How to Make Your Security Someone Else's Problem

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Photo: Paul Taylor / Getty Images

It seems like every time I turn on the news, I hear of some bank or retail store getting hacked. Even the US government isn’t immune.  Most of us have a hard enough time worrying about the security of our home computer and certainly don't want the extra burden of worrying about our personal data sitting in places we have no control over. Wouldn't it be nice if someone else worried about our security for us?

What If we could make our information security (both personal and financial information) someone else's problem?

Thankfully we can transfer some of this burden over to 3rd party security services such as LifeLock, PayPal, and others. These businesses make it their job to keep our information secure so we don’t have to worry about it as much.

Services For Securing Your Credit Information

I’m an attorney and last week I was doing a bankruptcy for a client. We reviewed her credit history and found at least five open lines of credit that she did not open. This hurt her ability to get good credit rates on loans. She’s having a hard time making ends meet her high-interest rates, so she needs a bankruptcy. She didn’t have any credit monitoring service and had no idea why her credit was so bad. A service like LifeLock or Identity Force would have guarded and protected her social security number. Customers get an alert when their social security numbers are used to access their credit history.

With LifeLock and other similar services, they will stop the hackers before they get to you by monitoring your credit and the Internet black markets for your personal information, but what are they really doing? Can you do it yourself? The answer is yes, you can do some of it yourself, but these services make it easier for you.

You could regularly check your credit for services such as Credit Karma. You can also go to each of the credit bureaus and put an alert or freeze on your social security number and dispute any unknown creditors, but again, this puts the burden on you and you probably have lots of better things to do with your time.

Credit Karma is truly free, gives you the results of two of the three major credit bureaus and inquiries will not damage your credit. Doing it yourself requires more work and you don’t have a guarantee. If you happen to be hacked, you’re on your own. Like any insurance, it’s only worthwhile when you have to use it, but shifting the work of protecting your credit is definitely worthwhile.  Even with LifeLock, I still like to monitor my credit with Credit Karma.

Now, what does my client do? We suspect her identity has been stolen and someone is having a great time with her credit. She can dispute the charges and ultimately will not be responsible for paying the creditors back, but the greater damage is to her credit rating. LifeLock won’t help my client. There are very few services that will help.

Services like ID Watchdog will assume power of attorney to act on her behalf. It will save her the hours of calling the credit bureaus, federal agencies, and filing affidavits.

They will even hire an attorney for her. But it comes at a price, ID Watchdog's “ID Rehab for Previously-Existing Conditions,” carries fees in addition to the membership cost (it’s $80 per financial record error, $180 per civil court record error, and $280 per criminal court record error), but depending on the reach of your damage, it’s possible it could wind up being a bargain.

Securing Your Kids Personal Information:

It’s important to remember that your children have a credit rating too. Most services like LifeLock and ID Watchdog will allow you to add your children to your account for a small monthly fee or for free.

You never know who may steal your child’s identity. As a family law attorney, I’ve seen more than my fair share of parents, siblings, or other family members using a child’s social security number to get cable, cell phones, or even loans in the child’s name.  An ounce of protection is worth more than a pound of cure in these cases.

Protecting Yourself Whether You're a Buyer or Seller Online

Online Buyer Protection:

So, now you have some money in the bank, or a good low-interest credit card and something shiny sparks your interest on Etsy. You have to have it. You discover that the creator if this gem is in Antarctica. Should you dive right in and give them your credit card number or even worse your debit card number? Do people even live in Antarctica? You notice that the seller accepts Visa, Master Card, and PayPal. Like LifeLock, PayPal will protect your information from hackers. It’s an added level of security. If this Antarctic crafter doesn’t send you your sparkle, Etsy won’t help you, but PayPal and their buyer protection will. In fact, they will take the money out of the seller’s account right away to reimburse you and make the seller prove that she actually delivered something to you. She’s essentially guilty until proven innocent.

When you complete your purchase with a credit card through PayPal, you are double protected. If PayPal is unable to get the cost from the seller, you can go back to your own bank to reimburse you. PayPal lets you pay for your sparkle with your credit card without giving out your account number.

