That’s Not Me: Identity Theft

Today, we’re talking about identity theft which means I’m going to try and condense a two-hour workshop into a few paragraphs so here goes…Right out of the gate, let’s make sure we’re using proper definitions. There’s identity theft and there’s actual theft. If someone steals your actual credit card/credit card number and heads off to BJ’s for diapers (a surprisingly common thing to do since diapers can be resold), under our current legal system, that isn’t identity theft, that’s actual theft. They stole your money. Now, let’s say that person “borrowed” your personal data, opened a new credit card and THEN went shopping for diapers at BJ’s—that’s identity theft. Does it make it any less traumatic to differentiate between the two? No, not in the slightest but it is good to know they are different things from a legal perspective.

If you are worried about someone stealing your identity, it’s both good and depressing to know that a common culprit is someone you know or lives (or works) with you. Account takeover fraud is one of the most prevalent types of fraud and one of the most preventable. Something as simple as using two-factor authentication when accessing any of your accounts goes a long way towards preventing fraudulent transactions (and it goes without saying that you really shouldn’t be doing any financial stuff from your phone—yup, I know that’s killing some of you but it’s a fact…). When was the last time you swept through your various services and changed your passwords? If you have those passwords automatically load when you enter a site, you should probably just go ahead and send the thief a Venmo now (another startling vulnerable system).

An increasing type of identity theft is medical identity theft where someone creates a duplicate persona then uses it (or more likely, sells it) to access medical care. Unfortunately, for our aging population, the more you use our medical system, the more likely this is to happen—sort of a double whammy of unpleasantness when you need that MRI only to discover that your insurance already paid for someone else’s MRI and effectively used up your sliver of available and affordable benefit. Of course, our inefficient healthcare system doesn’t help the situation with its sometimes unfathomable billing practices but that’s a bigger fish than we can fry here. Suffice it to say, keeping track of your medical records (or your parents) goes a long way towards making sure you are on top of your exposure.

Two other common forms that we’re seeing more and more are tax-related identity theft (where someone files an early return using your Social Security number and claims a refund before you’ve even pulled all your records together) and, particularly during the pandemic, unemployment benefits identity theft. This is primarily based on all those identities that were stolen from the IRS and Equifax a number of years ago. Why, you might ask? These thieves were no dummies. They stole the information, sat on it for a few years until it became stale, then swooped in and bombarded the systems when they saw weakness.

So what can you do? Some simple things are:
1) Always select “credit” when you are using your debit card. 
2) Learn to love your shredder (or drop your paperwork off here and use the commercial service we use here). 
3) Have everything online?  Make sure you pull down a hard copy at least annually so you have something to work from if you do have to deal with a theft issue. 
4) Carve out a few moments and pull your full credit report. You are entitled to one free report from each of the main agencies once a year so head out to www.annualcreditreport.com and pull one of the reports then mark your calendar to repeat the process four months from now. Look through the report and make sure you recognize all of the addresses listed, the various lines of credit reported, and whether there is an “authorized signer” on any of the cards. Repeat the process for everyone in your family, including your youngsters – stealing/cloning a child’s identity is surprisingly popular since it is usually years before anyone discovers the issue.

Another strategy is to “freeze” your credit which can help to reduce your risk of identity theft, since potential new lenders can’t access your credit reports while the freeze is in place. Although, you should know that in doing so you might not be able to renew your health insurance if you use the NYS (or other state-based) Exchange or a government-based program, your property/casualty insurance premiums will probably increase since those companies pull their client’s credit scores when calculating insurance costs or making changes to a policy, and accessing the Social Security Administration’s system will be problematic if you don’t already have an account established.

There’s lots more but this is a weekly missive, not a weekly War & Peace chapter. Please feel free to contact us if you have any questions.


The Biggest Divorce Mistakes Women Make: $even Figures Podcast

Kitty Bressington, CFP®, CDFA, was featured on the podcast, $even Figures, with Sandy Waters. With more than 20 years of experience, Kitty provides affordable, objective, well-explained financial advice helping clients understand the long-term ramifications of the financial decisions being made, particularly during the course of a separation and/or divorce. Kitty is also founding director of the Foundation for Women’s Financial Education, a non-profit dedicated to improving the financial literacy of women in the Greater Rochester area and local sponsor of the Second Saturdays Divorce workshop—a monthly workshop designed to equip you with unbiased legal, financial, and emotional information you need to make the right decision for your marriage and your life.

