The following is the transcript from Episode 10 of Retire Happy with Roger Gainer, a financial and business audio podcast.
Roger: Anytime we see a major disaster or something that catches the news, inevitably, the crooks follow in the wake and try to snag people who are naturally nervous.
Clark: You\’re listening to Retire Happy with Roger Gainer, president of Gainer Financial and Insurance Services, Inc. It seems that every single time we turn on the TV, there\’s news of yet another security breach and millions of Americans\’ personal and identifiable information is at risk. Sadly, Equifax is just one more example added to the books of a worldwide impact from hackers throughout that try to take our information.
So on today\’s episode, we\’re taking a closer look at how you can protect yourself with these easy-to-follow steps, including how to not fall in the trap of common scams like phishing emails. Thanks for joining us. I\’m your host, Clark Buckner. Let\’s jump right in.
All right, Roger. Welcome back. I am really looking forward to talking with you today. There\’s some really important things every episode we talk about here on Retire Happy. But right now, we\’re about to talk about some of the recent data breaches, and not just specifically what is happening with some of these big security vulnerabilities that are impacting millions of people. We\’re gonna be talking about some actionable tips that anyone can implement. And that\’s kind of the main objective for today. So how does that sound to you? How are you doing?
Roger: Oh, I\’m doing great. It\’s a scary situation. And we\’ve always talked to clients for years and years and years about protecting your identity, protecting your credit. I\’ve known people who\’ve had their identity stolen and it\’s a nightmare. It becomes a full-time job trying to get your identity back. And so protecting it in the first place, it might make a couple of things a little more inconvenient in life, but it\’s nothing compared to the inconvenience of trying to get your financial life back if somebody has hijacked your identity.
Clark: Out of curiosity, I don\’t know anyone personally who this has happened to but are there just one or two general examples? I mean, of course, like, don\’t have to mention any names of people, but just what that looks like zoomed in on an individual person\’s life. What happens if their identity is stolen and they find out someone has been doing something that they, of course, didn\’t authorize?
Roger: Well, there\’s two main kinds of identity theft here. One is having your tax refund stolen which is happening more and more. I work with a lot of tax preparers and every year, there\’s more stories. And last year, there\’s quite a few more stories about people filing their taxes and applying for refund and getting a letter from the IRS that says, \”You\’ve already gotten your refund and there\’ll be no refund for you.\” And we\’re auditing your tax return because somebody took their tax ID number and filed a false tax return, claimed a significant refund. And now that they\’re…after the refund\’s gone out, now they\’re talking about audits and different things. Plus, the people who should be using that tax ID number are unable to file for their refund. They are gonna get fined for not filing a proper return and all those other issues. It\’s really…it\’s frightening.
And the other side is when your credit is stolen, if you get…somebody can open credit cards and lines of credit in your name, run up huge bills, and then not pay them which, you know, will drop your credit scores dramatically. So the next time you want to buy a car or refinance your house, you know, to even just apply for credit card, you\’re gonna get turned down or charged a much, much higher rate. And usually, that\’s how you find out that somebody\’s stolen your credit history, hijacked it, is you\’re applying for credit because you\’re sitting in a car dealer, ready to buy a car and they come back and say, \”Your credit score\’s, you know, 500.\” And you go, \”What? Wait a minute, I\’ve got great credit. And last time I checked it, it was 800. What happened?\” \”Well, you have all these delinquent bills.\” And so it starts. And that\’s when the nightmare happens, you have to contact creditors and the credit bureaus and the police. And it just…you have to come up with proof. The burden is on you to prove that you were hacked, not on the bank to prove that you were not.
Clark: Right, right. So what kinds of information generally is required for that to happen? And I think then that might be a good transition to talk about the most recent hack, the Equifax hack. I mean, there\’s a lot of things like Equifax unfortunately, but that\’s just the most recent one.
