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REVERSE THE CASH FLOW

“Where did all my money go?” It’s a question you’ve asked yourself too often as you peer into your purseor your bank statement and notice all the numbers on the wrong side of the ledger. There’s an answer to your question: The money went where it always goes – to bills, mortgage payment, home improvement costs, health care – and also to that amorphous category of “miscellaneous.”

That miscellaneous spending is harder to account for: the extra charge for a service you aren’t using, food spending inflated by lunches out, the shopping cart of impulse purchases while at the store for light bulbs or cat food. Instead of miscellaneous spending, call them what they are: money leaks. They suck the cash right out of your pocket and leave you wondering where it went. On their own, they’re not big draws on your resources, “but remember, it’s always the little things that will drain the pool,” says Dave Ramsey, author of The Total Money Makeover. Start plugging those day-to-day money leaks instead.

BEWARE OF IMPULSE BUYS That retail outlet that carries everything is great for saving time and money. But on your way to what you really need to buy, you’re going to pass displays for tempting gadgets and doodads, and pretty soon you may succumb to an impulse purchase or three, says Ramsey, who has his own collection of gadgets to prove it. Now he writes a list before he leaves the house. “And I don’t buy anything that’s not on the list period,” he says.

SHOP THE SPECIALS Check out websites that help you plan your grocery buys around weekly specials – you’ll save about 20 percent, says consumer advocate Clark Howard, co-author ofGet Clark Smart: The Ultimate Guide to Getting Rich from America’s Money-Saving Expert. If you spend $200 a week, that’s $2080 each year. Two of Howard’s picks: Cool savings.com and CouponMom.com.

BUY OFF LABEL Try store brands on prepackaged items. Many times products are made by the name-brand makers, but the prices are usually lower, says Ephraim Leibtag, economist with the U.S. Department of Agriculture. Example: cereal, for which store prices are usually 10 to 20 percent less.

SKIP DESSERT At restaurants, the profit margin is the highest on dessert, says Howard. “Something that might cost a quarter to make, they will sell to you for $5.95 or $6.95,” he says. If you and your spouse normally eat out with dessert twice a week and abstain instead, you’ve saved $1,248 in a year. Can’t beat the thought of doing “without”? Order one and split it. You’ll still save $624.

RECLAIM THOSE REBATES Next time a manufacturer offers you a rebate, take it. Most of us factor a rebate into the price when we buy. But only 21 percent of us actually claim that money, according to a study by the Promotion Marketing Association.

ESTIMATE AHEAD OF TIMEWhen Paul Brown picked up his car after buying four tires; he discovered the garage had added $44 for an extended warranty, and $15 for chrome valve stem covers. “It was more than I had estimated in my head,” says Brown, a consumer advocate for the U.S. Public Interest Research Group. He made his garage remove the charges. His advice: Figure in advance what something’s going to cost. Better yet, have the store or service provider figure an estimate for you – in writing. This gives you leverage to lower the price if it comes in higher than projected.

FIGHT FEES Your bank levies a $35 “insufficient funds fee,” and yes, that little math error might have been your fault. But many financial institutions – from banks to credit card companies to your local utility or cable TV provider – may waive the charge if you ask nicely, especially if you’re a first-time or infrequent offender. The same goes for companies that assess fees for letting you talk to a human being, such as banks and other companies with customer support lines.

DEMAND A DEAL Phone, cable, and Internet service providers often give specials to attract new business yet do nothing extra for the loyal customer who’s been a subscriber for years. You can change that, says Edgar Dworsky, founder of ConsumerWorld.org, an online public resource guide. Dworsky’s phone/cable/Internet package cost $105 and he knew the company was offering a better rate to new customers. He called and requested the same deal. His savings: more than $30 a month. If the company won’t play ball, become a new customer elsewhere.

PLAY DETECTIVE Pick just one or two different bills each month and go through them line by line. Look especially for small, unexplained charges, fees, and add-ons. Many of these will be for services you never requested, but the terms of service allow the company to bill you automatically until you complain or request the charge of service be removed. Do it. It may only amount to $6 or $7 a month, but it’s one more leak that, once plugged, saves you a lot over time.

ASK “WHY”? Several months after buying a fixer-upper home in Harrisburg, Pennsylvania, Daniel Butler noticed that his gas bill, normally $60 to $80, had climbed to almost $200. He did a quick tour of his home and found that a window hidden behind a curtain had opened just enough to let in the cold air. Sometimes your money leak can be as simple – but as costly – as that.

