Now more than ever, identity theft is not only a realistic fear, but it actually happens all the time. In fact, according to a 2014 Javelin Strategy & Research report, there is a new identity fraud victim every two seconds. Yep, you read that correctly. Hopefully the institutions you trust with your financial and personal information will do their due diligence to protect you, but in all ways, it is your responsibility to protect yourself to the best of your ability. Here are several ways to protect yourself from financial data theft.
1. Take your passwords seriously.
Yeah, it’s simple enough to do the ol’ BirthdayDogName password, but this also means it’s simple for others to guess. You need to get crazy creative with your usernames and passwords. Of course, crazy in this instance means using a lot of #^$#*&!&@. Are complicated passwords harder to remember? Of course! But that’s the point. Hard to remember, hard to guess. And writing it down and taping it to your computer does not count—keep it stored upstairs.
2. Don’t carry everything with you.
There’s simply no need for you to carry your Social Security card, passport or any other extra forms of identification in your purse or wallet every day. Remember, anything on your person can be stolen at any time. And if you’re going to get robbed, there’s no need to hand your entire identity to the thief on a platter. Your extra forms of ID should remain at home in a safe.
3. Check your credit report.
Your credit report is important, but not for the reason you think. The emphasis is always on your credit score, yet your credit report holds so much more information than just a single score. Your credit report is a report of your financial life—including accounts under your name you may not even know about. If there is a store credit card open in your name in Houston and you live in Chicago, it’s important you find this out as soon as possible. You can access your credit report free each year. Don’t neglect this opportunity to check in on your financial life.
4. Be smart about email.
Everyone knows there is no Prince of Nigeria, but email scammers have gotten way more sophisticated. So sophisticated, in fact, that they’ve created websites to look exactly like your bank’s website. The best way to avoid these scams is to never click links from any emails. If you receive an email from your bank, go directly to your bank’s website and navigate to the appropriate area from there. You can’t be too careful.
Hacked? Here’s what to do about it:
There are times, despite your best efforts, you still aren’t able to prevent data theft. It’s just a reality of life in the 21st century. Despite the prevalence of the term “identity theft,” there are actually two main types of identity theft that are very different from one another. A financial account breach is what happens when your credit card or bank information is stolen and used to make purchases. An identifying information breach is when your pertinent personal information, such as your Social Security number, is stolen.
A financial account breach is not good, but the fix is pretty simple. Filing a fraud report with your bank and/or requesting a new card will solve the problem. An identifying information breach is significantly more harmful to your financial life. You can’t just request a new Social Security number or birth date. The best solution is to freeze your credit. It’s a simple and extremely inexpensive, or even free, process. Simply go to each of the three main credit bureaus (Experian, Equifax, and TransUnion) and follow the instructions to freeze your credit. When you want to open a line of credit, unfreeze your credit and then refreeze after the loan goes through.
Unfortunately, if you are a victim of an identifying information breach, it’s forever. Your credit will need to remain frozen for the length of your life.
Spend time today reevaluating all the ways you are currently protecting your identity. Improve where you can, and stay vigilant.
Peter Dunn, aka Pete the Planner, is an award-winning financial mind who has authored five books, hosts the popular Pete the Planner radio show and travels around the country offering financial education. His signature wit will have you laughing as you learn. For more from Peter, visit www.petetheplanner.com.