Giving to Charity? Don’t Donate Your Data to Fraudsters

In the age of data breaches, self-broadcasting of personal information, and ever more-sophisticated fraudsters, here are four steps you can take to protect yourself.

by TJ Horan

Vice President, Product Management

May 15, 2018

As a drumbeat of data breaches becomes the new reality — 42% of organizations breached in 2017 were breached in the past — it’s easy for consumers to throw up their hands and brace themselves for becoming a victim of identity theft or other financial crime.

However, there’s an obvious step you can take to protect your personal information: Don’t give it away to fraudsters. That sounds like a “brief glimpse of the obvious,” but fraudulent organizations often pose as good ones, tricking consumers.

For example: in the wake of Hurricane Harvey, the IRS issued a warning about fake charities, which had sprung up like mushrooms. The IRS advised:

Criminals often send emails that steer recipients to bogus websites that appear to be affiliated with legitimate charitable causes. These sites frequently mimic the sites of, or use names similar to, legitimate charities, or claim to be affiliated with legitimate charities in order to persuade people to send money or provide personal financial information that can be used to steal identities or financial resources.

The IRS’s warning illustrates the dangers of charity fraud. The big question, then: How can you dodge charity fraud, when there are so many ways for criminals to get ahold of your personal information?

Four Steps to Protect Yourself from Charity Fraud

In the age of data breaches, self-broadcasting of personal information, and ever more-sophisticated fraudsters, here are four steps you can take to protect yourself:

Be diligent and vigilant about who you’re giving your personal information and credentials to. Be very careful before donating to a new charity; to do so, you typically need to create an account. If those details get compromised, you’re a potential victim for account takeover. Make sure you’re not revealing personal information that can be used in this way to a charity that you’re not absolutely sure is legitimate.
Check yourself before you wreck yourself. Keep track of your transactions, which is easier than ever with mobile banking apps that send you notifications and alerts. Get the app that works best for you (from your bank or a third-party app such as Mint), sign up for these features and monitor your transactions on regular basis. If your bank or other card provider offers a card freeze feature, you can use that, too, if you think that your personal information have gotten into the wrong hands.
Donate where you work. Many companies will match employee charitable contributions. By donating through this program, you can avoid putting out your personal information on the internet.
Make the donation through a trusted third party. Many charitable organizations now accept payments via PayPal and other popular payment apps. If you still want to donate directly, you can use a trusted payment app to do so.

Just like practicing “safe software” on your mobile phone, it makes good sense to cultivate your “payment hygiene,” as it will serve you well beyond charity fraud. As the international banking community becomes more open, with standards like PSD2 in Europe and other developments, we will need to be even more vigilant in the future, since more organizations will have the ability to take funds out of your account.

Stay charitable, stay safe and follow me on Twitter @FraudBird.

TJ Horan

TJ Horan is vice president of Product Management at FICO, leading the Solution Product Management team for Lifecycle Products. TJ began his career with DuPont, where he helped design and maintain Expert Systems for process control. Since then, TJ has held a variety of technical and management roles in the fields of analytics, fraud and risk management, and decision management at industry leading companies such as HNC Software and SAS. TJ holds a B.S. in computer science and a M.S. in statistics, both from the University of South Carolina.

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I further broke this down by looking at the characteristics of the youngest 15% in each group, which occurs at age 29 for the 750-799 group and 43 for the 800-850. We used FICO® Score 9 for our analysis, and examined typical variables of the categories that go into the make-up of the score. <a href="http://www.fico.com/en/blogs/wp-content/uploads/2016/10/FICO-Score-High-Achiever-table.png"><img class="alignnone size-full wp-image-29367" src="http://www.fico.com/en/blogs/wp-content/uploads/2016/10/FICO-Score-High-Achiever-table.png" alt="fico-score-high-achiever-table" width="715" height="747" /></a> Since there’s a lot to dissect in this chart, I’ll highlight a few findings that struck me: <ul> <li>Credit history. Higher scores are undoubtedly associated with a longer time on file. What’s striking is the higher average time on file for the 800+ group, both overall and for revolving accounts (the most common trade line). Clearly, it helps to start credit use early in life – but that’s not the sole determining factor for high scoring. The younger cohorts in both the 800+ and 750-799 groups have time on file medians significantly less than their older counterparts.</li> <li>New credit. High credit scorers do, in fact, pursue new credit. We see little variation in months since last trade line opening and last inquiry among all groups observed.</li> <li>Pay on time. As you might expect, the further in the past the delinquency, the higher the score – and that’s if a delinquency ever happened. 95% of the 800+ people and 72% of the 750-799 group have never been delinquent, which is a striking contrast to the 57% for the total population. The percentages for the younger groups are even higher, especially so for the 750-799ers. Collection items are also scarce for these high scorers. 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The 800+ group is roughly 1/4 of the national median, both in total and on their highest utilized card; they also have lower balances and more cards. The 750-799 group is more active and higher utilized, but still only at 2/3 of the national figures. The young 750-799 group compensate with lower revolving balances and, as a result, lower utilization, which is in line with what we see for the 800+ group.</li> <li>Benchmarks. I’d like to point out that while this study provides good benchmarks of the typical credit traits of the FICO® Score high achiever, individual credit profiles will vary widely. And keep in mind that when we sort groups of consumers as a whole by different behaviours, some results may look superficially odd. For example, the 800+ band has a longer median average open account time (128 months) than average revolving months on file (140 months).</li> </ul> So, what do we conclude? A huge takeaway is that high scorers don’t have too much in the way of serious delinquencies and negative public record data. In most respects, the young 800+ people are like their peer group. They really only differ markedly in their shorter credit history and higher non-mortgage balance, both of which are a function of life stage. Our results show that you don’t have to be a credit product hermit; these high scorers have more credit cards. The takeaway is to start credit activity early and maintain well-managed and moderate usage. In many ways, the young 750-799 people are more interesting because their age profile is much younger. Their credit characteristics differ more from their peer group, particularly in terms of length of credit history. They compensate by having almost pristine credit records and lower balances. Ultimately, 39% of US consumers are FICO® Score high achievers, which they accomplish by following common-sense credit practices. It ain’t rocket science!

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