While my focus is on writing articles to help you improve your real estate business, sometimes things come to my attention that are so important that I feel I have to tell you about them. With this in mind a friend of mine who's in real estate told me a story of how he recently became a victim of identity theft, and I thought I'd pass along the story to you in case it may help you in protecting yourself.

He noticed something peculiar happening with his checking statements from his bank. There were checks clearing on his account that he had never written, and when he looked at the checks themselves he was absolutely stunned at what was on them.

Someone had gotten a hold of his checking account number, and had printed their own checks with his account number on them. But what was really shocking was the fact that the person who printed and cashed the checks printed their own name on them, not my friend's name. And of course my friend's bank just continued cashing these checks, never noticing that the name on the checks themselves didn't match the name on the account.

I remember sometime ago my own bank told me they always check and match the signatures on any checks I write before they ever release the money to the payee. But after hearing about this problem my friend had with his bank, I now have serious doubts that my bank is really doing this for me.

We're all targets for identity theft these days. About five months ago someone got a hold of my credit card number and bought about $3,800.00 worth of products before I became aware of the problem and closed out the credit card account. But at least I was protected in that situation against any unauthorized charges by my credit card company.

This brings me to another subject that I have great concern with these days when it comes to identity theft ... using debit cards and making electronic payments to people directly from one's checking account. While I'm a huge fan of using technology, these two approaches have always seemed like risky ideas to me. To illustrate why, here's another real-life story:

Steve Lopez is a journalist for The Los Angeles Times, and several days ago he wrote a story describing how he had been the victim of identity theft. Four individual withdrawals totaling $2,000.00 had been made from his checking account from four different ATM machines. When he told his bank about this, they immediately credited him back the $2,000.00, but they later changed their minds and removed the money from his account again. They told him the reason for this was that the money had been legitimately taken out of his account with an ATM card, and because of this he wasn't entitled to have the money credited back into his account.

Steve did his own investigations with experts on the subject, and found that identity thieves are finding newer and more creative ways to get your ATM and debit card information. Sometimes they can be working in conjunction with people who have access to your ATM card number and the magnetic information from the card, and sometimes they can be near you at a gas station, appearing to be facing away from you talking on a cell phone, but the camera on their cell phone is recording you punching in your pin number into the payment machine.

When Steve went to the Los Angeles Police to report the money that was stolen from his checking account, the officer he made the report and told him to stop using his debit card. The officer told him that with credit cards the law makes incidents like these the responsibilities of the credit card companies themselves, but that the law with debit cards is not the same. Steve was also told that once people have your debit card information, creating a duplicate of your debit card can be done relatively easily with just a personal computer and some additional equipment.

So in reality, you may be safer using credit cards and not giving anyone other than your bank the ability to claim money out of your checking account. While using debit cards may make sound financial sense from the perspective of spending only what you have, it's simply too easy nowadays for people with less than good intentions to sell, utilize, and collaborate with others to remove money directly from people's checking accounts.

I'd rather have my money still in the bank and be able to question any and all charges on my credit card statement before I ever have to pay them.

Published: February 15, 2006

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Jim Gillespie, Ph.D., is America's Premier Real Estate Coach℠. He has over 20 years of experience in real estate sales and is a past president of three different real estate companies. His FREE real estate E-newsletter with tips and creative ideas to help agents make more money is now read by over 35,000 agents nationwide. You can subscribe to his FREE E-newsletter by visiting RealEstateSalesCoach.com or contact him at Jim@RealEstateSalesCoach.com.