Fraud and identity theft have taken top honors the past few years when it comes to types of complaints submitted to the Federal Trade Commission. In 2012, fraud and identity theft accounted for 70 percent of total complaints, according to the Consumer Sentinel Network, an online database of consumer complaints. With more people shopping around the holidays, it's the perfect time for thieves to take advantage of distractions.
This holiday season, take the following precautions to make sure you don't become a victim.
1. Keep a watchful eye on your credit.
There are some smart ways to stay on top of your credit during the holiday rush (and all yearlong):
2. Shop securely online and in store.
Online: Cyber Monday is a great day to get online deals on holiday gifts, but make sure the sites you're shopping on are secure. Before you check out online, check that the site is verified by TRUSTe or a similar trusted data management service. You can look for the TRUSTe privacy seal at the bottom of a secure webpage. It's also a good idea to make sure that the URL begins with https://. These precautions ensure that only you and the online retailer have access to the data that's transferred across the connection.
Avoid shopping or browsing your online banking and credit card accounts on a public Wi-Fi connection. It's impossible to tell who has access to any data you transfer over an unsecure connection, so better to be safe than sorry.
In store: If you're out and about in the hustle and bustle of Black Friday, make sure to keep a close watch on your personal items. Don't lose track of your wallet because you were sidetracked by a good deal.
When making purchases, consider using your credit card over debit or cash. Credit cards have simpler processes for disputing fraudulent charges and limit your liability. As an added bonus, many credit card issuers offer extended warranties and purchase protection, both of which can come in handy during the holidays.
3. Review your transactions.
Once you're home from shopping and on your secure, private Internet connection, log on to your credit card accounts to review your transactions. Make sure everything is as expected and there aren't any suspicious charges. You can also use websites such as Credit Karma, Mint or Manilla to track your transactions from multiple accounts all in one place.
If you see a credit card transaction that isn't yours, contact your card issuer immediately – most cards allow you to put a hold or freeze on the account to prevent further charges while you investigate what happened.
4. Check your credit reports. (They're free!)
Finally, one of the best ways to make sure your credit is unharmed is just to be aware of what's on it. You have a right to a free copy of your credit report from each of the three bureaus once during a 12-month period. Starting with the New Year, check one report (or all three, if it's your first time). Then, spread the other two reports over the remainder of the year so that you get a free report once every four months.
The bottom line: Your credit is important and can make or break your financial future. Even if you don't plan on applying for a mortgage or a credit card any time soon, your credit is worth protecting.
Bethy Hardeman writes about personal finance, credit and the economy for CreditKarma.com, a free credit monitoring website that helps more than 20 million people access their credit score for free.