Protecting Your Identity in a “Mega-Breach” World
The following article was written by my business partner, Jon Beyrer, CFP, EA. With the announcement a few weeks ago by Anthem Blue Cross, and a disclosure recently that Lenovo has been pre-installing malware on computers they sold, it seems we are going to have to become much more vigilant about our personal information.
Anthem Blue Cross announced recently that it had been hacked, and that 80 million of its customers’ private information was stolen by hackers. This has a lot of people worried about protecting their identity, and rightfully so. The latest in a string of high profile “mega-breaches” (The Home Depot and Target breaches are other recent examples), this one is particularly important because of the type of information that was stolen: Social Security numbers, identification numbers, employment and income data, etc. Armed with this information, a thief can readily take over a person’s identity and do really bad things, such as filing false tax returns (in order to steal tax refunds), applying for credit cards, withdrawing from bank accounts or committing medical fraud.
So how can you protect your identity when your private information is no longer private? While there’s no perfect single solution, here are some tips for protecting yourself to the best degree possible.
Put a “Freeze” on Your Credit
Placing a “Freeze” on your credit effectively restricts anyone’s access to your credit information. For example, it makes it much more difficult for a thief to open a new credit card in your name. Of course, this works both ways; it’s also more difficult for you to open a new charge account or obtain a loan. This is a great protection measure to take. It’s easy and inexpensive to do, and you can have it lifted if you want to open the access up for, say a mortgage refinance. For more information about placing a freeze on your credit, see the Federal Trade Commission’s website: http://www.consumer.ftc.gov/articles/0497-credit-freeze-faqs
Monitor Your Credit, Statements and Accounts
Monitoring your credit, benefit statements and accounts for suspicious activity is more important than ever. Inspect your credit report regularly for items that shouldn’t be there. They could have been opened by an identity thief. This will include credit cards or loans that you don’t recognize. Placing a freeze on your credit should make this far less likely, but it’s still possible. You can access your credit reports for free once per year, per repository by visiting www.annualcreditreport.com.
Credit monitoring services are available as well, and there are different levels of monitoring, alerts and notification, with varying costs. (Anthem is providing its customers with two years of identity theft repair and credit monitoring services free of charge). You should also inspect your account activity for suspicious withdrawals, and watch out for notifications from your bank, brokerage, creditors and the IRS. (Note: Notifications by anything other than the postal service should be viewed with suspicion. Criminals often use e-mail and phone to try to trick you into revealing personal information.)
Protect Your Information
Protecting your information is one of the best things you can do to prevent identity theft. This covers a number of areas:
• Protecting your computer & devices (See our article, Financial Fraud Is On the Rise)
• Protecting your passwords and communications (See our article, Internet and Password Security)
• Protecting paper records – This includes shredding documents with private information.
Be Prepared for a Theft
There’s only so much you can do to prevent identity theft, but you can be prepared if an incident does happen. Federal laws give you rights that allow you to dispute fraudulent items, which should help mitigate things like fraudulent credit or purchases. Bank and brokerage accounts have protections in the event of fraud as well. Insurance can be an important tool for reimbursing you for financial losses, and Identity Theft Insurance is available. However, it may not be necessary if it only covers you for things are already covered by your financial institutions, property/casualty insurance, or credit remediation coverage provided in credit monitoring services.
If your identity is stolen, acting quickly is the key to limiting the damage. The Federal Trade Commission’s Theft website http://www.consumer.ftc.gov/topics/privacy-identity recommends these immediate steps:
• File a fraud alert on your credit report.
• Notify your bank, investment custodian, credit card companies and insurance companies
• Create an Identity Theft Report and file a police report
Beware of Scams!
Fraudsters use tricks and scams to separate victims from their money. The best defense is to be vigilant, and treat with suspicion any e-mail, phone, mail or in person solicitation that asks for your information. Anything that requires you to pay money in order to receive some benefit, like Irish or Canadian Sweepstakes winnings, or avoid something negative (get your distant relative out of Lebanese prison) is almost certainly a scam. For more, read our blog article, “Avoid these common Financial Scams.”
For more information about how you can protect your identity, or if you think you have been the victim of identity theft, please contact us.
This column is prepared by Jon Beyrer, CFP®, EA, and Rick Brooks, CFA, CFP®. Jon is Vice President, Wealth Management and Rick is Vice President for Investment Management with Blankinship & Foster, LLC, a wealth advisory firm specializing in comprehensive financial planning and investment management. Rick can be reached at (858) 755-5166, or by email at brooks@bfadvisers.com. Rick and his family live in Mission Hills.
Category: Local News
