Our parent company, PenFed Credit Union, put out a great post a while back on identity theft and, with the recent hacking attempts, it seemed relevant to re-blog it now.
Did you know that an estimated 17.6 million Americans—that’s 7% of U.S. residents age 16 and older—were victims of identity theft in 2014. That’s 17 million people whose credit cards were used fraudulently or had their personal information used to open new accounts. Having your credit card or identity stolen can make for a big financial headache—and make a mess of your credit until you fix it.
To sort things out, you must contact your financial institution to notify them about the fraud so they can review your account for possible fraudulent transactions and close the account. Also, they will initiate sending you a new card or debit card with a new account. This can be done usually by telephone. However, if your identity has been used to open new fraudulent accounts, the process can be more involved, requiring you to file a police report and dispute inaccurate data on your credit report. While you are not typically on the hook for fraudulent transactions, it can take time to sort out. You should keep a record (date, time, name of financial representative, summary of conversation) of each call to the financial institution.
Avoid stranger danger
But taking some common sense precautions can help you avoid identity theft in the first place. Here’s what you need to know to keep yourself safe from fraud:
- Never give passwords or personal information to strangers. Scammers calling your home or even emailing you can be very convincing. They may tell you they’re from the government or your financial institution, and warn of dire consequences if you don’t hand over your social security number, account numbers, or passwords. But no valid institution will ask for this information over the phone or by email—if someone contacts you asking for it, they’re trying to scam you. If you’re contacted by someone and are not sure if it’s legitimate, contact the institution directly to confirm.
- Keep your passwords secure. You want to use a strong password—at least 12 characters, including numbers, capital letters, and special characters—to make it hard for thieves to crack. On top of that, you should change your password regularly and never use the same password on multiple websites, which can mean that all of your accounts are compromised if a thief gets just one password. A password manager app on your computer or smartphone can help you keep track of your passwords without resorting to writing them down (which is certainly not secure). If it’s available, you should also use two factor authentication. Two factor authentication requires you to log on with both a password and a code that’s usually texted or emailed to you when you try to log on—and it will stop thieves in their tracks.
- Make sure your computer is secure. You should apply security updates to your computer and web browser when they’re available. Most apps can be set up to do this automatically, making it a no-hassle process. If you’re using a shared computer, be sure to log out of any accounts before you walk away, and never use a public computer to access banking or other sensitive information.
- Watch your wallet. It doesn’t matter how careful you are with your information if a thief steals your wallet. Always keep an eye on your wallet or purse. In case your wallet does go missing, don’t carry more personal information than you need to. Your social security card, rarely used credit cards, and written down passwords or Personal Identification Numbers (PINs) should never be kept in your wallet. Not carrying unnecessary personal information will help protect you even in case of theft.
- Keep your financial documents safe. If other people are in your home, like workmen or even roommates, keep your financial paperwork safely stored and locked up. And when you’re getting rid of bank statements—or even credit card offers you’ve received in the mail—shred them to be sure no one can use them to get your information.
- Monitor your financial statements. Even if you’re following all of these steps to stay safe, you may still find yourself the victim of fraud. The best way to catch it early is to check your financial accounts regularly: monitor statements from your financial institution and keep an eye on your credit report. If you see any transactions you didn’t make, report them immediately.
- Review your credit report, annually. Your credit report is essentially your financial report card. It’s important to know how to review it and make corrections, if needed—and know what you need to do if you should ever detect fraudulent activity. Federal law requires each credit reporting company to give you a free copy of your credit report once a year. You can request free copies of each of your credit reports from AnnualCreditReport.com.