AdviceIQ

Are You Safe From ID Theft?

Among experiences you sure don’t want, you open your credit card bill and find a long column of strange charges. Or you try to file your federal tax return and the Internal Revenue Service responds that you already filed and supposedly received your refund weeks ago. How can you protect your identity from falling into the wrong hands?

ID theft involves obtaining someone’s personal or financial information – without authorization – to commit fraud or other offenses, from everyday transactions to taking out loans. According to Javelin Strategy & Research, ID thieves stole more than $16 billion from 12.7 million American consumers in 2014.

Anyone with a Social Security number (SSN) can become a victim; the crime continues to top the Federal Trade Commission’s consumer complaints. A data breach precedes many cases, where unauthorized or illegal access of data opens the door to stealing and using that data (for example, your card number at a retail store such as Target or your policy details at an insurer such an Anthem). The Identity Theft Resource Center (ITRC) reports that some 540 occurred this year through early September.

The news isn’t all bad: The ITRC also reported that exposure of SSNs and information about credit and debit cards declined over the past five years.

No matter the increased security to help mitigate this crime, ID theft remains a big threat to you because of the potentially disastrous financial harm. Here are a few steps you can take:

Secure your personal information. Never carry essential documents, such as your Social Security card, birth certificate or passport, with you. Store such information in a safe place at home. Avoid carrying more credit cards than you actually need, in case your wallet is lost or stolen.

Shred receipts, bank statements, credit offers and expired cards to prevent dumpster divers from getting your personal information.

Strengthen your digital security. Do not respond to unsolicited emails requesting personal information. These messages may lead to your information falling into the wrong hands. Contact the company in question if the request seems suspicious.

Create complex passwords and avoid such easily guessed information as birthdays and phone numbers. Create a unique password for each of your accounts.

Install (and regularly update) protective firewalls and antivirus software on your home computer.

Make purchases online cautiously. Make sure the vendor’s website is legitimate; review its privacy policy to understand how your information might be used. Refrain from submitting your credit card or financial information until you check the site for third-party security symbols that verify the site is safe.

Use secure payment methods when possible. If you need to send documents that include your account number, SSN or other identification, password-protect the document or send it via a secure portal.

Beware of phishing scams designed to collect your online information, such as email promoting false lottery wins, money requests from unverified charities and information updates from businesses claiming to be banks. Avoid clicking on any suspicious links in the email as well.

Use available credit resources. Consider placing a fraud alert on your credit file to instruct prospective creditors to keep identity thieves from opening new credit accounts in your name. Request a free credit report from each of the three major credit agencies (TransUnion, Equifax and Experian).

Place a security freeze on your credit report, which prevents credit agencies from releasing your information without your consent. Keep in mind that this can also delay or interfere with the approval of your outstanding loan applications.

Visit USA.gov for additional steps to keep your ID safe.

Even after you safeguard your information, prepare for the worst case. Our next article looks at recovering from ID theft.

Follow AdviceIQ on Twitter at @adviceiq.

Sheila Handrick, CFP, CRPC, is a consultant with Wipfli Hewins Investment Advisors LLC in Madison, Wis.
 
Hewins Financial Advisors, LLC d/b/a Wipfli Hewins Investment Advisors, LLC (“Hewins”) is an investment advisor registered with the Securities and Exchange Commission under the Investment Advisers Act of 1940. Hewins is a proud affiliate of Wipfli, LLP. Information pertaining to Hewins’ advisory operations, services, and fees is set forth in Hewins’ current ADV Part 2A, copies of which are available upon request or at www.adviserinfo.sec.gov. The views expressed by the author are the author’s alone and do not necessarily represent the views of Hewins or its affiliates. The information contained in any third-party resource cited herein is not owned or controlled by Hewins, and Hewins does not guarantee the accuracy or reliability of any information that may be found in such resources. Links to any third-party resource are provided as a courtesy for reference only and are not intended to be, and do not act as, an endorsement by Hewins of the third party or any of its content or use of its content. The standard information provided in this blog is for general purposes only and should not be construed as, or used as a substitute for, financial, investment, or other professional advice. If you have questions regarding your financial situation, you should consult your financial planner, investment advisor, attorney or other professional.

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