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In order to protect yourself from identity theft, you must first understand what it is. After that, you can prepare a proactive plan, so you can prevent identity thieves from stealing your personal data. The sad situation is, many Americans don’t take the matter seriously enough to take the necessary safeguards against identity theft.
In a study that Experian conducted, they found that only 28% of U.S. adults avail of a paid credit monitoring product to protect their identities, while only 13% use one to keep track of their credit and finances. What’s more, 81% left the responsibility to repulse identity theft to their banks and credit card companies alone.
What is Identity Theft?
Identity theft is any kind of deception, scam, or crime that a person commits in order to obtain personal data, including usernames, passwords, banking information, credit card numbers, Social Security Numbers and health information.
The thief then uses this information without the permission of the owner to commit fraud, deceive other people, extort money, or perpetrate other crimes.
According to the Federal Trade Commission, up to 9 million Americans fall victim to identity theft every year and hackers have compromised at least 534 million personal records since 2005 by attacking the databases of businesses, government agencies, institutions, and organizations. If you were to spread out these attacks evenly across the entire U.S. population of 310 million, every American, young and old alike, would have been a victim of identity theft one and two-thirds times.
To some, identity theft is just an annoying inconvenience. They think that it’s not such a big deal because they can easily resolve the problems they have caused, and they can restore their identities back in a flash.
However, for others, restoring your identity means spending hundreds, even thousands of dollars, working at it for months to resolve, doing some damage-control step for their reputation, lost job opportunities, rejection from lenders because of distorted credit scores. The police have even arrested some legitimate consumers and booked them for crimes that the identity thefts committed using their identities or accounts. In such cases, they must prove their innocence through the court.
How Do Thieves Steal Your Identity?
There are so many ways by which these thieves can steal your identity. They can use the old-fashioned ways, but equally effective methods, of stealing mail from your mailbox, rummage through your trash for bills and bank statements, stealing your wallet or purse, or cloning your credit card. These crooks can be anywhere – your neighbor, the jogger down the road, your restaurant waiter, the clerk at the motor shop, and even your relatives.
Lately, crooks have turned to more sophisticated methods using the Internet.
Unsuspecting consumers fall for tricks like phishing and confidences scams or downloading files that contain malware that steal information from their computers or smartphones, compromising their information by using non-secure wireless connections, using an ATM with a skimming device, or revealing their passwords to untrustworthy people.
Sometimes, they fall victims to identity theft because hackers are able to breach their information through massive hacking of companies, government, educational, and social media sites.
The Signs of Identity Theft
Recognizing these warning signs could help you prevent identity theft before they start or fully develop:
You don’t receive your household bills through the mail anymore
If you’ve stopped receiving bills in the mail, it could indicate that somebody had accessed your personal data and that identity theft could have already changed your billing address to gain access to your mail.
Lenders turn you down for a loan or credit
If you know you have a history of good credit but suddenly experiences rejection from a lender, an identity thief could be the reason why. He may have messed up your credit history without your knowledge. If you still got an approval for a loan or credit, but the lender gave you a higher rate, you might still want to check that you are not a victim of identity theft
Merchants bill you for things you didn’t buy
If you’re getting invoices for purchases you don’t remember, or the credit card issuers are billing you for overdue payments on accounts you do not own, that’s a sign that someone has committed I.D. fraud on your account
Your financial accounts have entries that appear fraudulent
Thieves may have breached your account if you notice that your bank, credit card, or other financial accounts are showing unauthorized or unfamiliar transactions
The IRS rejects your tax return
If you filed your tax return but the Internal Revenue Service rejected it, it could mean that somebody has fraudulently filed a return in your name. This is a sign that there is identity theft in progress
Test charges pop up in your credit card statement
Thieves normally try to “test” stolen credit cards by making small purchases of under $5.00. If these transactions push through, the fraudster knows that he can make larger purchases without fear that the card company will block the transaction.
How to Prevent Identity Theft
Here are some initial steps you can take to protect your personal information and prevent thieves from compromising your identity, credit, and financial accounts:
Place a Fraud Alert
You can contact any one of the three credit bureaus and request to place a fraud alert. You can choose from 2 types of fraud alerts. An initial fraud alert will require a lender to call you or take “reasonable steps” to get in touch with you and confirm if any new activity is valid. This will last for 90 days.
With a fraud alert in effect, financial services or data security breach companies will text or place a phone call to consumers if they suspect a security breach. Another red flag for them will be activities that are out-of-pattern with your habits or recent location such as a sudden surge in purchases of home appliances or out-of-state purchases.
Mix up Your Passwords
Identity thieves know that most people are lazy when it comes to assigning a different password for each of their devices and financial accounts. So, once they crack a single password, they would try that on the rest of your accounts. If you’re using the same password for all of them, it’s like you’ve given these thieves a master key for all your doors.
