Ways to Protect Yourself From Identity Theft
Even though you may not think about it daily, identity theft is a threat that is always lurking. The best way to protect yourself from identity theft is to understand the different types of identity theft and how they can affect you. Here’s what you need to know to keep your identity safe.
- The costs of identity protection
- The bottom line
Types of identity theft
An account takeover is when one of your accounts is compromised, allowing someone else to take control of the account without your permission. The person who has gained access to your account can then make transactions using the account as if they were you.
How to stay safe
As annoying as it can be, there’s a reason why many websites ask you to create strong passwords and/or enroll in two-factor authentication. To protect yourself against account takeover fraud, you should ensure that your password is not easy to guess. It’s also advisable to diversify your passwords, meaning you don’t use the same one for every account you own. You can also opt-in to two-factor authentication to make your account safer.
Debit or credit card fraud
Similarly, if someone gains access to your credit or debit card, it could cause serious damage to your finances and even your credit. This type of fraud isn’t only a threat if your wallet is stolen. If someone else has your card number, PIN, and/or security code, they can make fraudulent purchases using your bank or credit card account.
How to stay safe
The best thing you can do is be vigilant. If you notice that your credit or debit card is missing, you should call the issuer of your card (your bank or credit card company) immediately to let them know so they can freeze the account. You should also do this if you notice unauthorized transactions in your debit/credit card history or statements.
Check your financial information and credit card statements regularly to ensure that no purchases not made by you were charged. If you spot suspicious activity, many financial institutions provide coverage for fraudulent activity and will reimburse you for the unwanted charges. If your bank or credit card offers fraud alert services, turn on notifications to alert you in real-time on your mobile device that will allow you to shut off your bank account or perform a credit freeze to prevent further charges.
Other actions you can take include:
- When entering your card information to make an online purchase, make sure that you’re using a secure website.
- Never save your personal information on computers or networks that aren’t yours.
Social security number identity theft
Your social security number just might be the most valuable information that an identity thief could get their hands on. If someone catches wind of your social security number, they can most likely find other personal information about you. This is an issue because an identity thief could use this information to open fraudulent accounts in your name. By doing this, they’ll be able to rack up debts in your name without you knowing it because you won’t be aware of any of these fraudulent accounts. Having your social security number stolen and used for these fraudulent activities could damage your credit report and credit score.
How to stay safe
First off, you should be sure to keep your social security card in a safe place, such as a safe in your home. You should also keep any other documents that contain your social security card in a safe place. If you discard documents with your social security number or other personal information on them, you should be sure to shred those documents before throwing them away.
It’s also a good idea to regularly check your credit reports. If you don’t recognize an account that is listed on your credit report, contact that creditor to inquire about the account. The creditor should be able to help you identify whether the account is fraudulent.
Mortgage or home title fraud
Your home and your mortgage can also be vulnerable to identity theft. If someone is able to find out your mortgage account number in addition to your social security number, they may be able to take out a second mortgage or home equity line of credit. They would then be able to take off with the money without you even knowing that something happened.
If your personal information has been stolen, someone may also be able to transfer the ownership of your property title. By doing this, they would be able to use your home equity to get loans and/or lines of credit.
How to stay safe
Keep an eye on your mortgage account. If you notice strange activity or an application that you didn’t put in, contact your mortgage lender for assistance. Another cause for concern is if you suddenly stop receiving important house-related bills, such as your mortgage or tax bill. If you’re worried that you may be a victim of home title fraud, you can check your home information with your county deed’s office.
Internet identity theft
In today’s ever-connected world, there are plenty of opportunities for identity thieves to exploit security flaws in your devices and gain access to your personal information. Many of your online shopping, for example, requires you to enter sensitive information that, if in the wrong hands, can be used to steal credit card and financial account information. If someone is able to access your personal information this way, they can use it to perform a variety of fraudulent activities.
How to stay safe
Although it’s convenient to use public Wi-Fi, you’ll want to be careful about connecting to unfamiliar or unsecured networks, especially if you’re performing sensitive tasks such as mobile banking or entering personal data. Using a virtual private network (VPN) can help keep you safe by creating a firewall when you are on public accessed connections You should ensure that your home Wi-Fi network is secure and that all of your devices are connected to it, not some other random network. It’s also important to stay vigilant by reviewing your credit report, as well, to ensure no one has opened fraudulent accounts in your name.
What can I do if someone has stolen my identity?
We live in a world where identity theft is so commonplace the federal government has a site dedicated to assisting you in the event of identity theft. IdentityTheft.gov explains your rights, which include:
- creating an FTC Identity Theft Report
- placing a 1-year fraud alert on your credit report and a 7-year extended fraud alert on your credit report
- obtaining free copies of your credit report
- having fraudulent information removed from your credit report
- stopping creditors and debt collectors from reporting fraudulent accounts
- stopping a debt collector from contacting you
If you are the victim of identity theft create an identity theft report with the Federal Trade Commission (FTC).
