Are you wondering how to prevent identity theft? As we battle the medical and economic obstacles of COVID-19, many of us are faced with another challenge: identity theft and fraud. In times of uncertainty, scammers are more likely to feed off of consumers’ distraction and sense of fear, and in the midst of a global pandemic, things are no different. In this article, we define identity theft and share strategies for recovery if your information is compromised.
What is identity theft?
Simply put, identity theft takes place when someone uses information about you without your permission, and preventing it is a key. This information can include your name and address, social security number, credit or debit cards, bank account numbers, date of birth, and other identifying information about you that may not be readily available to others. When scammers get ahold of this information, they can use it to apply for credit in your name, steal your tax refund, obtain medical services, conduct unauthorized bank transactions and even pretend to be you if they are arrested.
Why should you care if someone steals your identity? You may become responsible for what the thief does while using your personal information, even if you are unaware of these activities. Identity theft can also negatively impact your credit score, which is your reputation as a borrower, and in turn can affect future loan applications, insurance premiums, job applications, and more. Indeed, this is why you need to prevent your identity from being stolen.
During COVID-19, financial institutions have seen an increase in identity theft and phishing scams. Because of the high levels of uncertainty and stress right now, people are less likely to focus as closely on email content, and may be more likely to click links that aren’t safe.
While identity theft and fraud may be on the rise, there are precautions you can take to protect yourself.
Spotting and Preventing Identity Theft and Fraud
To keep your financial house in order, it is important to check your credit report regularly. In the past, consumers could pull a credit report from each credit bureau (Equifax, Experian, and TransUnion) for free once a year. Indeed, checking your credit report is an important tactic to prevent identity theft. However, because of the uptick in fraud during the coronavirus pandemic, you can now pull your credit report once per week from each credit reporting agency through April 2021.
What to keep an eye out for on your credit report
When reviewing your credit report, keep an eye out for incorrect names or other incorrect personal information. For example, if you are a “junior” or have a similar name to a family member, make sure that none of that family member’s accounts are mistakenly listed on your credit report. Take a look at the list of accounts opened in your name and any inquiries that have been made to ensure that nothing has been opened or applied for without your knowledge.
In addition, be sure to check your credit and debit card transactions daily to ensure that you recognize all charges that have been made. If you notice anything suspicious, contact your financial institution immediately to close out that card, get a new number and add other protections to the account, such as a password. The sooner you notice any fraudulent activity and notify your financial institution, the more potential damage that you can prevent.
Tips for Preventing Identity Theft
To prevent identity theft from happening altogether, there are several safeguards that you can put in place. We break down a few easy ways to protect yourself.Keep your financial records, Social Security card, and health insurance information in a safe place. Do not carry your Social Security card with you, and avoid giving your Social Security number out unless absolutely necessary. Instead, ask if you can give another form of identification.
Shred important papers when it is time to dispose of them.
If you have documents at home with account numbers or other sensitive information, shred them rather than throwing them out. Some fraudsters do obtain information through dumpster diving, but shredding your documents will make it harder for them to use that information against you. Many financial institutions host free “shred-a-thon” events, allowing community members to safely dispose of their personal documents, making it a great way to prevent identity theft.
Be careful when using public Wi-Fi.
Scammers will often spoof a coffee shop or restaurant’s public Wi-Fi network and trick people into entering sensitive information. When using public Wi–Fi or a public computer, do not enter passwords, credit card or bank account numbers, or any other information you would not want scammers to get ahold of.
Be aware of data breaches.
Read the news and be aware of any data breaches that may have taken place on social media or email platforms that you use, along with any other retailers or companies that you may conduct business with. Indeed, this data is used every day for stealing your identity. As a result, being aware of data breaches is a great way to prevent identity theft. And, if you do find that a data breach has taken place, you may need to change your passwords or cancel and reorder new cards.
Do not give out sensitive information over the phone.
Your bank or credit union will never call you to ask for your account numbers, passwords, or PINs. If you are ever in doubt of the legitimacy of a call, hang up and call the organization back at a confirmed phone number.
Look out for charity scams.
These scams have become especially prevalent during COVID-19, as fraudsters prey off of the goodwill of others looking to help out during this time. If you receive a solicitation to donate to a nonprofit, always check sites like Charity Navigator or CharityWatch to confirm the legitimacy of the organization. Once you’ve done your homework, if you decide to donate to the organization, visit the official confirmed website or call their phone number instead of donating directly through an emailed link. Indeed, being on the look out for scams is a goes a long way in preventing identity theft.
Create smart passwords
When creating passwords, be sure to include a combination of letters (capital and lowercase), numbers and special characters so that your accounts are more difficult to hack. Some security professionals suggest using a passphrase rather than just a word itself, something that you can easily remember but will be harder for scammers to track down. Do not use the same passwords across all platforms. If you are having trouble remembering your passwords, there are encrypted password vault apps that you can use to safely store password information.
Be wary of communications from the IRS
The IRS will never initiate contact with you by email, text message, or social media. So, if you do receive any suspicious messages, to prevent identity theft, you should report these to the IRS.
Email Safety Tips
As scammers become more sophisticated, so too have their fraudulent emails. Below are a few red flags to be on the look out for preventing identity theft.
Know the warning signs for phishing scams.
When you receive an email asking for personal information or prompting you for a log-in, always check the “to” line to make sure the email is actually coming from the domain that it claims. You can also preview the links before clicking them. You may also be able to identify a phishing email if it has a lot of typos or grammatical errors, as legitimate companies tend to proofread their emails before sending them out. If you receive an email you believe to be a phishing scam, always consider it might be an identity theft scam, so simply go ahead and delete it.
Be careful when clicking links in emails.
