by Bill Hardekopf
Global Payments is the latest company to fall victim to a large-scale hacking incident. On April 2nd, the company said hackers stole debit and credit card account information for nearly 1.5 million consumers.
Unfortunately, this has become a fairly common news story. Last year, hackers stole personal information from a reported 24 million accounts from Sony Online Entertainment. In 2010, 130 million accounts were stolen from a payment processing company, Heartland Payment Systems. In 2007, 46 million accounts were stolen from TJ Maxx and Marshall's. Even MasterCard had 40 million accounts compromised in 2005.
According to a recent study by Javelin Strategy & Research, consumers who receive a data breach notification are six times more likely to be the victim of identity theft or fraud.
What can you do if you receive a data breach notification? The most important precaution is to check your credit and debit card accounts regularly for any unauthorized charges. Don't just look for large purchases. Hackers sometimes make small transactions since they are more likely to fly under the radar. Be persistent with watching your accounts. It may be months or even a year before thieves actually use your card.
While the large-scale hacking incidents get the publicity, there are several precautions consumers can take to protect their accounts from getting compromised by individual hackers:
- Change your passwords from time to time. Don't publicly post anything you may use as a password: your birthdate, pet's name, mother's maiden name, or your school. Identity thieves can use the information you post to guess your password.
- Do not email your credit card number to anyone. No financial institution or legitimate company will contact you by phone or email to ask for your social security number, credit card number or other personal information. Be cautious about opening any attachment or downloading any files from email you receive, regardless of what company sent them.
- Check your credit reports. You can get one free credit report every year from each of the three credit bureaus. Go to AnnualCreditReport.com or call (877) 322-8228 to order. Stagger these reviews throughout the year in order to catch anything that isn't correct in your account.
- If you use a wireless router, password protect it and enable the encryption to scramble the data you send online.
- Use your credit card instead of debit card. Credit cards offer stronger fraud and identity theft protections.
- If you feel your information has been compromised, place a fraud alert at the three major credit bureaus. Call Experian at 888-397-3742, Equifax at 800-525-6285, and TransUnion at 800-680-7289. You can put a security freeze on your files.
- Ask your bank if it has free software to protect your bank account. For example, Bank of America offers Trusteer Rapport for its online banking customers.
- If your information has been stolen, file a complaint with the Federal Trade Commission at FTC.gov/complaint. The data is used to create a picture of wrongdoing. Unfortunately, the FTC won't get your money back.
Bill Hardekopf is CEO of LowCards.com, a site that simplifies the confusion of shopping for credit cards. It is a free, independent website that helps consumers easily compare credit cards in a variety of categories, such as lowest rates, rewards, rebates, balance transfers and lowest introductory rates. It also gives an unbiased ranking and review for each card.