Your Money & You – May 2010

Protecting yourself from identity theft

Do you keep your letterbox locked? Do you change your computer passwords and bank account PINs often? If you don’t you may fall victim to identity theft.

The Australian Bureau of Statistics reported that in 2007 there were over 620,000 victims of identity fraud and identity theft in Australia. (ABS Statistics 4528.0, Personal Fraud Australia, 2007)

Identity theft is where someone wrongfully obtains and uses another person’s personal data in a way that involves fraud or deception. Typically, it’s when a criminal steals or comes into possession of your personal information such as your name, passwords, credit/debit card details, address, date of birth, bank account, drivers’ licence etc and assumes your identity to commit fraud.

There are a number of different ways scammers can steal your identity. They can easily get a lot of personal information about you from:

• your wallet or purse;
• rummaging through your rubbish; or
• stealing your mail.

If you use online banking you should be particularly careful. Scammers sometimes send emails pretending to be from your financial institution asking for your account details and passwords. Or they can use software to spy on your computer.

Case study: Private Tim Jones’ email

One day Private Jones received an email that seemed to be from his bank asking him to re-confirm his personal details and re-set his password. Private Jones had never received a request like this before but thought it was a good idea and the email looked real after all.

After clicking on the link in the email he was taken to a plain-looking website where he was supposed to enter his details. Alarm bells rang and he decided to phone his bank to see if the request was legitimate. They informed him that it was a scam where criminals collect your personal details and passwords so they can access your money in your account.

The bank also confirmed that they would never ask someone to provide personal details through an email.

Ways you can protect your financial identity.

1. Check your credit report at least once a year. This way you can make sure no-one is using your name to borrow money or run up debts. You can get a free copy of your credit report from Veda Advantage and Dun and Bradstreet.
2. Thoroughly check your account statements and make sure you receive all expected mail such as statements and bills. Follow up any unfamiliar transactions on your bank account statement by contacting your bank or financial institution. A missing letter could indicate that a thief stole the letter from your letterbox or changed your billing address.
3. Destroy personal information – don’t just throw it out. You should shred or cut up old bills, account statements or cards to prevent scammers from getting hold of your personal information.
4. Lock your letterbox. Make sure that you have a secure lockable letterbox. Check the letterbox regularly and remove mail shortly after it has been delivered. If you are going away ask a neighbour you can trust to collect your mail for you or ask the Post Office to keep it for you until you get back.
5. Make your passwords for online activities such as banking, hard to guess. Use combinations of letters, numbers and punctuation for your passwords and change them frequently.
6. Never put financial information (such as account numbers, credit card numbers, PINs or passwords) in an email. Email is not secure. Scammers can intercept your email, find out your email address and guess your online email password.
7. Never do internet banking on public computers. Public computers may have less security than your own and the details of your activities may be stored.
8. When you use a secure website on your computer, such as your bank website or your email, make sure you always log out fully.
9. Disable pop-ups in your browser so that scammers cannot install a keylogger program on your PC. Most internet browsers let you block pop-ups by selecting ‘Turn on pop-up blocker’ or a variation of this term under the ‘Tools’ or ‘Settings’ menu.

If you think your identity has been stolen…
If you think your identity has been compromised you should contact the following organisations:

• Your financial institution to report any unauthorised transactions
• Your local, State or Territory police
• Your local Post Office to see if your mail has been diverted to another address
• A credit reporting agency to let them know your credit report may have been compromised.

For more information about identity theft and other types of scams visit
www.fido.gov.au and www.protectfinancialid.org.au.

E-mail ASIC with topics that interest you via ADFcolumn@asic.gov.au.

Tony D’Aloisio BA LLB (Hons)
Chairman
Australian Securities & Investments Commission

Changing your career - Making a smart decision

Would you buy a house without a conservative and objective examination of the pros and cons?

Changing your career deserves the same careful examination. Any such decision based on quick impressions (or worse still) on the opinions of others, may prove to be costly both to your career and to the financial health and happiness of your family. In fact, a poor career move is likely to prove more costly than a poor property investment.