Listen now: 231. The Biggest Divorce Mistakes Women Make (audacy.com)


In Search of Greener Grass: Mulling Over Cash Flow

This week, while playing in my (beginner) golf league, I was pondering the green grass while learning how to play “best ball”. That led me to start wondering about how much water is used to keep things so green, what sorts of chemicals was I standing in and how on earth do they justify these courses in other, drier parts of the country? Then I channeled my late husband and hit a shot straight down the fairway and suddenly I was less concerned about all those environmental things…perspective is a wonderful thing.
 
So, let’s talk about those other parts of the country. At least once a month (and sometimes more often) I have someone comment to me that they are going to head West or South (not so much East) and get out of New York. Putting it right there on the table…yes, we pay some pretty decent size taxes here in the great state of New York. I’m not going to deny it. In fact, I’m going to embrace it. That being said, there is so much more to a cash flow plan than taxes—I can already hear some of you definitely drawing blood as you squeeze your fingers into fists of outrage but stick with me on this one. Let’s look at some other big-ticket cash flow items.

Health insurance: I let my fingers do the walking this week and did a little shopping for health insurance in three fairly popular transplant destinations. In North Carolina, the exact same plan as the one I carry is 60% more expensive. In Florida, the difference was 24% more (with a $2k higher deductible) and in Boise, while I’d be paying slightly less, I could be denied coverage (something not allowed in New York). I had a hard time believing that Boise, Idaho, was on a “Best Places to Retire” list so you can imagine my surprise when I found it on several. Another aspect to this research is access to medical facilities.  Comparable costs won’t do you any good if you have to drive more than an hour for a simple check-up or none of the local doctors are taking new patients.

Utility / water rates: As I think I’ve mentioned before, when my parents moved from Penfield to Avon, my mother nearly had a heart attack when they received their first water bill since, apparently, Avon pipes their water through gold pipes by way of Mars (there’s a whole story behind our water rates but we’re talking finances here, not politics). Thinking of heading West or South? Water rates for basic residential usage in Jacksonville, FL, average $43/month and can run more than three times that in some of areas further West. 

Vehicle incidentals: Let’s assume you are taking your car with you. If I were moving to Iowa, I could be paying more than $195 to re-register my car (versus the $55 check I just mailed). Heading south to Maryland, that’s going to be $135. Filling the tank on the way to the DMV, you’ll be paying ~$2.88/gallon for gas in Iowa and $3/gallon in Maryland. Sure, your car insurance in Boise is about half of what you are paying in New York but what they don’t tell you is that your coverage is less robust than what you enjoyed in New York because our mandatory minimums are higher than other states. 

Stepping lightly on a third rail, climate change: The changes we’re seeing in the environment can have knock-on impacts on your costs of living. For example, it’s getting harder and harder to secure cost-effective homeowner’s insurance along parts of the coast and in fire-prone areas. In some of these areas, it isn’t a matter of the insurance costing more, it’s a matter of not even being able to secure coverage.  Does your financial planning accommodate paying to rebuild your house? 

Finally, and perhaps most importantly, travel: If you are moving to state A and your loved ones are in state B, make sure you budget for travel back and forth to see them. It doesn’t do you any good to eliminate the NYS state and property taxes and end up spending more on Delta to visit those budget-busting grandbabies.

Of course, there are lots of reasons to move and I don’t want to discourage anyone who is thinking of moving from doing so. What I would encourage people to consider is that moving isn’t really a fiscal thing—it’s a deeply emotional one. Long before you put the numbers together, make sure you think through the “why” of your move. If you are pretty sure of your “why” the next step will be to build a Cash Flow Worksheet (remember those) as if you already lived there. Despite some pretty glaring faults, the internet is very useful when it comes to finding out how much something costs in other places. As with so much that has to do with our finances – it’s not about making the right or wrong choice, it’s about making an educated choice.