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When I worked for retail stores, part of my job was to convince customers to buy things on credit under terms that were carefully designed to cost you as much as possible. It was a bad deal even when you agreed to it, but it's even worse if some thief gets the goods while you get the debt

That's why I was always careful to look at ID cards and watch for signs of fraud. Like that one time I thought something wasn't right so I went to the back room to call the customer's home phone number. Guess who was at home right then and NOT at our store applying for credit?

Because of my effort, I stopped more instances of fraud and identity theft than every other store employee combined… which is frightening if you think about it. Why was I so much better? Was it because the fraudsters always came to me? Did I have some special talent for spotting issues? I don't think so. In almost every case, it was simply a matter of making an effort.

In my days of commission sales, you can bet it hurt to spend an hour helping a customer only to have to put a careful of high-profit stuff back on the shelves. Even as an hourly employee, turning away a sale was likely to bring down the wrath of management. You might think you could just explain the situation or show them the fakes, but I quite literally handed a manager a "credit card" that had been printed so recently the ink was still tacky. He handed it back and said, "looks fine to me!" ring it up!

What this has to do with fraud alerts

Imagination: Stop right there, criminal scum!

(Image is in the Public Domain)

Fraud alerts are supposed to work like this:

• You place the alert.
• Any new credit applications in your name are flagged.
• SWAT teams and angels and angel SWAT teams descend from the heavens upon any criminal who dares to try anything funny with your identity.

Reality: Code 10? I should check their identity more carefully, but meh...

(Image is in the Public Domain)

Here's how it actually works:

• The person running the credit sees the "alert" when they put in the application.
• They're bored, apathetic, under pressure from management, or not trained well enough so they push the application through.
• The thief walks out with cash and prizes

Of courses, this assumes they even notice the fraud alert at all. When I worked retail, it was a tiny flag near the bottom of the screen and easy to miss. But let's be really generous and say that all of this works exactly as intended. Thieves are scumbags, not idiots. Obviously they'll wait until after 90 days to use any identity they got from a data breach.

A fraud alert might be a little better than nothing at all, but it relies random strangers to have both the training/desire to protect you AND thieves that aren't smart enough to wait out the preposterously tiny fraud alert period. Fraud alerts are a joke and a fraud.

The Bad News

Bottom line, ID Theft is a low risk crime with only two steps:

1. Get someone's data
2. Use the data

Now I have goods, services, and special accesses, but you get all the consequences. Worst of all, government entities responsible for protecting you don't and companies make more money on ID Theft than they lose. There's no one looking out for you; you're on your own.

The Good News

Until now, you've been given incomplete or bad advice for how to respond to ID Theft risks, but that changes today. I will give you the bottom-line basics you need to make informed decisions; i.e., which defenses actually work and which are just snake oil pitched by ID Theft profiteers.

Let's get started!

Learning styles vary greatly so the material is available in two formats: video and text. The videos are intended as a high-level overview for covering ground quickly while the text version will have numerous inline references to sources and examples to give you a deeper understanding the the material. Use either or both to learn the material in the way that works for you!

This is a free online course. To get started, ID Theft - The Straight Basics

No security, no accountability. TJ Maxx

(Image is in the Public Domain)

So today my wife received a letter from our bank saying that her card was included in the data breach. They were very pleasant and helpful (as credit unions tend to be), but one thing caught my attention:

If at any time you suspect you may be a victim of fraud or identity theft, you may place a fraud alert on your credit file with one of the three major credit-reporting [companies]. A fraud alert will require any company or creditor to contact you to authorize any new accounts or loans.

For the record, fraud alerts are required, but can be ignored. The problem is that it's the issuing company's responsibility to check for the fraud alert and act accordingly. Since it hurts their business to do so, it's far more likely that they will "miss" the flag (especially when they're on commission). That means that it may help and it may not.