The Federal Trade Commission (FTC) estimates that as many as 9 million Americans become victims of identity theft every year. The crime ranges in form and severity, from nabbing a credit card to stealing a Social Security number. While some thefts can be corrected within a couple days, others can take months or even years to sort out, wreaking havoc on your personal finances in the meantime. Thieves are getting smarter and leveraging the latest technologies to take advantage of unsuspecting or good-natured individuals. Awareness is crucial. The more you know about identity theft and fraud, the better you can prevent it.
We’ve compiled six steps you can take to help keep your personal finances secure:
Manage Paper Documentation
All tax, banking and other financial documentation should be stored in a secure location where roommates or visitors do not have access. It’s also important to keep documentation organized by type and date. Older documents should be shredded prior to throwing out. View this financial records timeline to see how long you should hold onto financial records.
Protect Electronic Transactions
Many financial transactions are conducted online these days. Be sure you only manage online finances over a secure Internet connection – not a public wi-fi or unsecured network in your home. Thieves can tap into unsecure networks and view information transmitted online. You should also password-protect access to your computer, and utilize anti-virus and anti-spyware software.
Create Unique Passwords
We use short, alphanumeric passwords to access all types of personal data, from social networks like Facebook to our cable bills. It’s important not to use the same password on each account, or use passwords that can be easily guessed by outsiders like a child’s name, birthday, anniversary or last four digits of your Social Security number. The most effective passwords contain a combination of upper and lower case letters, plus numbers and symbols.
Verify Personal Data Requests
Only supply personal data – like bank accounts, pins and Social Security numbers – to organizations and individuals you know and trust. Be very skeptical of e-mails and websites that solicit personal data. There are many fake sites that look similar to those of real banks, utilities, etc. If you are unsure why your data is being requested by a particular organization, call customer service to verify if the information is needed, and why.
Clean Out Your Wallet
It can be very easy to misplace your wallet, and you never know who may find it. Don’t keep your Social Security card or pin number in your wallet. It’s also unnecessary to carry multiple credit cards that aren’t used on a regular basis. If you have a credit card reserved for emergencies, store it in a secure location at home.
Monitor Financial Data
Review your financial statements on a regular basis so you can quickly identify any unexpected charges. Also keep track of which bills arrive at which times of the months. Missing bills can be a sign of identity theft as well. In addition, check the accuracy of your credit reports at least once a year. You can obtain a free credit report annually from each of the three major credit bureaus at www.AnnualCreditReport.com or by calling 1 (877) 322-8228.
If you believe you are a victim of identity theft, place a 90-day fraud alert on your credit report with each credit bureau:
- Experian: 1 (888) 397-3742
- TransUnion: 1 (800) 680-7289
- Equifax: 1 (800) 525-6285
You will be able to obtain a free copy your credit reports. The FTC advises you notify the fraud departments of each company where an account was opened without your notification. You may also need to close accounts or file a police report. To learn more, view these detailed identity theft recovery steps on the FTC website.