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Identity theft is a two-step process. First, someone steals your personal information or corporate data, which is bad enough, but then the thief uses that information to impersonate you and commit fraud. If someone steals your identity it can create substantial financial risk and be extremely frustrating because at a minimum you have to change passwords, create new accounts, order new documents, and notify contacts about the loss. However, it is what the criminal does with the information that makes it so damaging. Credit card fraud, emptied bank accounts, obtaining IRS refunds, medical and insurance fraud, mortgage and utilities scams, enterprise revenue loss, the list goes on and on. Using a few of the following suggestions can greatly reduce your exposure to these scammers and if identity thieves can’t access vital data such as your social security or bank account numbers, they can’t defraud you.
It’s up to you to protect your personal and business information. Here is some basic tips which can’t be repeated enough since last year the Federal Trade Commission reported that identity theft was the leading consumer complaint to the FTC. Most of this you already know, but it does no good to read these suggestions and then not act upon them!!
Some identity theft occurs the old-fashioned way, meaning someone goes through your mail or your trash (or your medical provider’s trash) for your financial or medical records. However, thieves have found an easier way to get you to reveal private details and most identify theft occurs online. This can happen when hackers infiltrate your computer and install keystroke loggers to steal data or capture account passwords as you type them, or they may use fake emails and websites to get you to voluntarily offer up sensitive information. There has been an increase in identity thieves impersonating legitimate organizations so be very careful in replying to email solicitations or requests for financial information. Remember, the IRS and other government agencies do not ask for sensitive information in an email, nor does your bank or other financial institution. If a charity contacts you online, ask that they send you information in the mail. Legitimate charities are happy to do so.
Transact financial business online only with secure websites with URLs that begin with “https:” or that are authenticated by companies like VeriSign. Install personal firewall, antivirus, anti-spyware, and anti-spam protection. In an organization, talk to you IT department, they are the experts.
Create complex passwords that identity thieves cannot guess easily. A short sentence is even better than one word, use something you can remember like “I love sugar donuts” or “kayaking relieves my stress”. The longer the password the harder it is to crack. Did you know that hackers have the ability to try BILLIONS of passwords per second using password cracking tools? And after hundreds of articles urging people to use complex passwords, 123456 is still the #1 password? If creating a different password for each of your websites sounds like an impossible task, at least use different username/password combinations for your financial and sensitive data sites. Remember, if a hacker can figure out your standard password, then everything you have will be compromised. Lastly, change your passwords if a company that you do business with has a breach of its databases, your password may be “up for sale” by the hackers.
In addition to your password, change your “security” question to be nonsense. It’s fairly easy to figure out your mother’s maiden name or where you graduated from high school with a simple Google search. Lying on a security question is okay, it’s just a little white computer lie! If the question is your grade school answer MIT or Princeton or your first girlfriend’s name could be Cher or Beyoncé—you get the idea. Just make sure you remember your answer.
Regularly check your credit report for unusual activity. If you see anything strange or unexpected, follow up immediately. Meanwhile, monitor activity on all your financial accounts–from banking to investments to credit cards. If the financial companies you do business with offer activity alerts, sign up for them. And if you receive an alert, or your financial institution reports unusual account activity, respond as soon as possible.
You do not have to pay for credit monitoring since you can obtain a free report once a year from the 3 major reporting companies, Experian, Equifax and Transunion. Request one report every 4 months so that you have 3 reviews a year. Check the report to be certain that it doesn’t include accounts that you have not opened and if you do suspect someone has gained access to your account information you can ask for a credit freeze. A credit freeze lets you restrict access to your credit report which makes it difficult for identity thieves to open a new account in your name but be aware that this does not prevent them from accessing your current bank or credit card account.
If someone has stolen your identity, quickly take steps to minimize the damage. Close financial accounts that may be compromised. Cancel your driver’s license, credit cards or IDs you may have lost. Put a fraud alert on your credit report and track your report closely for the next few years—yes years!
People often say that reporting an identity theft crime to local authorities does no good because the local police can’t act on the complaint. However, notifying the police does help if you have to file an insurance claim or try to prove your identity was stolen. You may also find some assistance by going to the websites of your state’s attorney general, the Federal Trade Commission, or one of the nonprofit identity theft protection organizations. They all have information to help you through this infuriating event.
Hackers are a formidable threat, whether they are working as part of a criminal syndicate or as a lone-wolf. It’s up to you to outwit them and taking just a little more time to make it harder to obtain your identity is well-worth the trouble.