For example, some ADF personnel conclude (often based on the ill-informed opinions of others) that military superannuation leaves a lot to be desired. Of course, it could be improved (as could any scheme); however, for longstanding members of the ADF, military superannuation offers generous and certain retirement benefits, an outcome that is especially desirable in difficult economic times.

So, if you’re thinking about changing your career, consider the following five key points:

1. Remuneration PackageWrite down a comprehensive list of the salary and fringe benefits (the package) offered in the new position, compared to your current one in the ADF. Try not to leave out things that you might currently take for granted, such as free medical and dental benefits;
2. Job Security Make an assessment of the job security offered in the new position, especially given the prospects for uncertain economic times over the next few years. Assess how you will accumulate savings to provide for the lean days that ‘go with the territory’ in the private sector, and consider the termination arrangements in your new contract or employment conditions;
3. Job Satisfaction Consider whether you will actually like and be satisfied with the work in the new position. Don’t change careers for the money alone. If you don’t like what you’re doing in six months, all the money in the world will mean very little. You’ll feel pressured and demotivated and that will impact upon your personal and family relationships;
4. Impact on Your Family Consider the impact of your new position on your family. Many people take on a new career because they believe that family relationships and opportunities will be improved. That’s a fine motive, so long as the conclusion is a valid one. There’s not a lot of point in making a fundamental change if you make an incorrect assessment and the new position actually requires you to work longer hours, under pressure, and away from home even more than you are at present. What does your new employer expect of you? For example, do you have to meet a sales or production target, and how do feel about being under considerable pressure to do so? Remember that the private sector is not sentimental about these things and failure to meet KPIs (no matter how unreasonable) can lead to harsh treatment in the short term;
5. Retirement, Death and related benefitsWrite down the retirement, death, disablement, personal insurance and injury compensation benefits available through the new position. Compare these with what you get in the ADF. This comparison might not mean much to you now, but when you’re not healthy or are thinking about retirement, you and your family will need to know about these benefits in considerable detail. Most employers provide the statutory minimum. The ADF offers considerably more.

There are many factors to consider in changing careers. They are both quantitative (money) and qualitative (lifestyle).Every person will measure and assess the relative merits of these factors in different ways, but before you make an ill-informed or ill-considered career decision, do yourself a favour. Objectively and honestly consider the key points in this article; by so doing you might avoid making a decision you’ll live to regret.

During Career Seminars

An increasingly popular service offered by the Council is our program of During Career seminars.

This is a presentation of between one and two hours (at your location anywhere in Australia). Its purpose is to update ADF members on key issues in financial literacy, such as budgeting, debt, risk and investment.

Alternatively, it can be tailored to the needs of your people’s particular requirements or interests.

These programs work best with an audience of at least 40 people. If you’d like to request a During Career presentation, please visit the website and complete the seminar request form.

Understanding Money

Consider these questions:

Why are the people who live in the world’s safest countries are also the world’s most insured? Why do English-speaking people have a peculiar obsession with owning real estate? Why has China turned into America’s banker-the Communist creditor to the Capitalist debtor?

If you’re interested in these important issues, we recommend that you should read a newly published (and non-technical) book by Professor Niall Ferguson titled The Ascent of Money – A Financial History of the World (Penguin Books, 2010). We don’t sell books, but we do recommend this book to anyone who wants to gain a good understanding of the recent financial turmoil, together with an interesting perspective on the past.

Market Volatility

At times, the share market can be volatile and confusing. So how should we react to the ups and downs? The answer for most people. is to do nothing.

That is, unless you’re a day trader, a stock-picking speculator or you just enjoy buying and selling, the daily movements of markets are simply background noise. The key to successful investing for most people is to diversify, minimise debt, don’t be greedy and think about the long run.

Of course, if you’d like a second opinion on your investments and financial affairs, you should consider consulting a licensed financial adviser; however, before you do that, we recommend that you should view the Council’s DVD titled Financial Advisers – The Facts and the Fiction (available on line through our website www.adfconsumer.gov.au.)