THREE SIMPLE MANAGEMENT TIPS CAN HELP YOU

REDIRECT YOUR MONEY

PLAN AHEAD

PAPER – TRAIL IT

ALLOW YOURSELF “FUN MONEY”

Take Charge: Fighting Back Against Identity Theft (formerly: "ID Theft: When Bad Things Happen to Your Good Name")

TABLE OF CONTENTS

• Introduction
• How Identity Theft Occurs
• Identity Theft Victims: Immediate Steps
• Resolving Specific Problems
• Staying Alert
• Minimizing Recurrences
• Appendix

INTRODUCTION

In the course of a busy day, you may write a check at the grocery store, charge tickets to a ball game, rent a car, mail your tax returns, change service providers for your cell phone, or apply for a credit card. Chances are you don't give these everyday transactions a second thought. But an identity thief does.

Identity theft is a serious crime. People whose identities have been stolen can spend months or years and thousands of dollars cleaning up the mess the thieves have made of a good name and credit record. In the meantime, victims of identity theft may lose job opportunities, be refused loans for education, housing, or cars, and even get arrested for crimes they didn't commit. Humiliation, anger, and frustration are among the feelings victims experience as they navigate the process of rescuing their identity.

Working with other government agencies and organizations, the Federal Trade Commission (FTC) has produced this booklet to help you remedy the effects of an identity theft. It describes what steps to take, your legal rights, how to handle specific problems you may encounter on the way to clearing your name, and what to watch for in the future.

HOW IDENTITY THEFT OCCURS

I first was notified that someone had used my Social Security number for their taxes in February 2004. I also found out that this person opened a checking account, cable and utility accounts, and a cell phone account in my name. I'm still trying to clear up everything and just received my income tax refund after waiting four to five months. Trying to work and get all this cleared up is very stressful.

From a consumer's complaint to the FTC, July 9, 2004

Despite your best efforts to manage the flow of your personal information or to keep it to yourself, skilled identity thieves may use a variety of methods to gain access to your data.

How identity thieves get your personal information:

• They get information from businesses or other institutions by:
  • stealing records or information while they're on the job
  • bribing an employee who has access to these records
  • hacking these records
  • conning information out of employees
    
• They may steal your mail, including bank and credit card statements, credit card offers, new checks, and tax information.
  
• They may rummage through your trash, the trash of businesses, or public trash dumps in a practice known as "dumpster diving."
  
• They may get your credit reports by abusing their employer's authorized access to them, or by posing as a landlord, employer, or someone else who may have a legal right to access your report.
  
• They may steal your credit or debit card numbers by capturing the information in a data storage device in a practice known as "skimming." They may swipe your card for an actual purchase, or attach the device to an ATM machine where you may enter or swipe your card.
  
• They may steal your wallet or purse.
  
• They may complete a "change of address form" to divert your mail to another location.
  
• They may steal personal information they find in your home.
  
• They may steal personal information from you through email or phone by posing as legitimate companies and claiming that you have a problem with your account. This practice is known as "phishing" online, or pretexting by phone.

How identity thieves use your personal information:

• They may call your credit card issuer to change the billing address on your credit card account. The imposter then runs up charges on your account. Because your bills are being sent to a different address, it may be some time before you realize there's a problem.
  
• They may open new credit card accounts in your name. When they use the credit cards and don't pay the bills, the delinquent accounts are reported on your credit report.
  
• They may establish phone or wireless service in your name.
  
• They may open a bank account in your name and write bad checks on that account.
  
• They may counterfeit checks or credit or debit cards, or authorize electronic transfers in your name, and drain your bank account.
  
• They may file for bankruptcy under your name to avoid paying debts they've incurred under your name, or to avoid eviction.
  
• They may buy a car by taking out an auto loan in your name.
  
• They may get identification such as a driver's license issued with their picture, in your name.
  
• They may get a job or file fraudulent tax returns in your name.
  
• They may give your name to the police during an arrest. If they don't show up for their court date, a warrant for arrest is issued in your name.

If Your Personal Information Has Been Lost or Stolen

If you've lost personal information or identification, or if it has been stolen from you, taking certain steps quickly can minimize the potential for identity theft.

Financial accounts: Close accounts, like credit cards and bank accounts, immediately. When you open new accounts, place passwords on them. Avoid using your mother's maiden name, your birth date, the last four digits of your Social Security number (SSN) or your phone number, or a series of consecutive numbers.

Social Security number: Call the toll-free fraud number of any of the three nationwide consumer reporting companies and place an initial fraud alert on your credit reports. An alert can help stop someone from opening new credit accounts in your name. See consumer reporting company contact information. For more information about fraud alerts, see the Fraud Alerts box.

Driver's license/other government-issued identification: Contact the agency that issued the license or other identification document. Follow its procedures to cancel the document and to get a replacement. Ask the agency to flag your file so that no one else can get a license or any other identification document from them in your name.

Once you've taken these precautions, watch for signs that your information is being misused. See STAYING ALERT.

If your information has been misused, file a report about the theft with the police, and file a complaint with the Federal Trade Commission, as well. If another crime was committed for example, if your purse or wallet was stolen or your house or car was broken into report it to the police immediately.