You can frustrate identity thieves from accessing your data just by mixing up passwords. Don’t use your name or your birthday in any password. Change your password regularly and anytime you suspect that someone has accessed or is trying to access your account.
Set Strong Passwords
The first line of protection against internet fraud and identity theft is a strong password. An average person currently has dozens of online accounts and each account needs a password to open. Many of these accounts are in sites that hold sensitive personal and financial information.
When creating personal passwords, don’t include information that is easy for thieves to guess or obtain like birthdates, addresses, names of your children, etc. It’s better to use nonsensical combinations of letters, numbers, and when the site permits, special characters. Avoid using identical passwords for your accounts and choose your usernames carefully. As much as possible, try to limit the information that you give out or store in internet accounts.
Enroll in Credit Monitoring
We don’t want you to put this in the top priority list just because you might have to pay a fee, but you can also use credit monitoring to detect identity theft.
If you shop around for the prices of some credit monitoring services and compare them with the cost of ordering your credit report, buying a few credit reports a year can be less expensive. Before you sign up for credit monitoring, compare the prices.
Be Aware of Email Phishing Attempts
Thieves resort to email phishing by sending you authentic-looking but bogus emails supposedly from banks, credit institutions, insurance companies, even the IRS.
If you receive an email that asks you to confirm your account information and/or passwords, do not respond. Delete it immediately. You can report these emails to the authorities. Or, you can classify the email as spam. By clicking “spam”, you will notify email providers to put the senders of emails like this in the spam filter.
So, the next time this person tries to send you or other people an email, their email will automatically land in the spam filter. This multiplies the number of accounts that can help prevent identity theft.
Install Anti-Virus and Anti-Malware Security
Another common way that scammers get to your account is through a virus or malware that infects your computer. By sending these files to your computer, they can track the sites you visit and the keystrokes you type in, recording your passwords as you use your computer.
To protect your files, don’t download any file whose source you don’t trust. Second, you need to put an anti-virus and anti-malware software on your computer. It is better if you can take it a step further and have your email providers scan everything for you first.
Avoid Suspicious Online Sweepstakes
The internet has become the playground of scammers and crooks. Watch out for online contests or promotions that offer you something for nothing. If it asks you to disclose your credit card number, social security number or any other private and secure identity information, think many times before you click.
Monitor Your Statements
By doing this, you can achieve two things. First, if you religiously keep track of your statements each month, you will know at once if one of them doesn’t arrive. That can alert you that perhaps someone took it from your mailbox or stole it while in transit.
Second, you can quickly check the entries on the statements. Charges, purchases or other entries that do not match your records is a cause for alarm and you can investigate immediately from your bank.
Analyze your credit report annually.
This is a standard precautionary measure, but you had to pay for it before, or lenders should first reject your loan application before you could get a free copy. Today, consumers can get a free look at their credit report once every year. The big three credit reporting agencies, namely Equifax, Experian TransUnion, made an agreement to make the credit reports available for free for consumers.
Watch Your Social Media Posts
As social media becomes part and parcel of everyday life, more and more information become available out there – even to people we really don’t know. One of the most practical ways to prevent identity theft is by not giving away too much personal information on social media. This way, you force scammers to work doubly hard to find information.
These are simple tips to protect your identity online. Above all, use your common sense. For example, if you receive an email from an address that looked like your friend’s, but it contained nothing else but a link, don’t open it. There are many more steps like this that can help you outsmart thieves, hackers, and fraudsters.
Protect Your Social Security Number
The Social Security Number has turned out to be what the government didn’t mean it for – the unofficial national identification number. Experts often suggest not to carry your Social Security ID in your wallet together with your driver’s license and other IDs. For one thing, the card’s material isn’t durable enough to hold up to wear and tear for an extended time.
More importantly, a resourceful thief can assume your identity if he can get your full name, address and Social Security Number (even just the last 4 digits). Never use your Social Security Number as a user name or password, not even a part of it. And never give it out to telephone solicitors or to reply to spam or phishing emails either.
Stick to Reputable Websites When Making Purchases
If you’re not familiar with the company you want to buy from, do some digging first. What kind of reviews do buyers give them? What is their rating from the Better Business Bureau? Are they using a secure, encrypted connection for personal and financial information?
Are they using hypertext transfer protocol Secure (HTTPS) and not just hypertext transfer protocol (HTTP)? This newer protocol provides more safety and privacy on a site, so it’s important to look for the “https” in a website’s URL, especially when you’re on the Check Out Page.
While prevention, they say, is worth a pound of cure, you may still fall victim to scammers. If you suspect that something is wrong, act immediately. Get in touch with your banks, all your financial institutions, credit card companies, and the three credit agencies we mentioned above.
Don’t forget to file a police report too. Preventing identity theft is everybody’s responsibility because every person’s personal information is always at risk. If you consider the kind of damage identity theft can cause to people, we should put preventing these thefts at a high priority.