These days, it seems like every other week you hear about another data breach by a well-known company. Yahoo, Facebook, Marriott, Adobe, Equifax, and, just this month, Capital One. These are some of the biggest companies that have experienced data breaches in recent years, leaking hundreds of millions of customer records into the hands of potential identity thieves.
We hear about these data breaches so often that we become desensitized to just how serious this issue can be. Take a minute to think about the fact that there is a good chance your name, social security number, date of birth, drivers license number, credit card numbers, usernames, and passwords are floating around the “dark web” somewhere.
Does it concern you at all? Are you losing any sleep?
If you’re like most of us, it’s hard to take something seriously when you’ve never experienced the fallout from an identity theft. We figure we’ll deal with it when it becomes an issue, or we place too much trust in systems designed to help prevent fraud.
ID thieves can use your information to fraudulently open accounts in your name, take out loans, and otherwise destroy your credit. Some people don’t even realize they’re victims until the damage has been done and they’re denied for a new account.
Not only do you risk a direct financial loss from ID theft, the money you spend in legal fees and credit repair could extend into the thousands and take years to resolve.
This issue is not as rare as you might think either. According to a 2018 survey by Proofpoint, 33% of U.S. respondents said they experienced identity theft. This is serious enough for everyone to be a bit on edge about their personal information floating around the internet.
Fortunately, there are some simple steps you can take to help protect yourself against identity theft. Best of all, all these tips are FREE! There is no reason not to follow at least some of these suggestions.
1. Sign up for Free Credit Monitoring
There are three major credit bureaus that compile your financial data into your credit report; Experian, Equifax, and TransUnion. These companies hold information about the financial accounts you have such as credit cards, loans, mortgages, etc. This data includes your statement balance, payment history, the amount of credit you have available, and more.
These credit bureaus can also report on the addresses you’ve lived, previous names, public records (collections, bankruptcies, etc.), and how many times a vendor has checked your credit score (credit inquiry).
Since your credit report can contain so much information about your financial accounts, my first suggestion is to sign-up for a free credit monitoring service.
Even though you are entitled to a free credit report from each bureau once a year, I don’t think that’s frequent enough given how fast accounts can be opened in your name and damage done.
Credit Karma is my first choice for a free service, but they only provide reporting from 2 out of the 3 major credit bureaus, TransUnion and Equifax. Typically, your information would be the same on all 3 credit bureaus, but that may not always be the case.
If you want to monitor all 3, you’ll have to consider signing up for Experian monitoring separately, or a paid subscription to a service like Identity Guard. These paid subscriptions typically include some ID Theft Insurance coverage if you ever needed to recover from identity theft, but your homeowners or renter’s insurance may provide a little coverage for this as well.
By signing up for a credit monitoring service, you’ll receive alerts any time information on your report changes, such as a new account being opened or a new inquiry on your record. This would prompt you to review the changes to ensure they are authorized.
It’s important to note that signing up for these services does NOT affect your credit score.
2. Freeze Your Credit
While monitoring your credit is a defensive strategy, freezing your credit is an offensive strategy. Placing a security freeze on your credit means no one can access your credit report or open new credit in your name. This is one of the strongest methods of protection, and even though it’s a bit more work, I suggest everyone consider freezing their credit. (It’s free now!)
To put a freeze on your credit, you must contact each of the three credit bureaus I mentioned earlier. I’ll put a link to each website below.
Once you’ve created an account and established the freeze with each company, no one, including yourself, will be able to open new accounts in your name.
This is a great method to prevent damage to your credit from ID thieves, but you will have to remember to un-freeze your credit before shopping around for loans, opening new financial accounts, or even starting new utilities such as cell-phone service, electric, etc.
In my opinion, the few extra minutes it takes to freeze and un-freeze your accounts is worth it to avoid the countless hours you’d spend recovering from fraud.
3. Take your Social Security Card OUT of Your Wallet
This seems like a pretty obvious suggestion, but you’d be surprised how many people carry around important documents like their Social Security card in their wallet!
