Fraud Alert: Could your company, university or organization be a target for spear phishing?

If you have had an email address in the last year, you have probably received more than a handful of "phishing" emails. These increasingly common email messages are designed to appear like authentic messages from recognized businesses such as eBay, Amazon or Bank of America. The content of the message usually includes some sort of instruction for logging on to your account and updating your personal data online. When you click on the links included in these emails you are directed to a website set up by identity thieves exclusively to steal your data. This has become such a popular tactic for thieves that many websites now include detailed tutorials on identifying phishing fakes.

Recently, the phishing trend started to take on new dimensions. Not only are phishing emails becoming harder to identify, they are also getting much more sophisticated. "Spear phishing" is the practice of sending a targeted phishing email to a small segment of people. For example, employees of a certain company may be targeted with a phishing email that appears to be from their employer or from someone within the company. Spear phishing is usually designed to steal company information or access to sensitive computer records as opposed to personal identity information.

This may sound like part of a far-fetched plot in an episode of "Alias," but spear phishing is unfortunately a reality. A recent PC World article highlighted the growth of this crime: "According to IBM's Global Security Index report, intercepted spear-phishing attempts exploded from a mere 56 instances in January to more than 600,000 cases in June [2005]."

How can you protect yourself from this targeted crime?  Be suspicious of any email asking you for usernames, passwords, account updates or personal information, even if this email appears to be coming from a trusted source. If you receive an email that you suspect is spear phishing, don't click on the links. One click could be all it takes for the thief to gain access. If a suspicious email appears to be coming from your company's IT or HR department, call their office to confirm that the email is authentic before you proceed. These departments should also avoid sending emails that could appear to be phishing and establish safe email policies for employees to follow. Understanding spear phishing and being cautious about suspicious email can help protect your identity and your company's privacy.

Credit Bureau Watch: Equifax promotes the movie Firewall

The three national credit bureaus aren't exactly known for their consumer pop culture savvy. Equifax, Experian and TransUnion usually leave their advertising solidly in the "personal finance" world. Which is why Equifax's latest promotion is so surprising.

Visit www.equifax.com today and you'll see that they are promoting a $15 off coupon for their credit monitoring program with a clip from the newly release movie Firewall. In this film, Harrison Ford plays a computer security expert (Jack) whose identity is stolen and used against him by thieves wanting to rob a bank:

Bill Cox (PAUL BETTANY) has been studying Jack and his family for many months; monitoring their online activity, listening to their calls and learning their daily routines with an arsenal of digital and video recorders and parabolic microphones that tap into the most personal of information. He knows the names of their children’s friends, their medical histories, and the I.D. code for the security station that guards their neighborhood. Having spent the better part of a year methodically infiltrating every aspect of Jack’s identity, Cox is now ready to make good on his investment.

Will Equifax's 3-in-1 Credit Monitoring prevent this kind of identity theft crime? Probably not. But basic credit monitoring programs could help you catch more common (and realistic) kinds of identity theft.

National Consumer Protection Week on CreditBloggers.com

To quote Macbeth: "Something wicked this way comes." All next week CreditBloggers.com will be focusing on exposing the wicked ghouls, goblins and monsters of the consumer finance world. In recognition of National Consumer Protection Week, our team of credit and personal finance experts will be tackling the issues of identity theft, phishing, pharming, scams and fraud all next week.

If you've ever had your identity stolen, fallen for a "too good to be true" offer or received a fake email from a company calling themselves "eBey," this week is for you. Look for the following information on our blog all next week:

• Consumer protectors: Recognition of outstanding consumer protection advocates
• Action advice: Tips for preventing and recovering from identity theft
• Scam alerts: News about recent phishing, email, phone and other types of fraud
• Fraud impacts: How identity theft or fraud impacts credit reports and credit scores
• Real stories: Information about real identity theft and fraud cases
• Online resources: Links to good resources for fraud information
• Law reviews: Summaries of existing or proposed consumer protection laws
• Reform ideas: Suggestions for legislators or businesses trying to prevent fraud

As always, CreditBloggers.com welcomes your questions and comments. Either post your feedback in the comments section below or send us an email. Let us know what matters the most to you during National Consumer Protection Week.

