What we commonly call identity theft is the use of someone’s personal information to commit fraud, and unfortunately it is widespread and on the rise. In 2018, 450,000 identity theft complaints were logged, and collectively they caused financial losses of $488 million. Here are 10 steps to take to protect yourself from identity theft.
As a financial advisor in Utah, we’ve written other blogs on the subject of wealth accumulation and transfer. Please check them out before reading this blog.
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Identity theft and your wallet
Identity theft can be detrimental no matter your bank account, but it can be especially damaging for a high net worth retirement, because the more money you have, the more you can lose.
That said, protecting your account and other personal information should be a part of everyone’s comprehensive financial planning checklist. Avoiding identity theft is a matter of instituting common-sense practices and remaining vigilant. At Rock House Financial, keeping your personal information safe is extremely important. We have our own processes in place to protect our clients’ information, but there are things that you can do as well.
How to prevent identity theft – 10 ways
1. Protect Your Social Security Number
Social Security numbers are highly important to identity fraudsters, because once you know someone’s Social Security number, you’re on your way to unlocking other personal and financial information.
As a result, never give your Social Security number to someone who calls you and asks for it, even if they sound official. If you think a phone request has validity, tell the person you’ll call back. Don’t call the number that appears on your phone. Call the number you have on file for the person, institution or bank that requested it.
Scammers often use scare-tactics to get you to provide your personal information immediately. They’ll say things like, “Your account will close if we don’t receive your Social Security number now.” Knowing ahead of time that an unsecure request for your personal information is a red flag can help you identify fraud before you give too much away.
Another tip: Don’t carry your Social Security number with you. Instead, store your card in a safe place, such as a safe deposit box.
2. Know Your Social Security Benefits Information
While we’re on the topic of Social Security, it’s important to know your benefits information, because Social Security benefits themselves can be the target of scams.
It is possible for identity thieves to apply for benefits in your name and set up their own (or fake) accounts to receive the deposits – and you may discover it only years later, when you begin to file for your own benefits.
If you pay Social Security taxes and are or will be eligible for Social Security benefits (regardless of your age), you should register for an account on the Social Security Administration’s (SSA’s) website so you can periodically review your account and alert the SSA of any suspicious activity.
Let’s talk. Contact Rock House Financial and start planning for a secure future.
3. Protect All Your Financial Account Information to prevent someone trying to steal your identity
While your Social Security number is a highly sought-after piece of information, it’s important to keep the numbers and identifying information for all financial accounts safe and secure as well. That’s true for bank accounts, savings accounts, retirement and investment accounts, credit card accounts, loan accounts – anything financial.
Keep the numbers in a safe location. Shred all paper statements so the account numbers aren’t found once your garbage is emptied. (Seriously, this happens.)
And never, ever, give this information out through phone or e-mail. Some phone numbers and e-mail can be doctored to look like it’s coming from official government accounts (such as the IRS or SSA) or from the financial institution that holds your account. If a request sounds suspicious, it probably is. Again, hang up and call the institution back on a number you have on file.
4. Review Your Financial Accounts for Unauthorized Activity
One of the best ways to protect yourself against identity theft is to periodically review your financial accounts for unauthorized use.
Make a comprehensive financial planning checklist of all your accounts, and carefully go over your monthly statements, either online or on paper. Flag anything that looks unfamiliar and call your financial institution immediately.
5. Manage Your Passwords Effectively
Passwords are a first line of defense against identity theft. It’s important to manage them effectively.
First, choose a complex password. Do not use something like “password” or “1234.” It’s also not wise to use your spouse’s first name, your birth date or anything else that could be easily guessed by a hacker.
Second, make sure you change your passwords regularly.
Third, avoid accessing accounts that require passwords on public computers, if possible. If you do have to use a shared computer, change your password after you use it.
One more word about passwords: While they’re the first line of defense, they aren’t foolproof. Many observers believe that passwords are fairly easy to hack. Never rely on them as your only line of defense; use the other tips here as well.
6. Don’t Risk Identity Theft through what you post on Social Media
Many people don’t realize that the information they share on social media could help a hacker break into an account, hence risking identity theft.
