How to Prevent Identity Theft
by Thomas Limborg
Maybe you notice a charge on your credit card you don’t remember or all of a sudden you stopped receiving your bills and mail. Unfortunately, we are seeing this more and more frequently as of late. Judging from this graph showing the number of fraud and identity theft reports since 2001, it makes sense! The COVID-19 crisis combined with the shift towards working from home has provided criminals with the perfect opportunity to profit from fear and uncertainty. So let’s talk about what you can do to prevent it.
Setup your Social Security Account Online Before a Thief Does
If you will be eligible for Social Security benefits, you must create your Social Security Account to prevent someone else from applying for your benefits. Once you create your account, verify that your Social Security earnings history is correct (if it’s not, then someone else is using your Social Security number!)
Freeze Your Credit!
The Identity Theft Resource Center published a study last year concluding that only 3% of the respondents who believed their identity was stolen froze their credit. For those who don’t know, freezing your credit is one of, if not the most, effective ways to prevent identity theft. It prevents new creditors from accessing your credit reports, meaning new credit cannot be opened under your name. Before you freeze your credit, ensure you have already created your Social Security account since you can’t do this with a frozen credit file. Note that you can freeze and unfreeze your credit for free at any time by contacting the three main credit bureaus below, and it does not have an impact on your credit score:
Once your credit is frozen, you will need to have each of the bureaus unfreeze it before applying for a loan. If you make the request online or by phone, they are required to lift the restriction within one hour, making it an easy way to protect yourself from identity thieves.
Protect Your Accounts
An estimated 2/3rds of Americans reuse passwords across their accounts. Using a password manager like Lastpass is not only convenient, but the randomly generated passwords add a substantial layer of security over the slightly different versions of that one password you’ve been using. Wherever possible, you should also set up two-step verification on your accounts to provide an extra layer of security. If you are adding security questions to your account, pick them carefully! You don’t want the answer to be something that can be found on your social media/online.
Bonus question: Would your spouse be able to access all the needed accounts in the event something happened to you? A password manager allows you to share a single password with your spouse, ensuring they always have the necessary access.
Watch Out for Phishing Attempts
It is quite scary how clever some of these scams can be. Below are the top-clicked email subject lines from phishers in Q2 2022, according to the security-awareness company, KnowBe4:
- HR: Your performance evaluation is due
- Google: You were mentioned in a document: "Strategic Plan Draft"
- IT: Inventory Form
- Microsoft 365: Microsoft 365 has new password requirements
- Amazon: Balance paid on your seller account
- Xerox: New document was processed for [[email]]
- Zoom: [[manager_name]] has sent you a message via Zoom Message Portal
- Facebook: Your recent Facebook login
- Your fax is pending for preview
- Money has been successfully withdrawn from your Bank Account
The takeaway here is to pay especially close attention to emails that have a sense of urgency to them. Always watch out for links, attachments, or email domains you don't recognize.
Verify Charitable Organizations Before Giving
Okay, this one isn’t exactly identity theft, but it is definitely something you should be aware of if you're a charitable giver. Sadly, many scammers will try to take advantage of your kindness. First, do not donate with gift cards or by wire transfer, and be extremely careful making cash donations. Second, do not let anyone rush you into making donations without first doing your own research on the charity – I recommend using Charity Navigator to help spot potential scams or other red flags.
In the event your identity gets stolen, the Federal Trade Commission provides the steps you need to take to secure your information. They also provide sample letters for removing inaccurate information from your credit report, stopping debt collectors from trying to collect on debt you don’t owe, etc. Consider also signing up for identity theft protection – I recommend IdentityGuard.