3 Ways to Help Protect Yourself from Identity Theft
Last week an IRS employee was sentenced to nine years in prison for an identity theft scam that victimized over 100 people and netted over $1 million dollars. Perhaps most disheartening, the employee who perpetrated these acts did so while working for the IRS Taxpayer Advocate Service, the very group at the agency tasked with helping victims of identity theft.1
The story highlights an increasing risk to consumers. Even as crime rates continue to fall across many categories, reports of data breaches and unauthorized financial activity continue to grow. Losses from identity theft now outpace all other property crime in the US2 and claimed 16.6 million victims and $24.7 billion in losses in a single year.3
As we spend more and more time online our personal information is increasingly at risk. Managing this risk is paramount to helping prevent issues and protecting our families. A few best practices can help.
Tip 1 – Monitor Your Credit Statement & Close Outdated Accounts
Federal law mandates that each of the major credit companies provide you with one free credit report per year. A best practice is to take advantage of this and request one for each member in your family then review the report carefully. Note every account listed on each report and ensure that they are current and accurate. Frequently accounts that you may have thought were closed may still be reporting to credit services with zero balances. Closing these accounts can help limit your exposure and can increase your credit score.
- Consider consolidating small accounts
- Regularly review your bank transactions online
- Choose strong passwords and security questions
- Set a calendar reminder to order another credit report next year
Tip 2 – Limit Your Exposure
The key to limiting your exposure to identity thieves lies in protecting your personal information. While securing your social security number is fairly intuitive, there are many other strategies that can be equally important. The first is to properly dispose of old financial documents. For hard copies this means shredding, but in the digital age it also means exercising care in disposing of old PCs and increased diligence in creating and maintaining passwords.
- Purchase and secure a fireproof safe for your important physical documents
- Never carry your social security card in your purse or wallet
- Secure your WI-FI connection, limit your use of public WI-FI
- Consider using a separate credit card for online purchases
Tip 3 – Have a Plan
Even the most diligent identity protection measures can go wrong. Increasingly sophisticated attacks or even a lost purse or wallet can thwart the best laid plans. If this happens, just remember that if you act fast to identify and mitigate the issue, your out of pocket expense can be minimal. This means building a plan of attack before trouble arises.
- Photocopy every important card in your purse or wallet and store the copies in your safe
- Make a list of phone numbers needed to put a hold on bank and credit cards
- Reply promptly to fraud alerts issues by your bank
- If you are a victim of identity theft, promptly file a complaint with the Federal Trade Commission (FTC)
The increasing incidence of identity theft requires all of us to take a little extra care to protect our family. By following these tips you can help mitigate a few of the risks. If you are interested in a more holistic risk management discussion to address concerns about your health, finances or legacy, we have experience building strategies to fit any family. Contact Josh or Doug at 608.271.9100 to schedule a consultation.