For example, banks and other financial institutions often ask for personal information as part of their security systems. There are often security questions, like what’s your favorite food, the name of your first pet or your mother’s maiden name.
Hackers can look at your social media accounts to pick up details that can help them with their crimes. Don’t put details on Facebook, Instagram, Twitter or other accounts that you’ve used in security questions.
7. Verify You’re on a Secure Site Before Sharing Information
If you bank online, check your retirement accounts from your phone or even buy something from a trusting site, make sure the URL is secure. There will often be a lock icon next to the URL if it’s a secure site. If not, be wary of sharing credit card and account numbers.
At a minimum, any device (computer, smartphone, tablet, etc.) should have anti-virus, firewall and other standard protection. It’s also a good idea to have malware protection. Malware can be used to lock and crash your devices so you don’t have access until you pay a ransom of some kind. Your identity can be breached through this process.
8. Actively Manage the Storage of All Financial Documents
Don’t simply put your financial documents, such as financial statements, records, mortgages, deeds, titles, stock certificates and wills, in a filing cabinet and forget them. These, too, can be targets of identity thieves. Anything that reveals your assets and gives access to their existence is a potential target.
People who come to your home to work or install things can look at or take financial documents when you’re not around. Sadly, so can family members. Retirees can be especial targets of this kind of financial abuse from caretakers or family members.
Because of this, look into electronic, encrypted storage for important financial documents. Many financial institutions will digitize and store documents for you.
If you don’t want to pursue an online avenue, keep your hard-copy documents locked in a safe, and keep the key in a secure location. (Make sure that someone you trust, such as the executor of your estate, has access or knows of the key’s whereabouts, so someone can access your accounts if you unexpectedly fall ill, become incapacitated or pass away.)
9. Verify the Charitable Organizations that Ask for Contributions
When giving to charity, funds can be donated in many ways. Beware of who you’re giving to. It’s easy for fraudsters to make a website look legitimate – and even a pop-up site or individual canvassers can seem legitimate – when they’re not.
If you are solicited by a charity that you’re not familiar with, research it to verify its legitimacy before making a donation.
10. Report Any Identify Theft Attempts
Identity theft can be prevented by following these tips, but if you do fall victim to fraud, it’s important to report it right away. If you’ve been the victim of identity theft or an attempt, report it immediately to the U.S. Federal Trade Commission here and contact the financial institution that holds your account immediately.
Again, securing your financial and personal information should be a part of everyone’s comprehensive financial planning checklist. Don’t wait until you become a victim. Know the red flags and take the right steps.
Preventing identity theft of a dead person
As strange as it may sound, it’s common for deceased people to have their identities stolen. When news of a person dying is published through obituaries and other public venues, unscrupulous people see it as an opportunity to take advantage of the recently departed person’s family in a moment of weakness.
Prevent identity theft of a deceased person by:
- Notifying credit bureaus so they can prevent fraud in the person’s name. Putting a “deceased indicator” on the person’s credit profile, preventing new credit lines from being opened. Usually the Social Security Administration or funeral home will do this, but you don’t want to wait for them – do it right away.
- Report the death to Social Security, the IRS, and all financial companies that the deceased has a line of credit or account with. You may have to send in the actual death certificate.
- Be selective who you provide information to. Err on the side of caution and don’t give out specifics to anyone other than people who have a right to know (accountant, financial advisor, close family and friends, etc.) Don’t give out details publicly in the obituary, the internet, or on social media.
Identity theft after death is nothing to take lightly. It may result in lines of credit being opened in the person’s name, government benefits, bank or investment account balances being stolen, and even inheritances being misallocated. Take the precautions described above, and keep monitoring the deceased person’s credit reports for a few years afterwards to ensure no foul play.
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At Rock House Financial, a fee-only financial advisor in Farmington, Utah, we are charitable giving tax mitigation specialists. We work with families, business owners, and individuals who wants to make an impact through giving.
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The opinions expressed herein are those of the firm and are subject to change without notice. The opinions referenced are as of the date of publication and are subject to change due to changes in the market or economic conditions and may not necessarily come to pass. Any opinions, projections, or forward-looking statements expressed herein are solely those of author, may differ from the views or opinions expressed by other areas of the firm, and are only for general informational purposes as of the date indicated.