Roger: Yeah. The three big agencies for credit monitoring are Equifax, TransUnion, and Experian. So only Equifax was hacked, but they took 143 to 149…I\’ve seen the estimates that high…million identities and they got the stuff you need to open an account, they got Social Security numbers, your address, your date of birth and where you were born. And so that\’s usually the things that are needed to open a credit account. There are other people who were in dispute over their credit reports. Another 209,000 people whose entire credit report were taken, and then another 182,000 folks who were in the process of having their credit check whose entire credit reports were taken. Now those folks, they\’re probably gonna have problems sooner than the others because their credit numbers, their credit card numbers and account numbers were stolen. And usually, thieves will wanna run those up really fast before somebody can shut those accounts off. But for most people, just about everybody that has a credit report, their base identity information was taken.
Clark: It\’s really sad. It really is disappointing.
Roger: Well, you know, it is disappointing. The internet was never designed to be secure when it was first created, and this is one of the…why it\’s so vulnerable. And, you know, this isn\’t the first major data hack. The Social Security Administration was hacked not that long ago. This is why there\’s such a movement to get rid of Social Security numbers as an identification. They were not intended to be identification numbers and as a result, the system just isn\’t that secure when it comes to these things. I would expect something to come along in the next few years, but right now, we\’ve gotta deal with the system that\’s in place and that includes protecting your Social Security number.
Clark: So let\’s talk about a couple ways to protect that, not just the Social Security number, but other essential things. Like, what…would you do both in response to a big outbreak like this and what should you be doing on an ongoing basis? Kind of two questions here.
Roger: Well, sure. Based on the outbreak, the only way to protect yourself, and unfortunately, it\’s gonna be for years to come because 143,000,000 records. You may not get hacked for years, you know. Thieves go to what\’s called, \”the dark web\” and they buy this information. I read recently that the kind of information that was stolen from Equifax fetches between $5 and $10 on \”the dark web\” so people go buy thousand of these things and, you know, just start opening accounts in those records\’ names. To get through 143,000,000, it\’s gonna take quite a while. So the first thing to do is to freeze your account, you know. This is, unfortunately, gonna be what we\’re all going to be dealing with, like I said, going forward to protect your identity. So putting a security freeze on your account and you\’d need to do this at all three credit bureaus.
This is gonna be a little bit annoying and kind of cumbersome and it actually costs money to do based on the state you\’re in. It will be either $5 or $10. Here in California, it costs $10 per reporting agencies. So 30 bucks to freeze your credit accounts. Even here in California, the State of California Department of Justice Attorney General has put up a special bulletin on how to freeze your credit files and included there are links to Experian, Equifax, and TransUnion. So you can go directly. And I don\’t recommend calling these folks, people are getting disconnected, they\’re sitting on hold for a long time, there are just a huge volume of people trying to make…
Clark: There\’s millions of people, right?
Roger: Millions of people are trying to freeze and they\’re all trying to freeze right now. So be patient when you hit their websites, they\’re, you know, not designed to handle the influx of people that they\’re experiencing now. They\’re doing things to improve the volume that their websites can handle but sometimes it\’s been glitchy. Sometimes, the websites are crashing and you just have to come back and it\’s just the way it is. So…but be patient and do it. I\’m a little nervous myself because when you do put a freeze and if you\’re applying for credit, say, for a car or in my case we\’re trying to get an equity line, I can\’t put the freeze on right now because the underwriters have to have access to my account and it takes a few days to freeze and unfreeze. So I have to leave this off until we get a decision. I don\’t know when they\’re gonna, you know, look at my credit reports. So we\’re ready to go but we have to finish the underwriting process and then we can put a freeze on.
So the other thing you can do, which we have done…it doesn\’t prevent people from opening accounts in your name…but you can put an alert and this notifies you after an account has been accessed. So, somebody makes an inquiry to check your credit, solicit you for credit. If somebody tries to access an account without my express permission, they\’ll give me a holler. Like I said, it\’s an after-the-fact kind of thing so that…it\’s better than nothing, but it\’s not as good as freezing your account. Now, the other thing is because of the alerts and the fact that freezing your account only will protect you against new…somebody taking out new credit in your name, you have to start paying attention to your credit card bills. So when those statements come in, scan them just to see that the things that are being charged are things that you actually spent money on. I know a lot of folks, they\’re busy, the bills come in, they sit down to pay the bills or they do it online and they just click \”pay.\” So they\’re not really looking at the detail on their credit cards, they\’re just looking at, \”How much do I owe this month?\” And…
Clark: Right, or an \”auto.\” Sometimes it\’s an \”auto\” thing too, right?
