Listen to Kevin on Wisconsin Public Radio

On Your Money® Members | Sign Up (FREE)Login


More Fraud Prevention Methods

by Kevin McKinley - November 15th, 2015

Posted Under: identity theft

We’re finishing up our series on the many ways that fraudsters may use to try to obtain your information and money, and the methods you can use to protect yourself.

This week we’ll talk about the dangers of answering a phone call, and whether or not it’s worth it to pay a company for some supposed protection.

Hang up on crooks

The simple telephone is a tool that some scammers will use to get you to provide Social Security, credit card, or financial institution account numbers.

The callers claim to represent your bank, or the IRS, or even a tech company such as Microsoft.

They might ask you to “verify” your identity by providing a Social Security or credit card number.

Or they may say that your computer has been compromised, and ask you to go to your computer and download a special software program that supposedly will protect you, but will actually allow the crooks to access your computer.

First, those commercial and government organizations will rarely contact you via telephone, and instead will usually attempt to reach you via regular mail at your address of record.

Don’t be appeased by a caller ID display that appears legitimate. More sophisticated scammers can program their calls to appear to come from a legitimate source.

Instead, if you have even the slightest suspicion, ask the caller for his name and contact information, write it down, and then terminate the call.

Then use a trusted source (i.e., information you’ve previously received in the mail) to find the purported organization’s actual website or customer service telephone number.

Contact the organization and explain the call you received, and see if they really are trying to reach you. If not, let them know about the fake call you received, and any other information about the scammer that you can provide. The same goes for calls that appear to come from friends or family members, claiming that the person has been arrested, and needs bail money to be wired to an account.

It’s highly unlikely that the call is legitimate (well, depending on the type of friends and family members you have). But don’t send any money until you verify that the person is actually in trouble.

Pay for protection?

Several commercial services offer to protect you from having your identity stolen, along with help in the aftermath of the theft occurring to you.

The most ubiquitous of these companies is Lifelock, but others include IdentityForce, and IdentityGuard.

The costs usually range from about $10 to $30 per month, depending on the company and the level of service.

When you sign up and agree to pay, the companies ostensibly offer the equivalent of fraud alerts, notifications of charges and changes to your accounts, notifications of data breaches, etc.

You can perform many of these tasks yourself for little or no cost. And there is some question as to whether the services promised meet what is actually delivered. Indeed, in 2010 LIfeLock was charged by the Federal Trade Commission (FTC) with failing to suitably protect the data of LifeLock’s customers, and issuing deceptive advertising claims.

The company paid $12 million in customer refunds, but as recently as July of 2015 the FTC again filed a complaint against LifeLock, saying the company continued to violate the agreement stemming from the 2010 complaint.

Purchasing the protection and assistance offered by these companies is kind of like buying insurance. You don’t know if you will ever need it, and even if you do need it, you can’t be 100% certain that the provider will be willing and able to offer the help that you want, and were promised.

Of course, you can always try these services for a short period of time, and see if the benefits are worth the cost. If not, you can always cancel the coverage at the first opportunity.

But if you can easily afford the payments and having the coverage makes you sleep better and worry less, perhaps it’s well worth the money.