Keep important documents like your birth certificate and social security card out of your purse or wallet, and leave them in a small lock box in your home. While removing the documents from your wallet may be free, a lock box might require a small investment.
There are some heavy-duty fire and flood-proof boxes on the market, but those may not be as practical, especially if you’re traveling. Here is the small, fire-resistant security box we use to keep important documents such as our Social Security cards, birth certificates, passports, titles, etc.: Honeywell Security Safe Box. It’s not free, but it’s pretty dang cheap!
4. Be Cautious When Providing Your Social Security Number
Not only is it important to protect your physical documents, it’s also important to not give your social security number away to anyone and everyone that asks. Just because there is a line on a form for your SSN doesn’t mean you’re obligated to provide it.
There are certain situations you are required to provide your SSN, but you’re well within your right to ask someone why they need your number, how they will protect it, and whether or not you can decline or provide an alternative. The fewer places your SSN is floating around, the better. The Identity Theft Resource Center has a great article here on when you would be required to provide your SSN.
5. Beef-Up Your Passwords
Raise your hand if you use the same username/password combo for all your internet logins. Keep them up if your password is something simple like your dog’s name plus a number. OK…I’m guilty of this too!
Using the same username/password combo is dangerous because if your login information is leaked from one website, a hacker could easily access your online banking accounts and wreak havoc on your finances.
Having simple passwords can be cracked by computers in seconds and can give fraudsters quick access to your accounts.
So, how do you create complex, unique passwords for each online login while keeping them all straight? Luckily there is a free program called LastPass that will keep track of everything for you.
LastPass is a password manager you can install on your computer and phone that will keep track of all your usernames and passwords. When you go a website for the first time and enter your username and password, LastPass will ask if you want it to remember the information for you. Next time you go to the website on your computer, it will pre-fill the username and password for you.
When creating new passwords, LastPass will also help generate complex, secure passwords based on the website’s requirements.
Another great feature of LastPass is its “Security Challenge.” The program will analyze all your stored passwords and will tell you which websites have duplicate passwords. You can use this list to start changing your passwords to something unique for each site.
6. Enable Two-Factor Authentication
Have you tried to access a website, like online banking, and they text a code to your cell phone? This is called Two-Factor Authentication (2FA). It’s annoying because it takes an additional 7 seconds to log-in to your favorite website, but it’s an awesome security feature!
If you don’t want to change all your passwords, at least enable 2FA for any site you can. Even if someone did gain access to your username and password, they would also need access to your phone or email to get the special code for access.
Again, this may be an annoyance, but the extra step to protect yourself may save you a lot of headaches in the case of an ID theft.
7. Trust Your Gut – Don’t Click Weird Links or Answer Strange Calls
Finally, my last suggestion is to trust your gut when you feel that something isn’t right. Many identity thieves succeed because they trick you into giving your information by making you click a link in an email or by calling you and claiming to be the IRS or another authority.
I get so many junk phone calls that I never answer my phone unless it’s a contact I have saved. Many of the voicemails that are left by these junk calls are claiming that I’m in trouble with the IRS or that something regarding my student loans needs to be discussed.
If you receive an email where the spelling is off, or something doesn’t look right, be very leery about clicking any links. If something doesn’t seem right, search for the company’s number online and call them directly to verify their request is legitimate.
Likewise, be cautious about giving personal information over the phone to anyone you didn’t call directly. Sometimes “googling” the phone number on your call history can provide instant feedback on whether or not the person calling is a scammer.
Following the suggestions I’ve listed above can be a great start to protecting yourself against identity theft, but it’s not a guarantee. Identity theft is a serious issue that should not be taken lightly these days. It takes both defensive and offensive strategies to build a plan to protect yourself and your family. Even implementing just one or two of these suggestions may make the difference between a thief’s easy target or a waste of their time.
If you’re looking for more help reviewing your credit report or how to better protect yourself against identity thieves, schedule a free consultation with me today to see how we may be able to help.