Protecting Yourself from Identity Theft
Identity theft is a growing concern, but there are several strategies you can employ to protect your personal information and minimize the risks. While no method guarantees complete immunity, these precautions can significantly reduce your vulnerability.
Freeze Your Credit
One of the most effective actions is to freeze your credit with all three major credit bureaus: Equifax, Experian, and TransUnion. This restricts access to your credit reports, preventing criminals from opening new accounts in your name. Activating a credit freeze is free and easily reversed when you need to open a new line of credit.
Secure Your Social Security Number
Your Social Security number is a critical piece of your personal information. Treat it with the utmost care. When asked for your number, always inquire why it’s needed and how it will be protected. Avoid carrying your Social Security card and securely store or shred documents containing your number.
Be Alert to Phishing and Spoofing
Scammers frequently use sophisticated tactics like phishing and spoofing to steal your information. They may impersonate government agencies or businesses via phone or email. Exercise caution, and always initiate contact yourself using a known, official website or phone number rather than responding to unsolicited communications. Also, be wary of attachments, which may contain dangerous malware.
Use Strong Passwords and Enable Two-Factor Authentication
Utilize a password manager to create and store unique, complex passwords for your online accounts. Avoid reusing passwords, as this makes it easier for attackers to gain access to multiple accounts if one is compromised. Adding a two-factor authentication step offers an extra layer of security that can significantly reduce your risk.
Be warned: Security questions are easily compromised. Scammers can frequently find answers to these questions through social media. Be careful what you disclose online and think carefully about security answers.
Set Up Alerts
Most financial institutions offer alerts via text or email when activity occurs on your accounts. Sign up for these alerts to monitor your credit and debit card usage, as well as withdrawals or deposits to your accounts. This allows you to identify and respond rapidly to any fraudulent activity.
Monitor Your Mail
Stolen mail is a common pathway for identity theft. Have your mail held when you’re out of town. Consider using a U.S. Postal Service-approved lockable mailbox. Alternatively, sign up for USPS Informed Delivery to receive a preview of your mail, enabling you to identify missing items.
Shred Sensitive Documents
Shred any financial statements a potential thief could access. Dispose of junk mail, especially preapproved credit offers, by shredding them.
Utilize a Digital Wallet
When making online or in-store payments, consider using a digital wallet. These apps securely store digital versions of your credit and debit cards on your smartphone. They use unique encryption and tokenization to protect your data.
Secure Your Mobile Devices
Always use strong passwords on your electronic devices. Consider using a banking app over a mobile browser.
Regularly Check Your Credit Reports
The three major credit reporting bureaus provide consumers with free credit reports weekly via AnnualCreditReport.com. Review these reports frequently to ensure accuracy and identify any signs of fraud, such as unrecognized accounts. You can also sign up for free credit reports and scores from NerdWallet to receive alerts if there are any changes to your credit profile.
Review Financial and Medical Statements
Carefully review your financial statements, confirming the legitimacy of every transaction. Know your payment due dates, and immediately investigate any bills you did not receive. Also, study your “explanation of benefits” statements for healthcare services to detect and prevent any healthcare fraud.
Types of Identity Theft and Warning Signs
Criminals use various methods to exploit your personal information. Here are some of the most common types of identity theft and their warning signs:
-
Credit Identity Theft: This occurs when criminals use your personal information, such as your Social Security number, to open new credit lines.
- Warning Signs: Unexpected changes in credit scores, unfamiliar accounts on your credit reports, debt collection notices, or court judgments you don’t recognize. Freezing your credit is the best preventative measure.
-
Child Identity Theft: This involves criminals stealing a child’s identity and applying for credit in their name. This is often discovered when the child applies for student loans or credit.
- Warning Signs: Receiving credit card offers for the child or calls about late payments or debt collection. You can freeze your child’s credit to prevent this.
-
Synthetic Identity Theft: This is a more sophisticated form of identity theft in which criminals create a fictitious consumer identity using a combination of real and fabricated information, typically including a Social Security number, often of a minor child, combined with a name and address. They then use this synthetic identity to apply for credit and loans.
- Warning Signs: Discovering that your child’s Social Security number is already in use, which can be identified when freezing their credit.
-
Taxpayer Identity Theft: Occurs when fraudsters use your Social Security number to file a fraudulent tax return in order to steal your tax refund or tax credit.
- Warning Signs: Inability to e-file your taxes because someone else has already filed under your Social Security number, receiving an IRS notice referencing unfamiliar activity, or IRS records showing that you worked for an employer you don’t know.
-
Medical Identity Theft: This involves using someone else’s identity to obtain healthcare services, which can lead to inaccurate medical records.
- Warning Signs: Unexpected claims or payments on your insurance explanation of benefits that you do not recognize.
-
Account Takeover: Criminals use personal data to access your existing financial accounts and then change passwords or addresses to deny you access.
- Warning Signs: Receiving an email, letter, or text from your financial institution about an action you didn’t take, like a password reset or unfamiliar transaction.
-
Criminal Identity Theft: This occurs when someone gives law enforcement authorities someone else’s name and information during an arrest or investigation, often with a fake ID.
- Warning Signs: Being detained by police for unclear reasons, or being denied employment due to something found in a background check.
How Identity Theft Happens
Identity theft can occur through several channels.
- Lost or Stolen Wallet: Protect the contents of your wallet. Do not carry your Social Security card.
- Mailbox Theft: Secure your mailbox and sign up for services like USPS Informed Delivery.
- Public Wi-Fi: Avoid conducting sensitive transactions over public Wi-Fi networks. Use a VPN for a secure connection.
- Data Breaches: Assume your data has been compromised, and take proactive steps to monitor your accounts. Check your credit reports regularly.
- SIM Card Swap: Protect your phone account with a PIN or password and consider an authentication app.
- Phishing or Spoofing: Never provide personal information in response to an unsolicited email or phone call. Verify contact information from a trusted source. Look for official contact information to verify communications.
- Skimming: Protect yourself at ATMs and gas stations. Use cards with chips. Monitor credit and debit card activity alerts.
- Phone Scams: Always be cautious of phone calls asking for personal information. The IRS and other government agencies rarely contact taxpayers this way.
- Shoulder Surfing: Be aware of your surroundings and cover your hand when entering passwords or codes.
- Malware: Be cautious about links or attachments, and use a password manager.
Reporting Identity Theft
If you suspect or have confirmed identity theft, it’s crucial to report it immediately to begin the recovery process. The main steps usually include:
- Report to the FTC: File a report at IdentityTheft.gov.
- Create a recovery plan.
- Place a fraud alert with the three major credit bureaus.
- Contact companies where fraudulent activity occurred.
- Change your login information and passwords.
- Obtain your free credit reports and scrutinize them carefully.
- File a police report, if warranted.
For cases of tax ID theft, contact the IRS at 800-908-4490. For medical ID theft, contact your insurer and healthcare providers.
Identity Theft Protection Services
Several identity theft protection services offer assistance in monitoring your information and helping you recover from identity theft. These services can often reimburse you for losses. There are a variety of such services with different features and price points. Before signing up, check if you already have free benefits through existing credit cards, employers, or banks and credit unions.
Before paying for a service, compare the different options to find what is right for you and make sure to compare services to make sure that the service meets your needs.
