This article was co-authored by Patrick Brault, principal and regional director at Wipfli Hewins Investment Advisors.
Did you know that approximately every 3.8 seconds someone in the United States has his or her identity stolen?1 In 2012, 12.6 million consumers in the United States—or more than 1 in every 20 consumers—fell victim to identity fraud.2 What’s more, one out of every five victims claims his or her identity was used fraudulently for up to four years before the crime was discovered.3 Rapid advancements in technology have enhanced our lives, but have also exposed our personal information to an increased risk of theft. With so much personal data out there and so many clever thieves around, is it inevitable that each of us could become a victim sooner or later?
Maybe, maybe not. This much is true: Most people do little to protect themselves, which increases their odds of becoming victims. Use our checklists and improve your security odds.
Real Threats, Costly Damages
Identity theft has surpassed drug trafficking as the number one global crime, according to www.FactsAboutIdentityTheft.com. Identity theft occurs when someone steals another person’s name, social security number, bank account number, credit card number, or other financial and personal information with the intent to commit fraud or other serious crimes. To thieves, your identity is currency. With it they may attempt to purchase goods with your money, charge your credit cards, drain your bank account, get income tax refunds, set up utilities, secure student loans, and even obtain health care benefits and medical care on your health insurance.
Thieves can access your personal information many ways. They can get hold of your paper records by intercepting your mail delivery or by doing a “dumpster dive” – and sift through your discarded paper that may contain sensitive information. Thieves may also try to access your paper records in your home and wherever your information is held—your workplace, your child’s school, your doctor’s office, your bank, and the list goes on. Other methods for stealing your identity include social engineering and electronic scams. Among them are e-mail scams and fraudulent websites that try to trick you into revealing your personal information and pretext calling whereby thieves pose as legitimate company representatives to obtain your personal data.
Thieves also troll Facebook, LinkedIn and other social networking sites for personal information and clues about your life, so be careful about what you post. In addition, without the right security measures, laptops, smartphones, and information in the cloud, like Gmail and Google Docs, are all fair game to thieves.
Identity theft can be devastating. It’s estimated that the financial losses to businesses from identity theft are $56.6 billion.4 For the individual, identity theft wreaks havoc on personal finances, credit history, and even reputation. Resolving it takes time, energy, resources, and actual dollars.
Telltale Signs of Identity Theft
Suspicious signs include:
— Unexplained bank activity and/or receiving a call from your bank processing center regarding questionable purchases.
— Bills missing or mail you’re expecting not arriving.
— Merchants refusing your checks.
— Receiving calls from debt collectors regarding debts that aren’t yours.
— Unknown accounts on your credit report.
— Medical providers billing you for services you didn’t use.
— The electronic filing of your income tax returns being rejected by the IRS or receiving IRS notification of multiple returns filed.
— Receiving a data breach letter from a company could indicate you may be a victim of fraud, or soon will be. Take all notifications seriously.5
Identity Protection Checklist
Vigilance is critical to protecting and safeguarding your identity – in both physical and electronic spaces. Equally important is having a response plan ready should you become a victim. The following checklists for physical and online security can help you protect your identity and help you develop a personal security strategy.
Physical security checklist:
— Store all computer equipment (laptops, desktops, USB drives) in a secure place.
— Secure all records and paper notes when not in use.
— Lock desks and file cabinets when you are away
— Consider a home safe and a safe deposit box.
— Destroy sensitive documents with a crosscut shredder and destroy all information you don’t need. Wipe out or destroy computer hard drives.
— Shred or destroy hard copy documents, CDs, and DVDs.
— Lock up government IDs when not in use (social security card, passport).
— Install a secure mailbox, if possible.
Online security checklist and actions:
— Identify and secure all equipment and information.
— Encrypt passwords and update security patches.
— Avoid using public computers to access personal information
— Lock access to equipment and use screen savers.
— Encrypt your laptop. Use antivirus and antispyware software.
— Avoid storing personal information on smartphones and tablets.
— Never share or e-mail passwords. Don’t create passwords using personal information (don’t use family or pet names).
— Develop strong passwords (eight characters, capital letters, numbers, special characters) and change them frequently.
— Use password management tools, if you can.
Personal Security Strategy:
— Do not share personal information and question any requests for it.
— Shop only on secure online shopping sites.
— Consider using virtual credit card numbers.
— Reconcile bank statements monthly.
— Limit the use of debit cards and avoid using them for online purchases.
— Check your credit report and bank statements regularly. Rotate between the three major credit bureaus and check credit reports every four months. Consider implementing a freeze for any future credit requests if you do not actively check your credit.
Develop your personal response plan:
— Create a plan that includes a complete inventory of all online accounts, credit cards, bank accounts, etc.
— Keep contact information for your banks, financial accounts, credit bureaus, etc. readily available.
— Diversify accounts. Avoid having all your money in one bank. Use multiple financial institutions.
— Consider using a third-party identity protection and monitoring service if you are not confident that you have a good plan in case of identity theft.
Be Vigilant. Reduce Your Risk
Identity theft is a serious matter. Be vigilant. Learn about the pitfalls of not adequately protecting your identity, and implement the necessary steps to safeguard your identity or seek out services that will help you do so.