How much am I liable for if someone fraudulently takes out debts in my name?
According to IdentityTheft.gov:
- "Under most state laws, you’re not responsible for any debt incurred on fraudulent new accounts opened in your name without your permission.
- If someone makes unauthorized debits to your bank or credit union account using your debit card number (not your card), you aren’t responsible – if you report the problem within 60 days after they send your account statement showing the unauthorized debits.
- Most state laws limit your liability for fraudulent checks issued on your bank or credit union account if you notify the bank or credit union promptly."
Where you can pay is if your card is lost or stolen and you don't report it. If you report the loss to the credit card company before your credit card is used by a thief, you aren’t responsible for any unauthorized charges. But you can face a maximum of $50 within 2 business days after you learn about the loss or theft. If it is more than 2 business days after you learn about the loss or theft, but less than 60 calendar days after your statement is sent to you, you can be responsible for up to $500. After 60 days, you could be held responsible for the charges. This is another reason to stay vigilant and watch your financial information closely.
Identity theft protection tools
Because identity theft during the pandemic was increased, the credit bureaus, Equifax, Transunion, and Experian, are offering monthly credit reports for free through April 2021 so you can keep an eye out on ID theft. To obtain a free copy of your credit report, visit www.AnnualCreditReport.com. After April, you are allowed one free credit report annually with each credit bureau.
If you’re short on time or want to take extra precautions, you may want to consider purchasing identity theft protection tools. These tools may be able to help alert you to any potential fraudulent activities, as well as assist you if you become a victim of identity theft.
Experian IdentityWorks offers 2 plans — Plus and Premium. Both plans include surveillance of the dark web for your personal information, as well as access to a U.S.-based fraud resolution specialist and identity theft insurance. Experian CreditLock is included in both plans as well, offering access to your Experian credit file as well as real-time alerts on attempted credit inquiries. Both plans offer a free 30-day trial, after which you’ll be billed $19.99/month.
LifeLock is an identity protection company that offers a few different levels of coverage. Each plan includes services such as dark web monitoring, data breach notifications, and stolen wallet protection. It also includes support from a U.S.-based identity restoration specialist if you become a victim of identity theft. You’ll also get device security benefits, including secure VPN, anonymous browsing, and an ad-tracker blocker.
LifeLock plans include the million-dollar protection package, which includes monetary coverage for stolen funds reimbursement, personal expense compensation, and coverage for lawyers and experts.
The costs of identity protection
While some identity protection services do cost money, you also have to consider the cost of becoming a victim of identity theft. Becoming a victim of identity theft can drain your bank account, severely damage your credit, and could even become a threat to your homeownership status. Monetary costs aside, dealing with the aftermath of this can take up a significant portion of your time and mental energy.
If you’re the type of person who wants to keep everything in the same place and running on autopilot, then purchasing a plan from an identity protection company might be the right option for you. Most companies offer options for individuals and families, as well as plans with different levels of financial coverage. You can choose the option that best fits your needs. You may also want to see if a company offers a free trial and if it offers discounts if you pay for one year in full.
If you’d rather save your money, you could also monitor your information yourself. Websites like Credit Karma offer free credit monitoring, which can give you notifications to significant changes to your credit report.
Pros and cons of paying for identity theft protection
Is it really worth paying for identity theft protection services when you can do some of it for free? Here are some things to consider.
You get more protection
By purchasing an identity theft protection plan, you’ll get other services in addition to access to your credit reports, such as dark web monitoring.
Identity theft insurance
Most of the top identity theft protection companies offer identity theft insurance in their plans. If you do end up becoming a victim of identity theft, this can help you get back on your feet and manage while you work to restore your identity.
There’s no guarantee
Just because you’re paying for identity theft protection, that doesn’t mean that you won’t become a victim of identity theft.
It may not cover everything
Identity theft protection companies might miss some smaller forms of identity theft, such as if someone applies for a job using your name or uses your information to make a relatively small purchase. It’s also important to review the fine print when purchasing any of these plans, as the identity theft insurance and reimbursement included may not cover every situation of financial loss.
The bottom line
It’s important to be on alert and protect your identity, especially in today’s digital era. Fortunately, there are easy ways to be proactive in protecting your personal information, such as shredding unneeded materials that contain your personal information.
There are also services and products that you can purchase to help you protect yourself from identity theft and the effects of identity theft. These products can go beyond routine monitoring of your own accounts and provide a cushion if you become a victim of identity theft. However, as great as they can be, you need to be alert even when purchasing these forms of protection to ensure that you’re getting the type of coverage that you need.