This shields you from identity fraud. This is great when you’re on the buying end.

Online Seller Protection:

But what if you’re the Antarctic crafter? Or a family attorney? I’m among a growing number of attorneys who are using PayPal to run credit cards. For a time, it was easier for me because I never knew how many cards I would get each month. Over the past five years, I’ve had hundreds of clients pay me with their PayPal accounts, or swiped their credit cards to pay into my PayPal account. I’m more protected than when I receive wire transfers, where my confidential account information is literally placed in the hands of my clients or checks that may bounce. I get the payment immediately, and PayPal gets a small fee.

But what happens when a client changes his mind? I had a client take their full retainer from my PayPal balance because she no longer wanted to pursue her case. Even though I’d worked on her case and she’d had an outstanding bill. PayPal offered no relief. I was now guilty until proven innocent. I disputed the claim, which took thirty days and at the end, my dispute was denied. Services cannot be guaranteed. But if you are selling services, make sure you have the added protection of a contract and/or an invoice. That way you can get relief in your local court of law.

PayPal can be equally tricky with the sale of goods. I know this is shocking, but some customers will lie to get out of paying for the item because they never ordered it and their account was hacked, claim it never arrived, it wasn’t exactly what he wanted, or it arrived broken.

  If the payment was truly fraudulent the PayPal seller is out of luck.

So, if you want to sell the engagement ring your ex-fiance gave you on Facebook Marketplace, what can you do to protect yourself? Use PayPal, but be careful about how you sell and who you sell to. Of course, more expensive items will be the most appealing targets for thieves.

To reduce the odds of a problem, try the following:

  • Ship only to verified addresses
  • Avoid delivering goods in-person (you’ll need proof of delivery from UPS or a similar shipper for PayPal to side with you)
  • Require a signature on expensive items
  • Clearly explain what you’re selling, including any confusing features or limitations that make customers unhappy (include photos of any defects or damage)
  • Communicate with unhappy customers promptly and politely

PayPal also offers a banking feature. You can transfer money into your PayPal account from the sale of goods or services, or your own bank account, you can then transfer this money onto a pre-paid debit card. It works just like the ones you get from the bank at ATMs, stores, or online. However, some of the same fraud protections users enjoyed when they were selling or buying goods create problems when they’re using the PayPal card. The limit on daily and monthly withdraws from your PayPal balance may be too restrictive for some users with a maximum of $2,000 per month. Like any other financial institution, the services may be down and users are left without recourse.

If you just don’t want to open a PayPal account, you’re still in luck. There are many other credit protectors out there. More and more, I see Visa Checkout options on the major websites I use. The thing I like the most about the Visa Checkout is that you can add more than one credit or debit card and it doesn’t have to be a Visa.

Once you’re on a website that supports Visa Checkout, you can log in and pay for your items right away. You stay on the same page when you click on the Visa Checkout Icon and sign in at the pop-up window, unlike PayPal where you’re redirected to PayPal’s main page. Not only is this more convenient, it’s likely safer. You’re not typing in confidential information which means there is less of a chance of someone hacking it.

Since Visa Checkout is new, they are offering you discounts to use some of their merchant services online. If this is something you may like, you should also check out other services like Amazon Payments and MasterPass.

Securing Your Information When Purchasing in a Store

Of course, this is well and good if you’re buying things online, but if you still want to go to a store or shopping mall there are ways that you can protect your credit card number. If you have a smartphone, you can use Apple Pay, Google Wallet, or Samsung Pay and leave your credit cards at home.  You will set up an account, scan your card information and now your smartphone can replace your wallet at a growing number of stores.

When making a purchase in a store (one that supports this method of checkout), all you have to do is place your phone near the credit card scanner, place your finger on the home button and the card reader will process your account. So easy! And your information is safe from hackers because each time you pay for something, they use a different proxy account. The thing I like the most is I get a notification every time I use my Apple Pay. Of course, I still check my account history to make sure no one has gotten a hold of my card information, just to be on the safe side.

Identity theft can be a nightmare. Fortunately, you have a variety of options to keep yourself safe. I believe why waste your time worrying about a hacker when you can have someone else do the worrying for you.