Identity theft can cause loss of financial assets, ruin your credit and be a significant drain on your time and resources. Therefore, preventing it should be a priority.
Every day you use your personal information and data to carry out a variety of tasks, including accessing email, social media accounts, bank and credit card accounts, and other password-protected accounts. Unfortunately, even though this data is generally encrypted, that does not ensure it is immune to the threat. Sadly, your personal information, and as a result, your identity, can be appropriated and used by bad actors for their financial gain.
Unfortunately, identity theft is a growing problem in the U.S as identity thieves increasingly use computer technology to obtain other people’s personal information for identity fraud.
All is not lost. You can take actions to help reduce the chances you will be a target, recognize warning signs, and take immediate action to lessen harm.
Identity theft occurs when someone uses your sensitive personal data to pretend to be you or take it from you.
The U.S. Government defines identity theft as “when someone steals your personal information to commit fraud.”
Personal information and data may include, but is not necessarily limited to, your Social Security number, bank account number, and credit card information. Identity thieves, in turn, may use this information to drain your bank and investment accounts, open new lines of credit, get utility services, steal your income tax refund, or use your insurance information to get medical treatments.
Because data breaches have become a more regular occurrence, your sensitive information may already be exposed. This reality makes it critical to take steps to deter bad actors from using your personal data and wrecking your financial life.
It is unlikely that you will find a foolproof way to thwart identity theft entirely, and right now, a monitoring service can only let you know if something goes wrong. So instead, consider the following best practices that will help you prevent the theft of your identity:
If you were to freeze your credit with all three major credit bureaus – Equifax, Experian, and TransUnion – it restricts access to your data so new credit files cannot be opened in your name. There is no cost to freeze your credit and unfreeze it when you want to open a new account or purchase a home or vehicle. This action provides the utmost protection against identity theft using your information to open a new account.
This is the data identity that is most useful to thieves when cloning your identity. You can reduce the risk of having your social security number stolen by not carrying it with you, avoiding listing it on applications unless absolutely necessary, and not providing it over the telephone to any institution you do not already have a preexisting relationship
Stolen mail is one of the easiest paths to a stolen identity. For instance, malicious actors can take bank, investment, or credit card statements, utility bills, health care bills, tax forms, or preapproved credit card offers out of your mailbox. Thieves can also reroute your mail by completing a change of address request in your name so keep up with expected mail that doesn’t come. In addition, you may want to put your mail service on hold if you are away.
It is crucial to regularly review your bank and credit card statements. Unfortunately, someone who has your credit card number or bank account information can easily make small charges to test if they get caught. In many cases, these small transactions can smoothly slide through the cracks without you or the financial institution picking upon them. A routine review may help you detect fraud early and stop it before it happens. Research has shown that individuals who closely monitor their accounts encounter lower losses.
Believe it or not, there are still bad actors that will go dumpster diving to steal someone’s personal information. Bank, credit card, or investment statements can be fished out of the garbage and used. Don’t forget about junk mail, especially the preapproved offers of credit.
Most of us have received a phone call or email from a scammer. They pretend to be someone you know who needs help or a government entity or business appearing to be legitimate but actually trying to steal your information. To be safe, you can initiate a callback or return email, working from a known entity such as the official website or customer service line, rather than responding directly to the call or email. Also, be cautious of attachments as they can contain malware.
A secure password needs to be unique, complex, and lengthy. It is important to create different passwords for all of your accounts. Try not to repeat them. You will also want to refrain from using information related to your identity, like your birthday, your initials, part of your name, or the last four digits of your Social Security number. In addition, adding an authenticator app can reduce your risk.
Many financial institutions will text or email you when transactions are made on your account. Monitoring your account on the internet and setting up email alerts are two easy ways to stay connected to your accounts and any strange activity.
Studies have shown that 10% of all theft occurs through the mail or trash. Elect to receive your statements electronically whenever possible. Also, use online bill pay to help remove financial-related information from your personal correspondence.
Requesting your credit reports from Equifax, Experian, and TransUnion is free and can be done annually. You can quickly request your credit report online, and obtaining them will not lower your credit score. In addition, the bureaus offer tools to help monitor your credit, such as alerts to notify you of key changes. You can also request free annual credit reports at AnnualCreditReport.com.
Do not discard credit card offers; shred them. Whenever possible, remove your name from call lists. This can be done online at the national and state levels, as well as by calling or contacting an institution directly.
Not surprisingly, mobile devices can be an easy target. According to recent data, only 48% of individuals lock their mobile devices routinely. Therefore, password protection is critical on your electronic devices.
Read through each “explanation of benefits” statement to ensure you recognize the services provided. You may want to call to investigate if you do not receive an expected bill.
These are only a few ways criminals can gain access to your sensitive personal data.
When your wallet is lost or taken, a bad actor can obtain access to the information you have in it. Experts encourage you not to carry your Social Security card or more credit cards than necessary.
If you are using public Wi-Fi, hackers may be able to see what you are doing. Best practices include not using open Wi-Fi for banking, shopping, and other sensitive or financial transitions.
Almost everyone has already been affected by a data breach. It is relatively safe to assume that some of your personal information may be out there and take precautions. Check your credit report and review your financial and insurance statements for unexpected activity.
Some criminals may attempt to have you share personal information, like account or credit card numbers, banking information, and Social Security numbers, when they send you an official-looking email. Similarly, spoofing is much of the same thing with caller ID, so that the number looks to be that of a trusted company or government agency. Never give out personal information in response to a call or email. Instead, contact the company/person through a trusted source to determine if the call is legitimate.
Obtaining credit card information often through using a small device is considered skimming. Make sure you use cards with chips for adding protection. In addition, skimming devices are more likely to be placed at unmonitored payment sites, so beware of using these.
Those with malintent can determine your password by observing your fingers as you type in the key. The information from your credit card can then be photographed while you shop online in a public place. Try to be mindful of your surroundings, do not leave your card when it can be seen, and cover the keypad when entering your code.
Malware can be installed on your computer if you open an infected email attachment or visit a bad website. Use caution when clicking on attachments or links in emails and about the websites you visit.
Reach out to the Federal Trade Commission (FTC) online at IdentityTheft.gov or by phone at 1-877-438-4338. IdentityTheft.gov website is the federal government’s one-stop resource for victims of identity theft. In addition, the FTC can help you create a personal recovery plan.
In addition, you may want to file a police report for identity theft if you know that someone committed a crime. Some businesses, like financial institutions and credit card companies, may require you to file a police report if you claim identity theft and ask them to investigate the case, remove the fraudulent activity from your account, or cover the cost of lost funds.
In this day and age, it should come as no surprise that you probably use your personal data to perform numerous tasks every single day, including logging into your email, social media sites, bank and credit card accounts, and other password-protected accounts. Even with this data being encrypted, that doesn’t mean it is entirely safe. Take a moment and think about how you can use some of the ideas in the article to better protect your personal data and what you need to do if it is put in jeopardy.
If your personal information is stolen or compromised, make sure to contact your financial institutions, accountant, attorney, and financial advisor. At Spaugh Dameron Tenny, our team of financial planners is always here to support you.
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