Credit Card Review: American Dream Platinum MasterCard

With the Citi Simplicity card touting the end of late fees and the American Express Open card promoting savings accounts, there are a lot of creative new options available to savvy credit card consumers. The American Dream Platinum MasterCard has recently launched as the newest trend in credit. This credit card offers you a fairly low APR, no annual fee, and a chance to win $25,000 each month. Let's take a closer look at this brand new credit card:

• APR - This card offers three rate options based on your credit standing. People with excellent credit are offered a low 10.74% rate. Good credit gets you a 15.74% APR. Borrowers with bad credit are offered a reasonable 20.74% APR. This is a lot lower than the 30%, plus an annual fee that some creditors give to people with credit problems.
• Annual Fee - There is no annual fee for the American Dream credit card. Even if you have bad credit.  This feature makes the card really stand out from the rest of the crowd.
• Intro APR - Whether you have great credit or terrible credit, this card gives you 0% fixed APR for five months. That's a pretty good deal for someone with poor credit who is trying to reduce their debts.
• Fees - Late and overlimit fees are a bit high: $39 compared to the standard $30-35. It's not much of a difference however.
• Perks - For every $1 you spend you get 1 entry into the $25,000 sweepstakes (up to 1,000 per purchase). You also get 1,000 entries just for signing up for the card.  Your chances of winning are probably pretty low, but it's a fun contest.

So, there you have it! The American Dream Platinum MasterCard is a good credit card option for borrowers with all types of credit and comes along with a fun contest each month.

Groundhog Day: Are you doomed to making the same credit card mistakes over and over again?

It's official. Groundhog Punxsutawne Phil saw his shadow this morning and predicted that we are in for six more weeks of winter. Ever since Bill Murray had the worst day of his life over and over in the 1993 movie Groundhog Day, this holiday has also been synonymous with examining the bad habits and mistakes that we can't seem to shake. You make your New Year's resolutions January 1 and evaluate why you may not be meeting these goals on February 2.

One of the most common resolutions is to reduce credit card debt. I would also guess that this is one of the most common financial mistakes that people tend to make over and over again. Breaking the credit card debt cycle is difficult to do. Probably the number one most important step you can take is to stop using your credit cards while you are focused on paying them off. Either lock your cards in a drawer at home or freeze them in a block of ice, but do something to keep yourself from adding new charges to your accounts.

Your next step should be to create a plan to pay as much as possible to your creditors each month. Many experts recommend that you pay all your minimum payments and then put the remaining amount toward the credit card debt with the highest balance and the highest APR. When that account is paid off, you move on to the next highest balance/APR card.  In most cases, this is the fastest way to reduce your debts.

Celebrate Groundhog Day today! Take a few minutes to examine your financial mistakes and create a plan to stop repeating them! Read more about going from debt to wealth online with this free article from personal finance expert, Gerri Detweiler.

Checking in on credit card minimum payments

It's been a month since credit card minimum payments increased across the country. Each credit card company has their own policies, but on average minimums have increased from about 2% of the balance to 4% of the balance each month. Many credit card companies are now using a new formula developed by the Office of the Comptroller of the Currency (OCC) that equals 1% of the balance plus the interest charges and fees. According to MarketWatch:

Bank of America and MBNA (which Bank of America recently acquired), Citibank (a unit of Citigroup) and Wells Fargo all have adopted the OCC's formula. But other card issuers adopted a slight variation on the OCC's guidance.

For instance, J.P. Morgan Chase requires a minimum payment due that's the greater of either the standard formula (1% of the balance due, plus interest charges and fees) or 2% of the balance due.

Meanwhile, Capital One Financial Corp. says its formula has been the same for years: The greater of $15 or 3% of the balance including finance charges and fees.

Credit card delinquency statistics will not be reported for a while, but it doesn't seem like this increase has had a catastrophic effect on cash-strapped consumers. With the average consumer carrying $9,400 in credit card debt alone, this increased minimum payment should have a positive impact on long term debt reduction goals.

New Year's Resolutions...Part 3

For the past 2 weeks we reviewed a series of six New Year's resolutions that are easy and inexpensive to implement in your everyday life and, most importantly, can have a significant positive impact on your personal credit and finances.  Let's quickly summarize the six that we've covered before we move on to the last three.

1. Get your credit card utilization to less than 10%.  Credit scores love to see a very low utilization.  If you can get it down to less than 10% you could see significant improvement in your credit scores.
2. Be sure to claim all three of your free credit reports this year.  And, you may be entitled to more than three. 
3. Do a better job of protecting yourself from identity theft.  There are many inexpensive ways of keeping fraudsters out of your life.  Again, review my previous blogs for more details.
4. Work on cleaning up any negative information from your credit reports.  You have the right to ask that anything on your credit reports be verified for accuracy.  You should execute this right.
5. Think about putting money into I-Bonds. Don't let it and rot in low interest savings accounts.  The rates as of last week date were 6.73%.
6. Think about participating in a company's dividend reinvestment program (or DRIP).  This cost effective way of investing is a great way to start playing the market.   

