Long gone are the days when identity theft was confined to a poorly crafted email from a Nigerian prince offering you riches. Today, your sensitive information is at risk every time you swipe your credit card, access public Wi-Fi, file a tax return, or entrust your data to a third party. There is no perfect defense against identity theft, but like getting a flu shot or buckling your seat belt, you can still reduce your exposure by being proactive.
Javelin Strategy & Research reports that approximately 13 million people a year are victims of identity theft. Fortunately, there are many protective tools and strategies available to consumers. Below are a number of proven methods to protect you from fraud.
- Strengthen your password anywhere data are stored (phones, tablets, PCs, etc.) and take advantage of two-factor authentication whenever possible. An example of two-factor authentication is a log-in process that requires you to enter: 1) your alpha-numeric-symbolic password, plus 2) a unique code that is texted to your phone.
- Monitor bank account and credit card activity continually, as early detection is critical. Opt-in to any alerts they provide as a heads up that something may be afoul.
- Shred any sensitive documents rather than discard them in the trash. When you get tired of shredding, convert eligible sensitive correspondence to paperless notification.
- Install security software on your electronic devices.
- Be particularly sensitive to what you access while on public Wi-Fi.
- Scrutinize anyone requesting personal information.
- Review credit reports from each of the three credit bureaus. A free report is available from each bureau annually, so request one from a different bureau every four months at www.annualcreditreport.com.
- If available, request and use a smart credit card, as the security chip is more difficult to counterfeit and the use of the card requires a unique PIN.
- Utilize a credit monitoring service. These are generally designed to promptly alert the consumer when someone attempts to use their personal information in a suspicious manner. This includes misuse of your name, Social Security number, address, date of birth, etc. For a nominal cost, these organizations provide near real-time detection and a dedicated response team. Each service is distinctive, but LifeLock® (https://secure.lifelock.com/enrollment) and Identity Guard® (http://www.identityguard.com/compare-plans/) are leading providers.
- Consider opting out of unsolicited credit card and insurance offers at www.optoutprescreen.com.
- Have a cybersecurity audit. Depending on your carrier, some high-end insurance companies have services that can conduct a security assessment of your home network and computing devices. Certain services include an analysis of your social footprint to determine what personal information exists online – an area in which children can be particularly vulnerable.
- Consider restricting your credit profile with the credit bureaus. The two types of restrictions are a fraud alert and a credit freeze (aka security freeze). These restrictions are the best defense against a fraudulent account or credit line being opened in your name. Understand that each defense comes with some inconvenience when trying to establish future accounts or obtain credit. Alerts and freezes should absolutely be deployed if someone’s data has already been compromised.
Unfortunately, you can exceptionally enhance your safeguards and still be victimized by unforeseen attacks. Knowing how to respond, in the event of a breach, is extremely important. The Federal Trade Commission has a comprehensive guide entitled “Taking Charge: What to Do if Your Identity Is Stolen” (https://www.consumer.ftc.gov/articles/pdf-0009-taking-charge.pdf). It provides detailed advice and information on actions you can take based on the type of fraud that occurred.
Credit Bureau Contact Information
Frank Fairbanks, CFP®, CPA, is a Director of Financial Planning at RGT Wealth Advisors in Dallas, Texas. You can reach him at firstname.lastname@example.org.