How Can You Protect Yourself from Identity Theft Online?
Identity theft is any kind of deception, scam, or crime that results in the loss of personal data, including the loss of user names, passwords, banking information, credit card numbers, Social Security Numbers and health ID’s, that is then used without your permission to commit fraud and other crimes.
Up to 9 million Americans have their identities stolen each year according to the FTC1 , and at least 534 million personal records have been compromised since 2005 through attacks on the data bases of businesses, government bodies, institutions, and organizations2. If those breaches were spread evenly across the U.S. population of 310 million, everyone would have had their identities stolen one and two-thirds times.
For some consumers, identity theft is an annoying inconvenience and they can quickly resolve their problems and restore their identity. For others recovering their identity can cost hundreds, even thousands of dollars, take months to resolve, cause tremendous damage to their reputation.
This cause them to lose job opportunities, even influence the rejection of loan applications for school, homes or cars because would-be employers or loan companies see the damage on your credit scores. Some consumers have even been arrested for crimes committed by someone using their identities and have had to prove that they were not guilty.
How are identities stolen?
Consumers become victims of identity theft through many types of exploits. These can happen the old fashioned ways when crooks (including family members!) steal mail from your mailbox, rummage through your trash for bills and bank statements, steal wallets and purses, or make an extra copy of your credit card – perhaps when your waiter or clerk walks off to process your payment.
Online identity theft occurs when users fall for tactics like phishing and confidence scams; or download malware onto their computers or smartphones that steals their information; use wireless networks that are insecure; take out money from an ATM that has been rigged with a skimming device that collections your information; share their passwords with untrustworthy people, or by having their information stolen when data records are breached on companies, government, and educational sites.
Picking the Right Service Before you spring for identity theft protection, which, at a minimum, is likely to set you back at least $150 a year, consider the no-cost measures you can take to protect yourself. Remember, despite the hype, the odds of having your identity swiped are actually quite low. And no identity theft protection is bulletproof, so consider these factors before you buy.
First, decide whether you’d like to purchase the services of a dedicated identity theft protection firm or one of the products offered by your bank or insurer. Many banks now offer customers daily credit checks that alert them to fishy activity in their accounts.
Identity Theft & Credit Card Fraud – How to Protect Yourself
Some will also provide insurance to repay lost wages or legal fees incurred as a result of identity theft or fraud. Other plans assign you a caseworker to help restore your credit. You can also try to bundle identity theft insurance with your home or auto coverage. Be wary of this kind of insurance, however — these policies can be riddled with exclusions that may prevent you from ever collecting in the event of theft.
Then there are the specialty companies—LifeLock and TrustedID are two of the most prominent—that well known as identity theft protection experts. These companies offer a mix of preventive and reactive tools to maintain your identity and credit, the most common being fraud alerts and credit freezes.
Fraud alerts. Some identity-theft protectors will immediately place fraud alerts on your files with the three main credit bureaus, whether you’ve been victimized or not. In essence, it forces any bank or credit agency to balk before approving credit requests in your name. It’s not foolproof, though. The law only requires the creditor to take reasonable precautions before extending credit. This may only be a speed bump for a practiced thief, so don’t consider it a guarantee that your identity won’t be swiped.
Credit freezes. Freezes are far more effective than alerts. Icing your files prevents any company from accessing your credit unless you already do business with them, effectively sealing your records against any new creditor. Freezes can be a pain if you’re seeking a mortgage or student loan—or any form of credit. You’ll have to contact the bureaus to unfreeze your records, which can take up to three days. Plus, the credit bureaus normally charge a small fee whenever you freeze and unfreeze your files. Credit freeze rules vary by state.
Alerts and freezes are two measures you can take yourself, so consider whether you want to pay a company to do it for you.
If you’ve detected fraudulent activity, notify the financial institution where the fraudulent activity occurred first so they can freeze your account. Depending on the situation, you’ll need to file a complaint with the FTC and your local police department, as well as investigate all of your other accounts. And keep a vigilant eye on that credit report. This is were specialty companies— LifeLock can help you take all the massive work out from you and solve them professionally.
7 Main steps to preventing identity theft online:
- Protect your computer and smartphone with strong, up-to-date security software. If your computer or phone is infected with malicious software, other safeguards are of little help because you’ve given the criminals the key to all your online actions. Also be sure that any operating system updates are installed.
- Learn to spot spam and scams. Though some phishing scams are easy to identify, other phishing attempts in email, IM, on social networking sites, or websites can look very legitimate. The only way to never fall for phishing scam is to never click on a link that has been sent to you. For example, if the email says it’s from your bank and has all the right logos and knows your name, it may be from your bank – or it may not be. Instead of using the link provided, find the website yourself using a search engine. This way you will know you landed on the legitimate site and not some mocked up fake site.
- Use strong passwords. Weak passwords are an identity thief’s dream – especially if you use the same password everywhere. Once the thief knows your password, they can log you’re your financial accounts and wreak havoc. You need passwords that are long (over 10 characters), strong (use upper and lower case letters, numbers and symbols), and that have nothing to do with your personal information (like name, age, birthdate, pet)
- Monitor your credit scores. By law you have the right to three free credit reports per year; from Experian, Transunion, and Equifax.These three credit bureaus work together through a website called AnnualCreditReport.com so you can quest all three reports at once in one of the following ways: Go to the Web site. Through this highly secure site, you can instantly see and print your credit report.Note: Remember that after you request a report, you will have to wait a year to get it free of charge again from the same credit reporting company. (Of course you can pay for a copy of your credit report at any time.)
- Review your credit score. Look too see if there are new credit cards, loans or other transactions on your account that you are not aware of. If there are, take immediate steps to have these terminated and investigated.
- Freeze your credit. Criminals use stolen ID’s to open new lines of credit. You can thwart their efforts to use your identity by simply locking (called freezing) your credit so that no new credit can be given without additional information and controls. Many states have laws giving you the right to a free credit freeze, but even where states don’t provide legal mandates, the large credit bureaus provide a voluntary security freeze program at a very low cost.
- Stay alert.Watch for common signs of identity theft like:
False information on your credit reports, including your Social Security number, address(es), name or employer’s name.
Missing bills or other mail. If your bills don’t arrive, or come late, contact your creditors. A missing bill may indicate that an ID thief has hijacked your account and changed your billing address to help hide the crime.
Getting new credit cards sent to you that you didn’t apply for.
Having a credit approval denied or being subjected to high interest rates for no apparent reason.
To determine whether there are any costs associated with placing a security freeze on your credit, and for temporarily lifting that credit freeze when you do seek credit, see State Freeze Requirements and Fees.
Only use reputable websites when making purchases – These security tips can easily be find on LifeLock . If you don’t know the reputation of a company that you want to purchase from, do your homework. How are they reviewed by other users? Do they have a strong rating with the Better Business Bureau? Do they use a secure, encrypted connection for personal and financial information? (You should see an Https in a website’s URL whenever they ask for personal or financial information).
Receiving calls or notices about past due bills for products or services you didn’t buy.
Consistently applying these eight steps to both defend and monitor your credit score will reduce the risks of having your identity stolen, and alert you instantly if such a problem arises.