Now on to New Year's Resolutions 7-9. 

7. Navigate the real estate market. If you buy a home or refinance an existing home loan in 2006 then there's a right and wrong way to do it.  Mortgage rates went up in 2005 so you might not be in the market to refinance an existing home loan.  But, the rates might fall in 2006 and if you buy a home or an investment property you'll certainly need to apply for a new loan.  If you are in the market for a home loan then you should be sure to do all of your rate shopping (yes, you should shop around for the best rate) within a 14-day period. 

Take advantage of an intentional loophole that was consciously programmed into the FICO credit scoring systems that interprets multiple inquiries made within a 14-day period as rate shopping.  The credit scoring models will treat all of the mortgage related inquires (yes, they're smart enough to know which inquires are related to a mortgage application and which ones aren't) in a 14-day period as 1 inquiry.  That means that instead of docking your score for ALL of the inquiries it will only dock them the equivalent of only 1 inquiry. 

This logic behind this loophole is actually pretty simple.  Nobody, especially the credit models, wants to penalize you for being a smart consumer who aggressively shops for the best interest rate.  The model knows you're not applying for five or six home loans.  You're simply applying for the best rate on one loan.

By the way, this also works for when you're shopping for the best auto loan rate.  So, be sure to do all of your auto loan shopping within a 14-day period as well.

This not only makes great sense because consumers will shop around for credit but it also makes great business sense for the credit bureaus and the credit scoring companies.  If you penalized consumers for shopping for the best interest rates then you are giving them an incentive to only go one or two places.  That means fewer credit reports and credit scores being purchased and less revenue for the companies that sell them.  There's always another side to the story isn't there?

8. Get a copy of your consumer reports from ChoicePoint.  The same Federal and state laws that say you can get free copies of your credit reports also say that you can get a free copy of your consumer report from a company called ChoicePoint.  For those of you who are not familiar with ChoicePoint, they are the old Equifax Insurance Services division.  They spun off years ago and renamed themselves.

ChoicePoint is in the business, among other things, of storing and selling your insurance claim history to insurance companies where you've applied for either homeowner's or auto insurance coverage.  They are the equivalent of a credit bureau for the insurance industry.  Their insurance claim report is called a C.L.U.E report, which stands for Comprehensive Loss Underwriting Exchange.

If you haven't filed any auto or homeowner insurance claims ever then you won't have any CLUE reports.  However, if you've filed any auto or homeowner claims in the past 5 years then they’ll certainly have a record of this.  They will have them stored in separate reports, one for auto and one for homeowner.  You can certainly have one but not the other or you could have one of each.  And, since they're free you should definitely claim them each year.  You can claim them at ChoicePoint's consumer website which is www.choicetrust.com. 

Bet you didn't know this.  Hey, I'm here to please. ☺

Why is this important information to have?  It's pretty simple.  This information is used to calculate your insurance scores.  That's right, you have insurance scores too.  That brings me to #9
   
9. You should become familiar with your insurance scores.  In the insurance world Fair Isaac (or FICO) isn't the dominant player so most insurance companies don't rely on the FICO version of an insurance score, which they do sell.  The dominant player in the insurance score world is, you guessed it, ChoicePoint. 

ChoicePoint primarily sells two scores to insurance companies.  They are called ChoicePoint Attract for Auto and ChoicePoint Attract for Homeowners.  In the industry they are simply called CP-Attract scores.  Trust me, your insurance company knows exactly what CP-Attract scores are.  Fair Isaac does develop and sell their version of insurance scores but they are a distant second and don't enjoy the same market domination as they enjoy on the consumer lending side of the aisle.

These CP-Attract scores are used to determine if an insurance company will write an auto or homeowner's policy for you.  And, they can certainly increase your rates or flat out decline you if your CP-Attract scores are poor.
 
And here's a surprise for you.  Your Equifax credit report is also used to determine your CP-Attract scores.  So, that's a blend of previous insurance claim data and credit information determining your CP-Attract insurance scores.  How do you feel about that...how you handle your personal credit impacts your insurance rates?

These scores can be purchased (nope, they aren't free) online here.

I certainly hope that these 9 New Year's Resolutions are helpful to you.  Have a great 2006 and we'll do this again next January for 2007.

Must read: Child identity theft victims becoming more common

The Christian Science Monitor has a fascinating article online today about the growing number of children who are victims of identity theft. The article mentions Zach Friesen whose identity was stolen to purchase a $40,000 houseboat when he was only 7 years old. He didn't discover the crime until he was 17 and applying for his first job. Friesen now travels the country educating students about identity theft.

