Let’s Close The Phishing Season

David Christianson, CFP, R.F.P., TEP

According to newswire.ca, online consumers in Canada, the U.K., and the U.S. are the most frequent victims of identity theft, totalling twice the rate of France, Germany, and Spain. Ten percent of online shoppers in Canada, the U.S. and the U.K. have experienced identity theft. In Canada, Ontario has been affected the most with 12 percent saying that they have been victims. Alberta trailed Ontario with nine percent, followed by Quebec and B.C. with eight percent, and Atlantic Canadians with less than six percent. With statistics like these, it is hard to ignore the importance of proactively protecting yourself.

“Phishing“refers to the electronic trolling for your personal financial information, such as bank account numbers, usernames and passwords. It is a form of identity theft, which can give the thieves access to your bank and investment accounts. That’s not a good thing.

If you have received an e-mail lately asking you to confirm your username and password, or saying that you had a failed login and must reset your password, you have probably been a target of phishing. These e-mails will look very official and have the logo of a bank or investment company. I have been receiving one or two a week for the last month. I might have fallen for it, except that I do not have an account at that particular bank, so my suspicions were aroused.

Your real bank would not send you such an e-mail. If there is genuinely a problem with your account, I’m told they will phone. At any rate, they will not ask you for your password.

Phishing is just one method of tracking down your information, so be careful. Ironically, most of us are paranoid about our personal computers and everything we do online, but casually hand our credit card to some guy named “Bob” and let him walk away with it, just because he provided us with libation and nutritional sustenance.
Protect that credit card; protect your passwords and PINS and all of your personal information. Identity theft can be a very expensive proposition, especially if you have high credit limits. It can take years to re-establish destroyed credit.
Several insurance companies have now introduced identity theft coverage, which I encourage you to look into. It can be added as additional coverage to your existing home, tenants or condo policy as an endorsement, but cannot be purchased as stand alone.

The endorsement provides customers with a limit of coverage (depending on what you select) for reimbursement costs associated with identity theft. These can include costs of notarizing affidavits or similar documents attesting to fraud, lost income resulting from time taken off work to complete fraud affidavits, loan reapplication fees, or legal fees for lawsuits brought against you by merchants, financial institutions, etc. They also provide experienced lawyers to guide you through the restoration period, in re-establishing your credit and unique identity.

Policy terms and costs can vary widely, depending on the company. It is best to look for a policy ranging in the $25 to $50 premium range. We are told by Plezia Insurance Brokers that AVIVA Insurance, ING Insurance Company of Canada Optimum Insurance Company Inc, Wawanesa Insurance, and Saskatchewan Mutual Insurance currently offer the coverage, in some form. However, some are only available only in select cities.

To find out more about the problem, start at www.privcom.gc.ca/fs-fi/02_05_d_10_e.asp, the website of the Privacy Commissioner of Canada, and ask your insurance agent about potential coverage if this is something that concerns you.
Here are some of the signs you might be a victim of identity theft, from the Manitoba government Consumer’s Bureau website:

Bills and statements don’t arrive when they are supposed to - they may have been stolen from the mailbox or someone has changed the mailing address.
You receive calls from collection agencies or creditors for an account you don’t have, or that is up to date. Someone may have opened a new account in your name, or added charges to an account without your knowledge or permission.
Financial account or credit card statements show withdrawals, transfers or purchases you didn’t make.
A creditor calls to say you’ve been approved or denied credit that you haven’t applied for. Or, you get credit card statements for accounts you don’t have.

You apply for credit and are turned down, for reasons that do not match your understanding of your financial position.

You can obtain a free printout of your credit history by going to www.equifax.com/EFX_Canada and printing off the request. If you mail it in with your required identification, there is no charge for the report that you will receive in 5 to 10 days. There is a charge for the instant, online report. It’s a good idea to check your credit history annually.

Other ways of protecting yourself include: shredding all personal mail, using unpredictable passwords with at least seven characters, using secure networks, and finally, keeping tabs on your bank statements, and your monthly bills.

If you feel as though you are at a greater risk for fraud, some more aggressive strategies include setting up a fraud alert to ensure that creditors notify you before issuing credit in your name, as well as, placing a credit freeze which prevents creditors from issuing credit altogether and blocks others from viewing your credit report. Credit freezes are free for identity theft victims, and cost around ten dollars for non-victims. Unfortunately you will not be able to apply for credit while the freeze is in effect, and it takes approximately three business days to unfreeze your credit. However, this is a small price to pay considering the time-consuming and costly alternative.

The “it can’t happen to me” syndrome is a major contributing factor to identity theft. Although it cannot always be prevented, proactive precautions can help minimize your risk.

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David Christianson is a fee-only financial planner and investment counsel with Wellington West Total Wealth Management Inc.