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Friday, April 14, 2017

Guarding Against Identity Theft

Written by  Woody Derricks, CFP®

Identity theft is becoming a greater concern as our personal information becomes easier for thieves to access. While you can’t stop someone from hacking your employer’s or your favorite retailer’s data centers, there are things that you can do to reduce the likelihood of having your information stolen and minimize the potential losses if a theft occurs.

Online data – Be smart when you’re online. Social media is a great way for thieves to learn more about you. Take steps to limit the amount of personal information you share (employer, where you’ve lived, family members, etc.), post those family vacation pictures after you return, and make sure that your privacy settings limit what others can see about you. It might be okay for your friends to see what you’ve been up to, but you don’t want just anyone being able to see your social media feeds.

When you make online purchases, resist the temptation to store your credit card online with that company. While it will make repeat purchases easier, it leaves your information with their data center – and we know how vulnerable that can be.

You may want to do an online search of your name from time to time. By doing so, you’ll be able to see what others can see and if someone has created other online profiles with your name.

I recently read an article online (Time.com/money/4634434/family-tree-now-opt-out-protect-yourself) about a website that provides anyone with the ability to pull up your name, age, past residences, past phone numbers, and others with whom you may have associated (family and friends). If you see a site such as this, you may want to take a few minutes to opt out to help keep your information private.

Passwords – There are so many places that require passwords that people often create one that is easy to remember and use it for every site they can. The problem is that easily remembered passwords are also easily hacked, and passwords used on multiple sites create more opportunity for thieves. Take the time to create complex passwords and update them every few months. Also, don’t use the same password for all websites.

You may want to contact your credit card and service companies to ask that they put a password on your account. Ideally, they should require this password to provide information over the phone about your account. This limits someone from getting your credit card number and having a new card issued to their address. If someone can easily find your family members online, they’ll be able to find the answers to traditional authentication questions such as your mother’s maiden name.

Email – First, don’t open an email from someone you don’t know. Nobody is giving you $1,000,000. Second, don’t click a link or open an attachment (even from people you know) if it seems suspicious. Your friends don’t normally send a web link to you with “Hey check this out.” We’re all busy, but don’t be too busy to carefully read and consider what you’re doing with an email.

Also, take the time to periodically look at the folders you have in your email account to make sure nothing new has been added. I’ve had several clients who had their email accounts hacked. The hackers set up a separate folder in their email account and started emailing companies in an attempt to get the client’s personal information or money. Fortunately for my clients, nothing was stolen, but you can’t be too careful.

At home – A couple of easy steps to take at home are forwarding or freezing your mail when you’re away from home and shredding your personal documents. When you’re out of town, thieves can get your statements out of your mailbox and use those statements to forward phones, add on services to utilities, and have credit cards issued to a different address. Taking a few minutes to go USPS.com online could save you countless hours of fixing problems down the road.

Make sure to shred your personal documents. Personal documents aren’t just those with your account number, birthdate, or Social Security number listed. Nearly all the offers you receive in the mail for things such as credit cards, personal loans, or home loans have tracking information on them that a thief can use. Those firms already have most of your personal information on file and the tracking numbers can help a thief skip a few steps while getting credit under your name.

Monitor your accounts- While it’s important to take steps to help prevent data theft, you also need to monitor your accounts for unauthorized activity. Yes, this means reading your statements. It can also mean using a service that allows you to review your account activity weekly.

Often someone will test your credit card accounts by charging a small amount a few times to verify that your account is active. You won’t notice charges less than $10 as they test your account if you’re not regularly watching your activity. By the time a thief starts charging large amounts, it will be too late. While charges are often credited back by your company, not all charges will be. Plus, it could take you hours of your time to file a claim and follow up with them to ensure the charge is taken off your account.

Credit agencies – Take advantage of your free annual credit report. This will let you see if anyone has been adding accounts under your identity.

You can also contact the credit bureaus to freeze or restrict your credit. That will help prevent someone from being able to take out a new credit line in your name. As I recently learned with some of my clients, it can also restrict someone’s ability to open a new bank or investment account under your name. Security freezes are not free. Each agency charges a fee for this service, unless you are already the victim of an identity theft. The time and cost from for setting these up are minimal compared to the time and cost of resolving identity theft.

Woody Derricks, CFP®

Woody Derricks, CFP®

This article is for informational purposes only and is not intended to provide specific advice to any individual. Consult your legal, tax, and/or financial advisor to determine what is appropriate for your situation. Securities offered through LPL Financial, Member FINRA/SIPC.

Website: partnershipwealthmanagement.com
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