signed up for an exotic mortgage they couldn’t really afford. The most reputable agencies are staffed by certified credit counselors who offer free financial assessments and create personal action plans based on your unique circumstances. A counselor can show you how to create a workable budget, deal responsibly with decreases or increases in your monthly income, communicate effectively with bill collectors and, if need be, whether you should investigate filing for bankruptcy. Most of all, counselors provide people with the tools they need to make more informed decisions.

At the risk of sounding like a commercial, let me use my agency, Cambridge Credit Counseling, as an example. The people who call us, roughly 32,000 per year, are each offered a free examination of their finances, a personalized plan based on the outcome of their counseling sessions, a copy of our Learn Now or Pay Later financial guide, and a copy of our DVD, Budgeting with the Connors. Other reputable credit counseling agencies offer similar products at no cost to consumers - they do so because their mission is to help.

Can’t go it alone? No problem

Millions of Americans find it difficult to develop a workable financial plan. That’s not a put-down in any way - it’s just not within their expertise. And for those who’ve seen their income significantly reduced and been hit by increases in their minimum monthly credit card payments – a terrible double whammy, there’s a lot to lose by waiting for things to turn around. The good news is that credit counseling agencies can usually help in these situations, too. Depending on your creditors’ policies, you may be eligible for participation in a debt management program, which typically includes a reduction in interest rates and fees, allowing you to afford your monthly payments and pay down your accounts over time, generally 3-5 years. In addition, you’ll be provided with ongoing educational counseling and support throughout your enrollment, helping you manage your finances more effectively once the debt management program is complete.

Whether you’re trying to understand a particular aspect of your personal finances or attempting to deal with unmanageable levels of indebtedness, credit counselors can help. Best of all, non-profit credit counseling agencies provide their services free to the public. Before seeking costly remedies for your financial problems or taking steps that may significantly damage your credit, take the time to speak with a professional who has your best interests in mind.

I learned about SmartyPig at the Finovate conference, and wanted to try the online savings account for myself. I currently have an ING savings account and think I do a pretty good job socking some funds away each month for a rainy day, but you can always save more, right?

Based on the demonstration at the conference, SmartyPig seemed like a fun way to save cash for specific goals. Here's how it works, and why it's different from other online saving tools.

The sign-up process

When you sign-up with SmartyPig, you are also really signing up for a new savings account through their banking partner, West Bank. This West Bank savings account is currently yielding a 2.01% interest rate (better than the 1.30% ING is currently offering)!

Once you have a SmartyPig account, you'll need to link it to an existing checking account. SmartyPig requires that you transfer a minimum of $25 from your checking account to your new savings account right away, so you have at least a small balance to start.

You can modify your security and account settings, including choosing an avatar for yourself. SmartyPig has plenty of piggy personalities to select from, or you can upload your own. 

Setting goals

At SmartyPig, you list out your savings goals and it tells you how much you need to put aside each month to reach those goals. Sure, anyone who passed a high school math class can calculate the same thing, but can they give you the cute piggy graphics and visual motivation you need to actually follow through? And more importantly, will they autodraft that necessary amount from your checking account each month? 

I decided my first goal on SmartyPig would be to save up for a Vegas trip I'm taking next June (safely assuming my winnings from the blackjack table won't cover the costs of the weekend). I figure to really go in style I'll need two grand. Smarty Pig reminded me that a $2000 trip means saving $245 each month. Yikes! Somehow, $245 drafted from my checking account for the next eight months seems like a heck of a lot more than just putting $2000 on my credit card and worrying about it later. This might be Smarty Pig's biggest strength: it forced me to re-evaluate how much something is really worth to me. If I'm not willing to part with the funds each month ahead of time, maybe I should reconsider my purchasing decisions. 

I decided to lower my Vegas goal to $1000, and chose the day of the month I want the $125 autodrafted from my checking account each month. I'll also start looking for ways to cut my trip's costs (cheaper airfare and luck at the slots will certainly help).