Roger: Right. A lot of times we set up auto pay on these credit cards just because we don\’t have time, we can\’t be bothered. But if somebody\’s putting charges on your accounts, the sooner you come up with that information and tell the bank and freeze your account, the less liability you\’re going to have, which brings me to encouraging folks not to use their debit cards. One of the protections, when you buy stuff with a credit card goes away if you use a debit card, and that is there\’s a $50 maximum liability as long as you report to the credit card companies. So in theory, the bank works the same way with your ATM card. But think about this, if you charge something or you swipe your ATM card and that identity is frozen, and somebody takes thousands of dollars out of your checking account, it\’s your money that\’s missing while the bank does their investigation before they determine whether you get your money back.
Clark: Gotcha. I hear you.
Roger: It\’s your money. When you use a credit card, it\’s their money. Okay.
Clark: Right. Well, that also plays in the…a kind of larger theme of what you talk about too with, you know, using someone else\’s money, using the bank\’s money with growing your assets and all that. I think it\’s just like, a very…like a micro example of that in a different context, but…
Roger: Well, it\’s just another layer of protection because you\’re using…the bank\’s money is what\’s being risked to those thieves who are stealing identities from credit terminals, at stores, and gas stations, etc. So…yeah. I\’m one of those guys when I go into the gas station where they don\’t…my gas station doesn\’t take my credit card, it only takes the ATM card or cash. I feel all around the ATM scanner to see if they\’ve put a separate device in there if it\’s been altered in any way to grab the information off of my debit card, and then they\’ll put a little pinhole camera. So usually today, there\’s a little guard covering the keypad so your hand slides up underneath that, but sometimes some people put actually a little camera in there so that they can match the keystrokes with the magnetic information they\’ve stolen by putting a \”skimmer,\” is what they\’re called.
And to all feel around underneath there or, you know, get a little closer to keypad to make sure somebody isn\’t looking over my shoulder, at the numbers that I\’m punching in. So it\’s just a…you know, again, people call me paranoid, but this is how your identities are getting stolen, this is how people are losing money in their bank accounts. People are watching them at the ATM, people are watching them at the gas station. And, you know, putting that in…those little gizmos that are credit card readers and leaving them on for a little while and then pulling them off before anybody that owns the gas station really notices. And they\’ve collected, you know, information on dozens of credit cards or debit cards. And if they can combine that with the pin, it\’s not real hard to go to an ATM and start draining your accounts.
Clark: Wow. How about we shift over to some of the other scams that are happening because this is just general advice, I know that you talk about but phishing scams, do you wanna go there next?
Roger: Yeah, and that\’s a really good point. Anytime we see a major disaster or something that catches the news, inevitably, the crooks follow in the wake and try to snag people who are naturally nervous. So I\’ve seen a couple of emails pretending to be Equifax, click on this link because your account\’s been compromised, you know, or we\’re the IRS and you\’re in trouble, your account\’s been compromised. Click here to get more information or specifics or I\’m getting these phone calls at home now left on my answering machine, you know. This is the IRS and you will be prosecuted. You\’ve committed some heinous violation and you better call right now.
So these are going up more and more and then, unfortunately, with all the natural disasters, here poor Puerto Rico today, with the hurricane and in all the Caribbean Islands, with the last few hurricanes in Florida and Houston area, and down in Texas in the Gulf. There\’s tons of scams that come out of those too, from charities offering relief to contractors, and attorneys, and insurance adjusters, all kinds of service providers, you know. And they\’re just reaching out and give me a small deposit or respond to this, register for your FEMA money, and then it takes $100 to register. All kinds of things like that come out of these types of big events that most people know about. And, you know, that group worry. And that\’s what they\’re playing on.
