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6 Ways to Protect Your Financial Identity

Anyone can fall victim to identity theft, fraud, and account takeovers. This is what you can do to protect yourself.

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Six Ways to Protect Your Financial IdentityFirst let me define what identity theft is–identity theft and identity fraud are terms used to refer to all types of crime in which someone wrongfully obtains and uses another person’s personal data in some way that involves fraud or deception, typically for economic gain.

There are thousands of new identity fraud cases reported each day. A Javelin study found 15.4 million people or 1 in 16 people were victims of identity theft in the United States. Chances are one day you’ll be a victim but knowing how to protect yourself can lessen the impact and stress.

Almost a victim of an account takeover

A few months ago, I was at a gas station waiting for the attendant to pump gasoline into the car. I handed my credit card and a few seconds later the attendant stated it was declined. I didn’t think much of it so I handed him my debit card. He, then, stated the debit card was declined as well.

I assumed they had issues with their machine so I drove to a gas station across the street. Again, I was told the card was declined. I checked my accounts on my banking apps and everything looked fine. So I called the bank trying to figure out what was happening with my accounts.

It turned out I was almost a victim of an account takeover.

At first, I was confused as to why I wasn’t notified by email, or a letter, or a message within the bank’s app. But apparently, the bank left a voice message that I had not listened to. Like others in my generation, it’s rare to listen to a voice message. I came to learn the bank’s policy was to contact the last phone number on file and wait for a response. In protecting their customers, they decided to freeze my accounts until I returned the call.

When I called I was told some questionable charges were appearing on my accounts along with an address and phone change request.

What was dumbfounding was the time it took for me to realize my accounts were compromised. The bank, where I have both my debit and credit card, reached out to me 7 days prior to the gas station issue. That meant I had no clue my accounts were almost compromised for an entire week.

How to protect your financial identity

In my case, I don’t know what information these fraudsters had and how they came to have it. All I wanted to do going forward was to find better ways to protect my identity.

I sat down and thought of ways to protect my financial identity and secure your information.

1. Keep your Social Security Number safe

Do not share your Social Security Number with anyone who doesn’t have the legal right to request it. Ask how your Social Security Number will be used and how they are safeguarding your personal information.

2. Review your credit report

Request your credit report from AnnualCreditReport.com. Check for inaccurate information in credit reports such as misspelled names, wrong addresses, incorrect employer information, credit cards, and loans reported that do not belong to you, or credit inquiries that were not initiated by you. Consider using a credit monitoring service that tracks the information found in your report. There are free and paid services available.

3. Dispose of financial statements, credit card statements, pay stubs, bank records properly

Blackout any identifying information such as your name, address, and account numbers. Get yourself a good black marker. Then, shred the documents.

4. Watch out for fake websites that look like your financial institution’s website

Never click on a link in an email that sends you to a login request. Always go directly to the website and verify the URL before trying to log in or use the app. You can also help others by reporting emails that do not seem legitimate to your financial institution. This can help them identify potential threats and shut down fraudulent websites.

5. Do not reply to an email requesting verification of accounts

Financial institutions and government agencies will never request to verify your personal information through email. If you’re in doubt, find the number of the creditor or agency requesting the information from a verifiable website and inquire about the email. Again, never respond to unsolicited emails requesting personal information verification. This includes Facebook or social media verifications that you did not initiate.

6. Don’t fall for telephone calls or text message scams

Watch out for phishing scammers calling or sending text messages. If you receive an unsolicited phone call asking to verify your personal information, request their information and call them back. If a person is purporting to be your bank, call your bank directly by visiting their website or finding the number of the credit card company’s call center on the back of the card. Also, be mindful of text messages with links that direct you to verify your information.

Additionally, the IRS does not initiate contact with taxpayers through email, telephone calls or text messages or social media. Know the tell-tale signs of tax scams to keep your information safe.

The Bottomline

There are things you can do to lessen the possibility of identity theft and fraud as listed above. However, companies, like Equifax who reported that over 147 million people’s personal information was stolen, can be hacked. The unfortunate reality is that identity thieves will attempt to get your data somehow. They may hack companies, rummage through your garbage, send fake emails or make threatening phone calls. Sometimes there’s very little you can do, but that doesn’t mean you shouldn’t make it somewhat harder on them.

Get some peace of mind by using services that help you monitor your credit and signing up for alerts and notifications from your banking services. Using one or a few of the free credit monitoring services can at least alert you of changes to your report. And setting up notifications and text alerts whenever withdrawals or charges are made on your checking, debit and credit cards can help you resolve issues quicker.

 

Jason Vitug

Jason is the founder of phroogal, creator of the award winning project Road to Financial Wellness, and author of the bestseller and New York Times reviewed book, You Only Live Once: The Roadmap to Financial Wellness and a Purposeful Life.

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