According to FTC records, about 5% of identity theft complaints involved victims under the age of 18. This equals about 500,000 children and is the fastest growing demographic for identity theft. Adults between 29 and 18 accounted for 29% of filings themselves. Child identity theft is especially dangerous because it usually isn't spotted until many years later. Some common types of child fraud include:

• Record theft – Children's Social Security numbers and birth dates are often used by schools, doctors, childcare providers, camps and sports teams. When these records are not stored in a secure manner, they can be easily stolen by an identity thief. Because parents do not check a child's credit reports or financial records often, a criminal may be able to misuse the stolen information for a long period of time before being caught.
• Tax fraud – There have been numerous cases reported in which an identity thief claims someone else's children on their taxes in order to obtain a higher refund. In most cases, the crime is discovered when a parent receives notification from the IRS that their children have already been claimed as dependents by someone else.
• New accounts – Credit cards and loans can be opened fraudulently using a child's stolen information. A common misconception is that the child's age is on their credit reports and should prevent accounts from being opened. While credit reports do include a birth date, this data is derived from information provided to creditors and can be easily faked. If an identity thief applies for credit using a child's Social Security number and a forged ID, the birth date listed on their application can become the official listed birth date on the credit report.
  
• Identity takeover – The complete take over of a child's identity is less common but more damaging crime. Working with unscrupulous "credit repair" artists, people with credit problems and illegal immigrants purchase the identity of a child and start using it as their own.  When this type of damaging crime occurs, it may be necessary to go through the difficult process of establishing a new number with the Social Security Administration. 

Protect your children from identity theft. Read a true story from Gerri Detweiler about identity theft impacting a teenager and read more about keeping kids safe from identity theft.

Enron, IBM and the future of pensions plans

Enron officials Kenneth Lay and Jeffrey Skilling are on trial today in Houston for fraud and conspiracy charges. Since Enron first filed for bankruptcy in 2001, there has been an emphasis on the losses suffered directly by the company's 50,000 employees. Thousands were left with little or no pension after the company collapsed. For many, this loss was in the hundreds of thousands of dollars.

Pension programs have also recently been frozen or eliminated at some of the nation's largest companies, including IBM and Alcoa. Traditional pension plans (where the employer contributes a set amount) are being replaced by 401(k) plans (where the employee contributes for their retirement). According to The Christian Science Monitor:

Already nearly 65 percent of employers with retirement plans have a 401(k) system as their primary vehicle. But almost no plans are generous enough.

"Most people are going to arrive at retirement and not have adequate money," says Alicia Munnell, director, Center for Retirement Research at Boston College. "This is serious. None of us are good at doing our own retirement savings."

With the real value of Social Security pensions shrinking as Medicare premiums rise and the normal retirement age climbs to 67, the bottom one-third of new pensioners will be poor, Ms. Munnell says - far greater than today's 9.8 percent poverty rate for retirees.

When you add up all this news, the future looks pretty bleak for pension plans. It is an increasingly smart move for consumers to "back-up" their retirement savings with a secondary type of fund. In addition to 401(k) or pension savings, use independent IRA's to save for your golden years. If you are worried that your pension is at risk, research the Pension Benefit Guarantee Corporation (PBGC) and the Employee Retirement Income Security Act (ERISA) online for information about your benefits being protected by law.

American Express and Bono pair up for charity credit card program

Credit card users in the UK are getting a new way to do good. Starting next month, Bono and American Express are pairing up to offer an American Express Red credit card in England. This cool card automatically makes a donation to HIV/AIDS charities in Africa equal to 1-1.28% of your credit card spending. No word yet if the card will be offered in the United States.

While you are waiting for this Red credit card offer to cross the pond, why not consider some similar alternatives that already exist for American borrowers:

• American Express - Amex cardholders can donate their membership rewards points to select charities. A $5 donation is made for every 1,000 points you donate. American Express also has an online program to help you choose, submit and track standard donations online.
• Working Assets - This VISA card has a low 9.9% APR and makes a $0.10 donation to the charity of your choice with each purchase.
• Citi AAdvantage - The AAdvantage card allows members to donate American Airline miles to the Make a Wish Foundation. This card even has a matching program that will donate one mile to the Miles for Kids program for every three miles you donate.
• Point donations - Many charities and non-profit organizations accept donations of credit card reward points or miles. For example, the American Red Cross accepts airline miles.

Don't wait for Bono's card, do something good with your credit card spending today!