Wed, May 14, 2008
Identity Theft and Seoul Food
Identity theft seems to get a lot more attention than it used to. I’ve given it my share by writing two client newsletters offering advice on how to avoid ID theft. But this is a topic that holds considerable personal interest for me, as I’ve been the victim of a series of thefts of credit card numbers over the years.
The most recent one was probably the funniest, if that’s possible. As I now do frequently, I was checking a credit account online and I noticed a charge for what appeared to be a Korean restaurant. Although I love Korean food, I was sure I hadn’t made the charge, so I filed a dispute online. I got back a response indicating that the bank had to allow 52 days for the merchant to provide proof of the charge. That seemed a bit odd to me, but the amount wasn’t large, so I decided to wait and see what would happen.
After a couple of months, I hadn’t heard anything, but in the meantime a paper copy of my statement arrived and I got a bit more information. The charge was indeed for a Korean restaurant – in Seoul, Korea. On day 55, I sent another message to the card issuer, asking why I hadn’t gotten a response as promised. They dutifully replied with an image of the charge slip, which was written in Korean and bore a signature that (of course) was not mine. I responded, pointing out that on the days before and after the transaction, I’d made charges locally in the Boston area (did they think I had ordered takeout and had it delivered by FedEx, perhaps?). The bank finally figured out that it was a fraudulent charge and things were quickly sorted out at that point. This, I should add, is the fourth time I’ve had a credit card account compromised in as many years.
So for me, the risks of identity theft aren’t hypothetical. Still, it seems reasonable to wonder whether the risks are being exaggerated. As identity theft has received more attention in the popular press, a cottage industry has sprung up around providing insurance and other services, encouraging everyone to worry about the possibility that their credit might be damaged by an identity thief. At the same time, data have been published indicating that the rate of ID theft is not climbing alarmingly, as was once thought. The Federal Trade Commission’s 2006 survey data show that in the years between the 2006 and 2003 surveys, ID theft crimes may even have declined in frequency.
I’m inclined to think that special insurance and other services are not necessary for most people. If you’re a small business person who might lose a lot of time if you had to deal with an identity theft, it might make sense to look at one of these services, and if you are, like me, someone whose information has been compromised in the past, you have a higher-than-average risk of future problems. The first line of defense, if you’re in either of these categories, is to consider establishing a credit freeze, which should keep new accounts from being opened in your name.
So though I am an ID theft victim, I think there’s a need for moderation in the rhetoric on this topic. Those who don’t take precautions to avoid ID theft are more likely to be victims (you can see my recommendations for ways to avoid identity theft in my Fall 2006 and Summer 2007 Financial Strategies newsletters), and it costs very little to protect yourself. It’s true that some terrible things have happened to people whose identities have been stolen, but these seem to be the exceptional cases. Most identity theft victims are people like me, for whom the crime is scary, but mostly an annoyance. I expect to continue to post on this topic from time to time; I think people need to be reminded not to expose themselves to unnecessary risks.
And by the way: if you’re the guy who had that meal on my tab in Seoul, I hope you at least left a nice tip….