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Jan 162014
 
 January 16, 2014  Posted by  Features, Hot Deals, Money, Shopping
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I was not affected by the Target data theft for one reason: I use cash as much as possible. On my last trip to Target, I toyed with signing up for a debit card for the 5% discount, but I was in a hurry and didn’t want to deal with the application process.

It looks as if I dodged a bullet. If you’re a Target cardholder, the Target corporate site has good information about what happened and what you can do about it. In addition, the company has offered to pay for a year of credit monitoring for its customers.  To receive it, go to creditmonitoring.target.com and register before April 23, 2014. You will then receive an activation code that must be redeemed by April 30, 2014. Make time for this. You don’t want to miss the sign-up window.

There are two potential frauds from this breach. The first is that someone will use your information to make phony charges to your account. The second is that scammers will use the Target breach as a pretext for other scams, say by sending emails or placing phone calls requesting personal information under the guise of helping you but with the real goal of taking your money.

Finally, remember that the we all know about the Target problem because it’s so extensive. However, financial data is stolen all the time from retailers large and small.

Check your statements

Whether or not you’re a Target customer, get into the habit of checking your credit and debit card transactions. A common trick is to put through a very low charge, also known as a microcharge, with a vague title. The scammer is betting that you take a look at it and figure it’s a charge for a song that you downloaded or decide that it is too small to deal with. Even better, you might not even check your statement because the total is close to what you expected.  If you are expecting a bill of about $150 because you used your card at a restaurant and to buy a new outfit, and you receive a bill of about $150, you may pay it without realizing that there is an extra $1.37 beyond the dinner and the dress.

If you ignore the charge, it will continue next month, and it may be slightly higher. The initial charge is the result of someone trying lots of random numbers to see which ones are valid. The charges in later months happen because the thief knows it is a good number and that the cardholder isn’t being vigilant. Some of these scams run for years.

I’ve been a victim. Every few years, one of these charges comes through on my cards. When it does, I call the bank, they reverse the charge and they send out a new card. It’s a hassle, but it’s a reality of modern life.  It sounds like a bad online ad, but this one weird trick can save you money and make life difficult for the bad guys.

Just use cash

I like to think that I am less likely to be a victim because I prefer to use cash. It keeps me mindful of spending, and it makes me look a little dangerous in an increasingly electronic world. I have a credit card that I use for online shopping, travel, automatic billing and the occasional situation where I underestimate how much cash I’ll need for something. I pay it off in full every month, and there’s only one bill to track.

The Target debacle is a good reminder that the discounts aren’t free. Don’t open a store card unless you will use it enough to offset the risks of a data breach – and then don’t forget to pay the card bill on time.

Annie Logue

Annie Logue has lived in Chicago for the better part of 30 years now. She loves to travel and find new things, whether around the globe or around the corner. She’s also long been fascinated with money; she teaches finance at the University of Illinois at Chicago and is the author of four books in Wiley’s . . .For Dummies series including Hedge Funds for Dummies, Day Trading for Dummies, Socially Responsible Investing for Dummies, and Emerging Markets for Dummies. She lives with her husband and son on the north side of Chicago, where she operates Chicago on the Cheap.

2 comments on “Target, identity theft and how to stay safer

  1. JulieCC on said:

    We use a credit card for everything BUT we pay it in full every month. In 23 years of marriage, we’ve never carried a balance over on anything. It saves in the cost of checks and it’s so much easier to track than cash. Cash just disappears in my wallet. Plus, the card extends warranties, covers cell phone breakage, and other benefits at no extra cost. The best thing about our company is that they have virtual account numbers. When we purchase online, through the postal mail, or on the phone (anything where swiping the actual card is not necessary), we get a one-time use number that links back to our card. It’s only good at that merchant. So even if someone got that number and CVV code, they could not use it for two reasons – it’s already been used and it’s only good at that business anyway. It’s an awesome, free service. The company also just announced they will search for a better price on anything electronic for 30 days after a purchase. We just bought a laptop and are getting ready to buy a TV and now we don’t have to watch all the ads/websites for a lower price. They will automatically refund us the difference between $25 and $250.

    The other benefit to our card is it has no annual fee. So the company has never made money directly from us (only merchant fees). It has not cost us to use the card in 25 years (we had them separately before being married and adding each other to our cards – we have two with the same company as fall back). The card has an awesome rewards program and every three months or so, we have enough points to turn them in for a $100 gift card. That’s what we choose to use them on as it’s the most value. But we can also use them like currency at Amazon and other places. So everything goes on the card to maximize our points. But again, we never carry a balance.

    Our card company is totally on top of fraud. If we go out of state and don’t alert them, the first time a fuel or restaurant charge shows up, they call us. One day last year someone had used our number on an actual card at a store out of state. They made a $50 purchase and within three hours our company was calling us, stopped the card, and overnighted us new cards. They even waived the $50 we were supposed to pay.

    We check our credit card every 1-2 days online. But then that’s because we reconcile all our spending every day if possible. We’re a bit AR about that, admittedly. But we can check for weird stuff even if it gest through our company.

    Don’t forget you’ll see “hold” charges on your card that are usually $1 and typically from gas stations. Those are not thieves trying to test it. It’s just what gas stations and some other businesses do. Most of the time those are hidden, but we can see “temporary transactions” on our card’s site.

  2. Great info, and a person can sign up even if no immediate breach happened to them. Free credit report to help you monitor. And yes scammers do an initial charge that is low to see if the card is valid then go ahead and charge the rest. Hopefully your bank will catch before any problems.