One of our clients recently had the unfortunate experience of having their identity stolen. It has been a nightmare for them to try and “unring the bell” on this experience. As well, years ago when I was naïve to this kind of thing, an employee fraudulently opened four credit cards in my name without my knowledge and forged my signature. She picked up the mail every day at the office and hid the bills and late notices from coming to me. It was only after someone else picked up the mail in her absence that this began to come to light. Yikes!
I have since come to learn that identity theft can have repercussions that last for years – and, unfortunately – identity theft is on the rise! A 2020 Identity Fraud Study by Javelin Strategy & Research found $16.9 billion in losses from identity theft in 2019, an increase of 13% from 2018. The study noted that more than 5% of people were victims of identity theft last year. Due to the COVID-19 situation, even more fraudsters are at work trying to obtain money by identity theft. Losses due to identity theft in 2020 are expected to total more than 2019 . . . and it appears that it will be significantly more!
So, to avoid becoming an identity theft statistic this year like our client, or in the future, what can you do?
Here is our “Top 10 Ways To Prevent Identity Theft.”
1. Keep Your Social Security Number Safe
In order to prevent identity theft, don’t carry your Social Security card in your wallet or purse; keep it in a secure location. Only give out your Social Security number when absolutely necessary. Just because a doctor’s office or pharmacy wants your Social Security number, does not mean that you have to give it to them – or at least not without asking how it will be used, and how it will be stored. Securely maintain or shred any paperwork which contains your Social Security number.
2. Secure all Paperwork with Personal Information
If you have people working at your home, lock away bank and financial statements, credit card statements, tax returns, and other paperwork with personal information, including your Medicare Number if age 65 or older or are disabled. Do not simply throw out paperwork with personal information; instead, shred all sensitive materials like insurance forms, medical bills or statements, charge receipts, store and bank receipts, etc. Don’t deposit outgoing mail in an unsecured bin or mailbox if there is confidential information or checks in your outgoing mail; instead, deposit outgoing mail at the Post Office or in a Post Office collection box.
3. Order Your Free Credit Reports Each Year
Each year you are entitled to a free credit report from the three main credit reporting agencies: Equifax, Experian, and TransUnion. You can order all three reports at once, or if you want to keep an even closer eye on your credit report to make sure all the information is correct, stagger the ordering of a credit report every four months. Due to the COVID-19 situation, all three credit reporting agencies are offering free weekly online reports through April 2021. You can order your free annual credit reports by phone at (877) 322-8228, or online at www.annualcreditreport.com.
4. Place a Fraud Alert on Your Credit Report
A great way to prevent identity theft is to place a fraud alert on your credit report to make it harder for fraudsters to open more accounts in your name. Businesses will need to reach out to you to confirm your identity before processing a new account application. There is no charge to establish a fraud alert and it lasts one year. You only need to contact one of the three credit reporting agencies and they will inform the other two companies of the fraud alert.
5. Put a Security Freeze on Your Credit Report
Several years ago, my wife and I put a “security freeze” on our accounts. This is even more restrictive than the fraud alert option. With a security freeze, creditors cannot review your credit report without obtaining a certain password from you. I highly recommend doing this and contacting all three credit reporting agencies to put a security freeze on each of your credit reports. A security freeze is free to implement and will remain in place until you temporarily lift it, such as when buying or refinancing your home, or when you permanently remove it.
6. Just Say “No” to Pre-Approved Credit Offers
Say goodbye to the pre-approved credit card offers and other financial offers that fill your mailbox on a routine basis. These pre-approved offers are a target of identity thieves who steal mail and open new accounts with the business soliciting the offers. You can remove your name from the credit bureau marketing lists by calling (888) 567-8688, or online at www.optoutprescreen.com. Five years is the usual amount of time to opt out but there is also a permanent opt out option, too, if you complete and mail a certain form.
7. Protect Your Phone and Computer
Use strong and unique passwords (don’t choose “password”, “qwerty”, your pet’s name, or something similar) to gain access to your cellphone and computer. Update software when updates become available. Use virus protection software which is updated regularly. Firewalls should be used for computers. Be aware that when using public Wi-Fi others may see your data. If you are a “road warrior” (remember when this was a “thing” – pre-virus?), consider a “Virtual Private Network” or other secure log in for your phone and computer rather than using the Wi-Fi of your hotel or coffee shop. Be cautious of clicking on attachments or links in emails since they may contain malware. Do not respond to any phone calls or emails to verify your account or password since these are usually “phishing” scams pretending to be a bank, store or government agency. (I received a text just today supposedly from Amazon saying my account had been frozen and to click the link on my phone to set up a new password. It was, of course, bogus!)
8. Use Strong Passwords & Add an Authentication Step to Online Accounts
Use strong and unique passwords for all your online account access. Some security experts advise having passwords with 12 characters or longer and include numbers, letters, and special characters.
Consider using a password manager to create and store your passwords. The Better Business Bureau recommends changing passwords every 30 days. For some, that is not possible, but at least quarterly. This is important because data breaches in companies storing our data are often not discovered or reported right away. (In 2013 Yahoo was breached and it took three years before they reported the hack of customer data.) Also, opt in for an authentication step if this option is available. The authentication step could be a phone call or a text to your cell phone before allowing further access into private data.
9. Set up Alerts
Set up alerts with all financial institutions you have accounts with that offer this service. The alerts may be sent via text or email and can inform you when there are charges or withdrawals from bank accounts, credit cards and investment accounts.
10. Use a Digital Wallet
For those who are tech savvy, you can use a “digital wallet” to pay for online and in-store purchases. A digital wallet is an app which contains secure, digital versions of credit and debit cards. Transactions are tokenized and encrypted, which makes them safer than actually using the card. Another benefit during the pandemic we are currently dealing with is there is no need to place your hand or fingers on a credit card machine—a digital wallet is a contactless transaction and has fewer risks of contracting COVID-19.
In Conclusion: You CAN Avoid Being a Victim of Identity Theft
So, there you have it, our “Top 10 Ways To Prevent Identity Theft.” By implementing the strategies above, you can keep yourself from becoming another victim of identity theft. Being the only one who gets to spend your own money . . . “Imagine That™!”
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Written by R. J. Kelly – June 2020
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