WASHINGTON — A recent U.S. Department of the Treasury Financial Management Survey finds that although identity theft continues to top consumers' list of concerns, many still leave themselves open to it by using paper checks rather than direct deposit.
A recent U.S. Senate resolution has declared March 2007 Go Direct Month, to raise awareness about the safety advantages of direct deposit, particularly for older and vulnerable Americans.
"Millions of Americans are affected by identity theft and other financial crimes, but there are steps people can take to increase their financial safety–such as choosing direct deposit," said Treasury Financial Management Service Commissioner Kenneth R. Papaj. "Last year 57,000 checks issued by Treasury were fraudulently endorsed, while problems with direct deposit payments were negligible. In fact, while paper checks make up about 20% of the total Social Security and Supplemental Security Income payments, they account for more than 90% of reported payment problems."
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The survey revealed that 31% of respondents said they had a check, important document or large sum of cash lost or stolen. Of this group, nearly one in five said a family member or member of the household had stolen the cash, check, or document.
In addition, 40% of survey respondents expressed concern about having a paper check or other important document lost or stolen. Women are more likely to be worried about financial crimes, with 46% saying it is likely they will have a paper check lost or stolen, compared to just 35% of men.
The poll also showed that compared to Americans who use direct deposit for regular payments, those who use paper checks or other methods are significantly more likely to take unnecessary risks with their money.
For example, they were twice as likely to carry around large amounts of money compared to people who use direct deposit. In addition, 30% of those using checks and other methods say they are more likely to keep their money somewhere other than a bank account, compared to 22% of direct deposit users.
The Treasury-sponsored survey revealed that there are still misconceptions about the safety and security of direct deposit. Forty percent of respondents say paper checks are better than direct deposit at preventing theft or loss of payments such as wages or retirement benefits. Some 20% say paper checks offer superior protection from identity theft or fraud. In fact, the opposite is true, with direct deposit providing substantial safety benefits over paper checks.
Go Direct Month and the Treasury-sponsored survey on financial security are part of a yearlong "Countdown to Retirement" pledge drive designed to encourage baby boomers to choose direct deposit once they start collecting Social Security benefits. The focus of the campaign is to encourage people to switch to direct deposit by educating them about the safety, security, and convenience benefits of direct deposit.
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