Going public

Perhaps the most unique thing about SmartyPig is that it can interact with your Facebook and Twitter account, if you want it to. The SmartyPig Share tool alerts your friends and family to your savings progress and even solicits funds from them. You can create a widget to place on 28 various social networks of your choosing. This widget can either ask for friends and family to donate money to your savings goals or (if you think that's kind of tacky) simply show them your progress. Sharing your goals with others is a great way to help you stay motivated enough to reach them.

The payout

Once you've reached your goals, SmartyPig has a few options for sending your savings back to you. You can opt for a MasterCard with your savings on it, choose a gift card from a list of retailers (this option will add 6% to your amount), or simply transfer your savings back into your checking account. 

Site security

Don't let the cuteness and simplicity of the website's design fool you: it has thorough, no-nonsense security in place to keep your account secure. SmartyPig will ask for a strong password, answers to five security questions, and other personal information like your Social Security number when you sign up. In truth, the security seems almost like overkill. Each time I visit the site it wants me to answer security questions, and my sessions time out faster than other online accounts I have with ING, BofA, and Chase. I actually locked myself out of my SmartyPig account by entering the wrong password too many times. Luckily, the customer service was efficient and friendly, and I was back in my account in no time.

Other features

I haven't explored everything yet in SmartyPig, but I did notice the ability to connect your SmartyPig account with other online personal finance managers like Mint and Wesabe. You can also purchase SmartyPig gift cards for friends to get them started on the savings site, too.

Overall, SmartyPig is perfect for those looking for some fun motivation to save towards goals. It is especially great for people who enjoy social networking, but can also just be used as a basic savings account that autodrafts monthly from your checking account. Plus, you can edit or cancel your savings goals at any time, so it really is as flexible as you want it to be. A worthwhile site to check out for long-time penny pinchers and savings newbies alike!

Oh the horrors! Credit card balances that make you want to run screaming, debt collectors that call late into the night when you're home alone, identity thieves that are able to suck the very soul right out of you...It's Halloween folks, and at SpendOnLife, that means sharing some classic (and financially horrifying) ghost stories.

The Lady of the Lake...who couldn't stop shopping

It's true, she exists. You may see her walking that desolate stretch of road along the lake late at night, weighed down with shopping bags so heavy they could sink her to the bottom of the water. She's on foot because her car was repossessed (she spent all her money on clothes instead of car payments). But did she have a choice? No! Not when Nordstrom was having THE sale of the year, and deals abounded in every corner of the store. She may be walking in a torn chiffon wedding dress now, but just wait until she changes into the Therapy outfits she bought! Of course, she has nowhere to change into them...her house was foreclosed on long ago. And so she walks from the mall to the lake each night, purchases as heavy as iron-forged chains hanging from her ghostly arms.

The Tell-Tale Debt

He thought ignoring the bills would make them go away. The past due notices piled up, and yet he did not pay. No, instead he cleverly peeled back the floorboards and placed the bills inside, where no one could ever find them. The debt collectors came to the door. He thought he could tell a convincing enough tale to make them disappear. But the planks of the floor kept creaking, something tapping at them from below. He could stand it no more! Like a desperate man, he began ripping at the wooden boards, until he revealed the past-due debts that weighed so heavy on his heart and would not simply disappear. They continue to haunt his credit report to this day.

The Possessed Identity

Something beyond comprehension is happening to Regan. She's not feeling quite like herself lately. She's receiving notices of past-due payments on loans and credit cards of which she has no recollection of applying. A Bowflex listed on her credit card statement? She has no need for one of those, especially considering the newfound flexibility in her neck and levitation abilities. It's as though demons have invaded her identity and are using her good credit for their own devices. How can she exorcise these evil spirits once they've gotten a hold of her Social Security number, date of birth, and mother's maiden name?! If you listen close enough, you can still hear her cries: "Be gone, identity thieves! I command you!"

For more Halloween money stories (treats only, no tricks, we promise!) check out PT Money's comprehensive list. Have a Happy Hallow's Eve from all of us at SpendOnLife!!