If an email appears to be from a site that you frequent, such as Netflix, and it gives you a link to log in, visit the actual Netflix website instead of on your own and log in directly from there. Clicking a link from an email may cause you to unknowingly share information, such as usernames and passwords. And, hackers can then use this to access your accounts, steal credit card numbers, and more.
Look out for urgent messages.
Scammers often try to create a sense of urgency, whether through email or by phone, to get people to act quickly. They may try to convince you that a certain deal may not last long, or they might appeal to your sense of fear by stating that you may get into trouble if you don’t provide certain information or money. Be mindful of these urgent messages, and when in doubt, call the confirmed phone number for the company directly to determine the legitimacy of the messages.
Consider using more than one email address.
Some security professionals recommend having more than one email address to serve different purposes. One of those email addresses may focus on personal and secure matters, such as important accounts, while the other might focus on more external use at retailers and for social media sites.
Card Safety Tips
Specifically when dealing with credit and debit cards, there are several easy ways to keep your information safe.Keep your PIN safe. Do not give your PIN to anyone, and when using an ATM, conceal your PIN if anyone is standing nearby. In addition, do not write your PIN on any of your cards.
Watch out for skimming devices.
When inserting your credit or debit card in an ATM or at the gas pump, keep an eye out for any wobbly parts of the machine, as this may indicate that a skimming device has been placed. When in doubt, use credit rather than debit at the gas station or go inside to pay with an actual employee.
Do not swipe your card.
With EMV chip technology now available, vendors should no longer ask you to swipe your card. Chip and contactless technology both provide an added layer of security, so if a vendor asks you to swipe your card, take your business elsewhere if possible.
Be careful at the ATMs.
Once you receive your money from the ATM, do not visibly display or count the money. Instead, put that money away immediately and count it later. If you are visiting a drive-up ATM, keep your passenger windows rolled up and all doors locked. At night, you may want to bring another person with you, but be sure to remain in a well-lit area for added safety and security.
Only shop on secure websites.
When shopping online, make sure the website has that secure https: address before providing any personal information.
Enroll in fraud alerts from your financial institution or credit card company.
Most financial institutions and credit card companies offer some form of free fraud alerts that will help alert you to any suspicious activity taking place on your account. While this does not replace the importance of personally checking your account transactions and balances daily, it is a helpful added resource.
In addition to these common scams, the Federal Trade Commission (FTC) has created a “Scam Bingo” card that you can view and share with others on social media to increase awareness.
Child Identity Theft
Child identity theft has become a greater threat in recent years, with more than 1 million children affected in 2017. The perpetrators of child identity theft are typically relatives or friends of the child’s parents, who steal the Social Security Number of the child and use it to open accounts or new credit.
You may not know that your child is a victim of identity theft until you run into issues getting your child a driver’s license, opening a checking account or applying for a student loan.
After your child turns 13
Once your child turns 13, you should be able to pull his or her credit through AnnualCreditReport.com. It’s important to make sure that no accounts have been opened in your child’s name. After your children become teenagers, you should make a habit of pulling their credit reports annually.
A good rule of thumb is to place a freeze on your child’s credit so that no inquiries can be made until you have decided to unfreeze their credit. To do this, you will need to contact each of the three credit bureaus to place that freeze. This is free to do, and can be quickly unfrozen when needed.
What should I do if my identity is stolen?
Identity theft can take a major toll but is preventable, and you can mitigate the effects if you are vigilant and act quickly. Here are a few steps you should take:
Change login information and passwords for your accounts.
The sooner your information is changed, the better you can prevent any potential identity theft and mitigate any damage.
Place a fraud alert on your credit reports.
A fraud alert is a free service that alerts lenders to the fact that you have been a victim of identity theft. To set this up, you can contact any one of the three credit bureaus. That reporting agency in turn must notify the other two, and each bureau will send you written confirmation that the fraud alert has been placed. Your fraud alert will last for one year, but you have the option to renew after that.
Order your credit reports
Visit AnnualCreditReport.com to order your credit reports from all three bureaus for free. Review your credit report and prevent identity theft by fixing any mistakes that may pop up by calling companies with affected accounts. You may need to follow up with a letter or written proof if you have it. Make sure that all information in your credit report is about you and that you recognize all accounts listed.
Create an identity theft report with the Federal Trade Commission (FTC)
The identity theft report can be found at IdentityTheft.gov and will require you to give as much information as you can about the case. The report will prove to businesses and lenders that you have been a victim of identity theft. You can file this complaint online or over the phone, based on your preference. The site will also create an Identity Theft plan for you. Once you have filed this report, you can bring the affidavit to file a police report as well. Be sure to get a copy of the police report or at least the number to refer back to later.
Place a freeze on your credit with all three bureaus.
If you are not planning on applying for new credit in the near future, this is a great option to prevent anyone from being able to pull your credit and open accounts in your name. Indeed, checking all three credit reports is a great idea if you’re wondering how to prevent identity theft.
Close new accounts opened in your name.
You may need to provide the identity theft report that you created with the FTC. You will also want to remove any fraudulent charges from your own accounts by contacting the businesses affected. Once those charges are removed or the account gets closed, be sure to get a confirmation letter from those businesses to ensure that you are not responsible for anything the identity thief may have done in your name.
Final thoughts on how to prevent identity theft
Identity theft has experienced an uptick during COVID-19 and is often on the rise in times of uncertainty, so it is important to be aware and keep an eye out for signs of fraud. With these tips in mind, you will be better prepared to protect yourself against common scams and other forms of identity theft, ultimately keeping your information safe and secure.
For more strategies for fraud prevention and how to prevent identity theft, visit Addition Financial’s Security Center for ways to safeguard your information. Alternatively, you can check out Episode 3 of our podcast, Making It Count, for your guide to preventing identity theft and fraud during a pandemic.