So be very, very careful. If you get an email that looks like it\’s coming from one of these types of organizations, pick up the phone and give them a call because you\’ll find that it\’s rare that those kinds of communications come from the IRS or Social Security or your bank. They\’re usually trying to reach you in a different way. So if you initiate the call, you look up the number. Don\’t call the number that they left on your answering machine because obviously, that\’s their number and they\’ll answer it and pretend to be the bank.
Clark: That\’s helpful to go through those. I know it\’s no fun to talk about it, but it\’s a real thing and it can keep people from their goals to retire happy and to live the life that they\’re trying to live. So I think that those are some really practical tips that you\’ve shared today. Do you have anything else on your mind about this?
Roger: Well, yeah. There\’s a couple three things. We\’ve given away security pens for, God, five or six years now.
Clark: And you\’re talking about…this is a written pen, this is an actual…
Roger: This is…yeah. This is a Uni-ball, has a patented type of ink that actually soaks into the paper. So when you sign a check, thieves can\’t do the acid-wash trick to change the payee and how much money the check\’s been written for. It\’s pretty common. People steal your bills from the outbound mailbox. That\’s why never mail money…
Clark: Cash or check.
Roger: …or important communication by sticking it in your mailbox and putting that flag up. You know, where we live, they\’re not dropping the mail through the slot and we can leave mail for the mailman by putting the flag up on our mailbox. Don\’t do that with anything that\’s important that\’s outbound. Another thing…
Clark: That\’s a pretty neat swag item, it\’s not one of those cheapo pens. You\’re giving away some pretty nice stuff.
Roger: Well, it\’s a…you know, I have clients who come in just to get a new pen. They like the way they write and they like the security that when they sign something, they know it\’s really signed. Another thing I would encourage our listeners to invest in is an outstanding paper shredder. And what\’s important is it\’s not a strip shredder, and it\’s not a crosscut shredder. Those can be reconstructed. In fact, the identity protection workshop that I went to where I learned about these pens, the guy who put on the workshop showed us how fast he can recreate a document that went through a strip shredder or even a crosscut shredder. It doesn\’t take very long if you got some talent. And, you know, that\’s why a lot of people do dumpster-diving…criminals…and to gather information like that. We here at Gainer Financial, we use a…it\’s called a \”confetti shredder\” and it turns paper into dust.
Clark: All right.
Roger: There is no way that any of our client\’s information or our personal information is getting recreated into a document. Invest in a good shredder. You won\’t be sorry.
Clark: And a not cheapo pen.
Roger: Yeah.
Clark: Come talk to you to get the pen.
Roger: Yeah. Hey, when you come in for a consultation, we\’ll be happy to give you a pen. They come in both blue and black.
Clark: Well, I think that\’s probably a good place to start wrapping up. And for someone who is wanting to come and meet with you and learn more about you, there is a first step they can take. You wanna talk a little about the idea?
Roger: The Thought Organizer?
Clark: Thought Organizer.
Roger: Yes, the Thought Organizer. Well, I find the single biggest step to gaining control over your financial life and peace of mind is to organize your thoughts about why are you even saving money, what\’s it for, what do you want your life to look like. Once you create that context, decision-making becomes so much easier. Use the Thought Organizer.
Clark: Roger, thank you so much. It\’s been another great conversation with you. I always look forward to these. And I am excited about when we can get together again soon.
Roger: All right, Clark. Always a pleasure. Take care.
Clark: Thanks so much for listening to this episode of Retire Happy. Be sure to head on over to gainerfinancial.com to download your Thought Organizer to get started. Roger L. Gainer, ChFC, California Insurance license number 0754849 is licensed to sell insurance and annuity products in California, Illinois, Arizona, Pennsylvania, and New York. Roger L. Gainer is an investment advisor representative providing advisory services through HFIS, Inc., a registered investment advisor. Gainer Financial and Insurance Services, Inc. is not owned or affiliated with HFIS, Inc. and operates independently.
Thanks again so much and we\’ll see you next time on Retire Happy.