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How a stolen cellphone could trash your credit

As if being without a phone weren't bad enough, you can also be vulnerable to identity theft and a black mark on your credit reports. But there are ways to reduce your risk.

By Credit.com Aug 21, 2013 12:41PM

This post comes from Jeanne Kelly at partner site Credit.com.


Credit.com logoYou've enjoyed a great day out -- shopping, grabbing a coffee with friends, maybe a quick stop at the park to walk the dog.

Woman sitting on steps with smartphone © Image Source, Image Source, Getty ImagesBut then, as you walk into the house, you have a sudden panicked feeling . . . Where is your cellphone?

According to a recent study by Lookout Labs, $30 billion worth of cellphones and mobile devices were lost in 2011. That's a lot of hardware that ends up somewhere, possibly in the wrong hands.

Life gets complicated when you lose your phone or if it's stolen: All of your contacts, your calendar appointments and many of your photos may be stored on that device. It's a central hub of communication and entertainment in your life.

It's also a central hub of finance in your life and if your phone was stolen, the thief could do a lot of harm to your credit score.

Here are just a few ways your phone can put your credit at risk:
  • Your phone contains a lot of identification information that can be used to impersonate you. That information can be used to then open new accounts in your name.
  • If you've ever shared your financial information (such as a credit card number) with a friend via email or text, it may be available in the communication history or sent folder.
  • Your phone may contain shopping apps that hold your credit card information on file so you can shop quickly and conveniently again.
  • Your phone may contain banking apps that allow you to quickly access your bank account to get account balances or to pay bills.
While all of this is convenient, it's also a lot of information about you that could potentially destroy your credit if someone got hold of it.

What you can do
  • Avoid including this information on your cellphone in the first place. Don’t do your banking on your cellphone; don't do your shopping on your cellphone. This can be difficult and sometimes even nearly impossible due to the mobile age we live in, but it is the simplest solution to keeping your identity safe.
  • Don't store financial information on your phone. Adjust the security settings so that you have to re-enter your credit card every time you want to make a purchase. (Not all apps allow you to do this but take advantage of them if they have that option!)
  • Download an app that allows you to locate your lost phone. And, if necessary, try to get an app that can "wipe" your phone remotely so that others can't access your information.
  • Put a password on your phone. A good one.
  • Monitor your credit. If you lose your phone, but aren’t sure if it was stolen or just misplaced, you can monitor your credit using the Credit Report Card. It will let you know if your credit score drops significantly, a signal that you may be an identity theft victim. Also, keep an eye on any financial accounts you had hooked up to your phone.     You can also contact the three major credit reporting bureaus to put a 90-day fraud alert on your credit, which may help you spot fraud before it happens.
  • Keep the contact information of your credit cards and banks handy. This way you can contact them and tell them to temporarily disable access to your account if your phone is missing.
These aren't foolproof methods of security, but together they provide a pretty good layer of protection in the event that your phone goes missing.

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1Comment
Aug 22, 2013 10:11AM
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If people actually knew what their cell phones are capable of, most would quickly smash them with a hammer. I got rid of mine years ago do to expense, and after reading some horror stories about privacy issues, I'll never own another. There are "experts" out there that also claim that your cell can be accessed remotely, whether it's on or off, and I know quite a few people who now remove the battery when the phone is not in use. I'm certainly not paranoid, but in todays world of hi-tech, data collection, and snooping, is it unrealistic to think that someone could be listening to your conversations throughout the day, even when you were not on the phone ??  I know have Magic Jack as a home phone, and that's it ... it's cheap, and if my life is so hectic that I need to talk on a cell phone while driving or shopping, then I need to re-evaluate my priorities. I'm not telling you to get rid of your blessed phone, but merely saying that maybe you should think about its use a bit more.
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