IDENTITY THEFT VICTIMS: IMMEDIATE STEPS

If you are a victim of identity theft, take the following four steps as soon as possible, and keep a record with the details of your conversations and copies of all correspondence.

1. Place a fraud alert on your credit reports, and review your credit reports.

Fraud alerts can help prevent an identity thief from opening any more accounts in your name. Contact the toll-free fraud number of any of the three consumer reporting companies below to place a fraud alert on your credit report. You only need to contact one of the three companies to place an alert. The company you call is required to contact the other two, which will place an alert on their versions of your report, too.

Equifax: 1-800-525-6285; www.equifax.com; P.O. Box 740241, Atlanta, GA 30374- 0241

Experian: 1-888-EXPERIAN (397-3742); www.experian.com; P.O. Box 9532, Allen, TX 75013

TransUnion: 1-800-680-7289; www.transunion.com; Fraud Victim Assistance Division, P.O. Box 6790, Fullerton, CA 92834-6790

Once you place the fraud alert in your file, you're entitled to order free copies of your credit reports, and, if you ask, only the last four digits of your SSN will appear on your credit reports.Once you get your credit reports, review them carefully. Look for inquiries from companies you haven't contacted, accounts you didn't open, and debts on your accounts that you can't explain. Check that information, like your SSN, address(es), name or initials, and employers are correct. If you find fraudulent or inaccurate information, get it removed. See Correcting Credit Reports to learn how. Continue to check your credit reports periodically, especially for the first year after you discover the identity theft, to make sure no new fraudulent activity has occurred.

2. Close the accounts that you know, or believe, have been tampered with or opened fraudulently.

Call and speak with someone in the security or fraud department of each company. Follow up in writing, and include copies (NOT originals) of supporting documents. It's important to notify credit card companies and banks in writing. Send your letters by certified mail, return receipt requested, so you can document what the company received and when. Keep a file of your correspondence and enclosures.

When you open new accounts, use new Personal Identification Numbers (PINs) and passwords. Avoid using easily available information like your mother's maiden name, your birth date, the last four digits of your SSN or your phone number, or a series of consecutive numbers.

If the identity thief has made charges or debits on your accounts, or on fraudulently opened accounts, ask the company for the forms to dispute those transactions:

• For charges and debits on existing accounts, ask the representative to send you the company's fraud dispute forms. If the company doesn't have special forms, use the sample letter to dispute the fraudulent charges or debits. In either case, write to the company at the address given for "billing inquiries," NOT the address for sending your payments.
  
• For new unauthorized accounts, ask if the company accepts the ID Theft Affidavit. If not, ask the representative to send you the company's fraud dispute forms. If the company already has reported these accounts or debts on your credit report, dispute this fraudulent information. See Correcting Credit Reports to learn how.

Once you have resolved your identity theft dispute with the company, ask for a letter stating that the company has closed the disputed accounts and has discharged the fraudulent debts. This letter is your best proof if errors relating to this account reappear on your credit report or you are contacted again about the fraudulent debt.

3. File a report with your local police or the police in the community where the identity theft took place.

Then, get a copy of the police report or at the very least, the number of the report. It can help you deal with creditors who need proof of the crime. If the police are reluctant to take your report, ask to file a "Miscellaneous Incidents" report, or try another jurisdiction, like your state police. You also can check with your state Attorney General's office to find out if state law requires the police to take reports for identity theft. Check the Blue Pages of your telephone directory for the phone number or check www.naag.org for a list of state Attorneys General.

4. File a complaint with the Federal Trade Commission.

By sharing your identity theft complaint with the FTC, you will provide important information that can help law enforcement officials across the nation track down identity thieves and stop them. The FTC can refer victims' complaints to other government agencies and companies for further action, as well as investigate companies for violations of laws the agency enforces.

You can file a complaint online at www.ftc.gov/idtheft. If you don't have Internet access, call the FTC's Identity Theft Hotline, toll-free: 1-877-IDTHEFT (438-4338); TTY: 1-866-653- 4261; or write: Identity Theft Clearinghouse, Federal Trade Commission, 600 Pennsylvania Avenue, NW, Washington, DC 20580.

Be sure to call the Hotline to update your complaint if you have any additional information or problems.

The Identity Theft Report

An identity theft report may have two parts:

Part One is a copy of a report filed with a local, state, or federal law enforcement agency, like your local police department, your State Attorney General, the FBI, the U.S. Secret Service, the FTC, and the U.S. Postal Inspection Service. There is no federal law requiring a federal agency to take a report about identity theft; however, some state laws require local police departments to take reports. When you file a report, provide as much information as you can about the crime, including anything you know about the dates of the identity theft, the fraudulent accounts opened and the alleged identity thief.

Note: Knowingly submitting false information could subject you to criminal prosecution for perjury.