Barefoot Investor: Stop coronavirus becoming Christmas for crooks
Clearing your name after you’ve become the victim of identity fraud can take hours of work so the best approach is to keep yourself safe from scammers, writes the Barefoot Investor.
Barefoot Investor
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It all began with an email from a stranger:
“I was walking in a park … and I found your wife’s credit card.”
Interesting!
However, my wife doesn’t have a credit card … or does she?
“Of course I don’t!” she grumbled, and then added: “And you’re going to write about this … aren’t you?”
“Of course I will!” I laughed.
(Nothing bad ever happens to me, it’s all just fodder for this column.)
Still, something smelled a little off.
For one, the stranger found the credit card in the suburb my wife grew up in.
And for two, the coronavirus may have created mass unemployment but scammers have never been busier:
There’s the boost to JobSeeker, multiple coronavirus cash supplements and juicy JobKeeper payments to scam.
And the icing on the cake?
Super funds are doling out $20,000, and most people don’t even know how many super accounts they have!
Seriously, corona is like Christmas for crooks!
And it’s not just me saying it. IDCARE is a not-for-profit organisation that helps victims of identity fraud.
Its founder and Managing Director, Professor David Lacey, told me that their caseload has jumped by a third since lockdown started.
Here’s why you don’t want to get scammed: Professor Lacey told me that the job of clearing your name after identity fraud takes the average person 27.5 hours of listening to “hold music” at various banks.
I NEVER THOUGHT IT WOULD HAPPEN TO ME
After all, Liz and I are very security conscious:
I treat any papers with my private details on them like financial germs that could infect me.
Instead, Liz and I have a shared secure email that all our bills go to.
(And when we went full digital I scanned all the old mail I had lying around — and destroyed it. On the farm we have a 44-gallon drum as an incinerator … but if you’re in a more urban setting a $40 shredder from Officeworks is fine, though not nearly as fulfilling.)
What’s more, we’ve put “bans” on our credit report.
What’s a credit report?
It contains your personal information and credit history — good, bad, and otherwise.
Banks use this as a check to determine whether they’ll lend you money.
(Your credit report is maintained by credit reporting agencies — there are three in Australia and the biggest is global conglomerate Equifax.)
Know this: if your identity is stolen, your credit report is where it will show up first.
Also know this: if you Google “ban my Equifax credit report”, you can request to have a ban put on your credit report. And legally they also have to tell the other two credit reporting agencies to follow suit on your behalf.
That way no one can access your credit report, meaning scammers can’t run up credit in your name.
The only sticking point, if you do choose to ban your credit report, is that you have to write to Equifax (a) whenever you apply for a loan (to lift the ban, so the lender can check your history), and (b) every 12 months, since bans only last for a year.
I’ll tell you this: I’m putting the ban on mine.
Now you may be wondering what happened with that credit card the kind stranger found.
Well, she sent it to us — via our secure post office box.
After speaking to the head of fraud at the bank that issued the card, we worked out it was a case of mistaken identity.
Very lucky for us. Very unlucky for the other Liz.
Tread Your Own Path!
READERS WRITE
HOW A TEENAGER WORKS 5 HOURS … AND GETS $1500
SABRINA WRITES: I am an 18-year-old and have been laid off from my job at a swim centre because of the coronavirus.
The company had applied for the JobKeeper payment, which I have tagged along on. I just found out that, even though I only worked five hours a week, I will be getting $1500 each fortnight!
How do I go from managing $150 to managing $1500? I was thinking of keeping the $150 I normally make and saving the rest. What would you do?
BAREFOOT REPLIES: Now that’s what I call Corona Cash!
I have to tell you, as a taxpayer, I’m a little peeved about this.
But, as the Barefoot Investor, I’m proud of the fact you’re contacting me to do something smart with it.
Most 18-year-olds in your situation would go to Bali!
(Oh actually, you can’t do that, can you? Ha! Well, at least you can go take a trip on Bendigo’s world-famous Talking Tram, so long as you adhere to social distancing … only four people per carriage. Rock on!)
Still, you’ve got the right idea: keep living off the income you’re used to, and use the rest to set yourself up financially.
My advice would be to stash away $2000 in a Mojo account, for when it’s time to move out of your parents’ place.
Then, set up your buckets (including one you nickname “Sabrina’s House Deposit”) and start saving for your own place.
You may feel that’s a long way off, and it is.
However, each time you flick open your banking app you’ll see it slowly growing.
Thanks for making my tax dollars actually do something productive!
YOU’RE WRONG, BAREFOOT
PETER WRITES: I was not happy with your answer to Rebecca a few weeks ago.
You disagreed with her husband, who told her it was “better for us to have control of our money rather than a superannuation company”.
If that company was such as AMP, with poor growth, ongoing fees and other rip-offs (as exposed by the Royal Commission), then her husband’s suggestion may have been the better way to go.
BAREFOOT REPLIES: That’s like saying: “You drive a Holden Barina. It’s a terrible car. So instead, you should sell it and ride a horse.”
Who says you have to drive a Barina?
Most people have the ability to choose a good super fund with low fees. My view is that if you don’t like your super fund you should be looking to move to a better fund rather than flogging a dead horse.
Saddle up!
YOU MADE A MOTHER CRY
JEN WRITES: Your Mother’s Day column brought a tear to my eye — touching stories of strong women taking control of their lives.
My husband and I read your book a few years ago and it completely changed the way we manage our money.
Recently the coronavirus has hit us hard, as my hours have been drastically reduced and our side business has ground to a halt, but you have us covered.
Our three-year buffer in the bank means we can sit back and wait for things to improve. A deep bow of respect to you, and to your Mum!
BAREFOOT REPLIES: I’m used to getting hundreds of questions, but last week’s Mother’s Day column melted my inbox — in a good way!
And you know what? I agree with you: there’s so much negativity in the media right now that it’s nice to focus on the one person in your life who’s really selfless — your mum.
After all the doom and gloom lately, it was really lovely to share some positive stories for once.
Thanks for sharing yours. You Got This!
If you have a money question, go to barefootinvestor.com and #askbarefoot
The Barefoot Investor holds an Australian Financial Services Licence (302081). This is general advice only. It should not replace individual, independent, personal financial advice.
The Barefoot Investor for Families: The Only Kids’ Money Guide You’ll Ever Need (Harper Collins)RRP $29.99