This Week in Your Wallet: April 3, 2012
Posted by Jean
A few weeks ago, I got a call from the fraud department at my credit card company. They had isolated a number of charges that, well, didn’t look like they came from me. $50 at Wendy’s. No, that wouldn’t be me. $20 at Dunkin Donuts. I’m guilty of the occasional $2.39 for a coffee and donut but that would be a lot of munchkins. Not me, again. And on the list went. Now, I’m wondering if I was one of the victims of the latest large security breaches.
On Friday, Visa and MasterCard announced that the data for one of their credit card processors, Global Payments Inc., had been breached. American Express and Discover have said they’re investigating as well. Initial reports said that this security breach put 50,000 cardholders at risk, but a press release that came out Sunday night puts that number closer to 1.5 million breached accounts. And, some estimates say the number could be six times higher.
While only account numbers were hacked — the criminals did not obtain names, addresses, or Social Security numbers, fortunately — the information that was stolen can be used to make counterfeit cards. In a statement, Global Payments said that “based on the forensic analysis to date, network monitoring and additional security measures, the company believes the incident has been contained.”
Meanwhile, Visa announced that it has provided banks the affected account numbers so they can “take steps to protect consumers through independent fraud monitoring and, if needed, reissuing cards.” Visa made it a point to note that the company has a zero-liability fraud policy that “exceeds federal safeguards” in protecting cardholders. As a general rule, consumers aren’t usually responsible for any fraudulent purchases, and if there is any liability, the Fair Credit Billing Act limits that liability to $50.
So the big question is: what do you do if your account has been hacked? The folks over at Identity Theft 911 recommend the following steps:
- Review the information on the breached account. Has the phone number or address on the account changed? A thorough review will tell you exactly which pieces of information have been compromised.
- Change all passwords and log-in credentials associated with the account.
- Notify your creditors of the breach.
For more tips on protecting yourself from data breaches, you can visit Identity Theft 911 here. And for more information on the Global Payments breach, I recommend checking this Wall Street Journal articleand this KrebsOnSecurity post – both give thorough accounts of the situation.
And now, here are the other headlines for the week:
Car loans come first?
When you go to pay that stack of bills on the kitchen table, which do you pay first: the mortgage, the electricity bill, or your car payment? It used to be that the mortgage came first, but new research suggests that the recession has turned Americans’ bill-paying habits upside down: people are now paying their car loans first.
TransUnion studied the bill-paying habits of 4 million Americans and found that, of people who were late on payments last year, 39% were delinquent on the mortgage, 19% were delinquent on their credit card bills, but only 10% were late on their car loan.
Ezra Becker, TransUnion’s vice president of research and consulting, hypothesizes that this change has to do with the job market. “Today, most people need cars to get to a job or look for a job,” he said. “That has made cars a priority.”
If you’re giving your car priority in payments, make sure you’re also paying the lowest possible interest rate. Many people don’t realize it, but you can actually refinance your auto loan to a lower rate. I tell you how, here.
And finally, while we’re tweaking your bill-paying habits, why not pay them as they come in? This is actually my Money Rule #38. Research has shown that people who pay bills as they come in are happier than those who sit down at the end of the month, write ten checks and watch as the money flies out of the account.
Let’s talk about divorce
Over the weekend, I spoke at the first-ever U.S. divorce expo. Yes, like a bridal expo… just, the reverse. Founders Francine and Nicole Baras looked around at all the information that is available to women when they’re starting a marriage and wanted to give them just as much information for when they decide to end one. The result was Start Over Smart, a collection of over 100 booths containing divorce attorneys, mediators, financial planners and even hairstylists (for that fun, post-divorce makeover). The TODAY show did a nice profile of the expo, and I have to say that I had a lot of fun speaking to the crowd there.
The event served as a great warm-up for the next two weeks of Cash Call, where we’ll be talking about marriage and divorce over 50. There are many emotional concerns before you do either later in life, but what about the financial implications? How do you blend financial lives in your 50’s (or later)? How do you split financial lives after decades of working together? We’ll address these questions and more, so I hope you’ll tune in. And, as always, if you have questions of your own on these topics, please email me at jean@jeanchatzky.com – I’d love to answer them on the air.
Have a great week!
Jean