Are You Safe From Identity Theft? – Part I

The buzz around identity theft has grown in recent years, following a series of highly publicized data breaches at major retailers. The crime not only leaves a lasting emotional impact on victims, but it can take a financial toll, as well. According to Javelin Strategy & Research, identity thieves stole more than $16 billion from 12.7 million American consumers in 2014.1 We know the threat is real, but what exactly is identity theft and what can you do to help prevent it from happening to you?

Identity theft is the crime of obtaining someone’s personal or financial information — without their authorization — for the sole purpose of assuming their identity to commit fraud or other offenses, from every day transactions to obtaining loans.2 Anyone with a Social Security number is susceptible to identity theft, and the crime continues to top the Federal Trade Commission (FTC)’s national ranking of consumer complaints, resulting in billions of dollars and countless hours spent fixing the problems created by imposters.

Most cases of identity theft are typically preceded by a data breach. A data breach is an incident that involves the unauthorized or illegal viewing, access or retrieval of data by an individual, application or service, with the intention of stealing and/or publishing that data to an unsecured or illegal location.3

Today, the ability to transfer data so easily has led to many reports of data breaches within companies throughout various business sectors, putting many consumers at risk of having their identities compromised. In fact, the Identity Theft Resource Center (ITRC) revealed that 450 data breaches have already occurred this year.4

But the news isn’t all bad — the ITRC also reported that the exposure of Social Security numbers and credit and debit cards has declined over the past five years, from 62 percent and 26 percent in 2010, down to 41 percent and 18 percent in 2014, respectively.5 Notwithstanding the increased implementation of security measures to help mitigate these crimes, identity theft is still a big threat to consumers because of the potentially disastrous financial impact involved.

Are you safe from identity theft? Part I

So how can you protect yourself and lower your risk of becoming an identity theft victim? Here are a few steps you can take today:

Secure Your Personal Information

Be smart about the documents you keep in your wallet or bag. Never carry essential documents, such as your Social Security card, birth certificate or passport, with you. Instead, consider storing your personal information in a safe place at home.

Avoid carrying more credit cards than you actually need, in case your wallet is lost or stolen.

Do not respond to unsolicited emails requesting personal information.
These messages, along with pop-up web pages, can be dangerous and may lead to your information falling into the wrong hands. Contact the company in question if the request seems suspicious.

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

Strengthen Your Digital Security

Create complex passwords to keep from falling prey to online hackers. Avoid using easy-to-guess information, such as birthdays, phone numbers and license plate numbers, and remember to create a unique password for each of your accounts.

Install firewalls and antivirus software on your home computer. Be sure to update the software regularly for the most secure protection.

Practice caution when making purchases online. It’s important to ensure that the company’s website is legitimate and to review its privacy policy to gain an understanding of how your information will be used. Refrain from submitting your credit card or financial information until you’ve checked the website for security symbols (look for the lock icon encryption).

Beware of phishing scams, including emails promoting false lottery wins, money requests from “charities” and information updates from “banks”. Avoid clicking on any suspicious links in the emails, as well.

Use secure payment methods whenever possible. If you need to send documents that include your account number, Social Security number or other forms of identification, remember to password-protect the document or send it via a secure portal.

Take Advantage of Available Resources

Consider placing a fraud alert on your credit file. This will instruct prospective creditors to keep identity thieves from opening new credit accounts in your name.6

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 delay or interfere with the approval of outstanding loan applications; this may be a viable option if you don’t need to open new lines of credit.

Taking these precautions will help you keep your personal information secure and for your eyes only. You can also visit USA.gov for additional steps you can take to keep your identity safe.

Even after you’ve safeguarded your information, it’s also important to prepare for the worst-case scenario.

Read Part II to find out what steps you can take to stop the spread of your personal information if your identity is compromised

 

Hewins Financial Advisors, LLC d/b/a Wipfli Hewins Investment Advisors, LLC (“Hewins”) is an investment advisor registered with the U.S. Securities and Exchange Commission (SEC) 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 Form ADV Part 2A brochure, copies of which are available upon request at no cost 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.
OneBite Editorial Staff
OneBite Editorial Staff

OneBite® is a Top 50 Financial Advisor Blog powered by Hewins Financial Advisors. Founded in 2011, the digital magazine is dedicated to providing intelligent, in-depth coverage and analysis of the top financial and economic issues facing investors today.

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Are You Safe From Identity Theft? – Part I

time to read: 4 min