Cybersecurity is one of the biggest challenges of modern times. Identity theft is one of the outcomes that you want to avoid. It can be a huge drain on time and money. No time is better than now to update your passwords and check your credit reports. Recent news on the theft of personal information seem to get worse and worse, and it may be the tip of the iceberg. With over 140 million people affected by the breach at Equifax, odds are good that you or someone you know is someone where their name, address, birthday, Social Security and driver’s license numbers may have been exposed. There have been other breaches of varying degrees at government institutions such as the SEC and Office of Personnel Management, and other companies such as Anthem, JP Morgan Chase, Target and Yahoo.
Identity theft can do as much if not more damage to your personal finances than a market correction. At least history shows that investments tend to bounce back over time. A stolen debit card may result in someone drawing money from your bank account. A stolen identity can mean thieves opening accounts as you and running credit card balances in your name. Identity theft can cost you money that you may recover, but lost of countless hours that you won’t recover.
Use Strong Passwords
There are several simple things to protect yourself from identity theft. First, update your passwords and make this a regular practice. Use passwords that are difficult to guess. They should be lengthy and contain special characters and numbers. Try creating a unique phrase that few would guess. I use a password manager to help me keep track of all my passwords, which are not easy to remember and are different for every website. Personally, I have been satisfied using Lastpass as my password manager. It took me a couple of days to get used to it. Click here for the Wirecutter’s review of password managers. Wirecutter’s favorites include Lastpass, 1Password and Dashlane.
Setup Account Monitors and Alerts
Second, monitor your financial accounts and get alerts for transactions on your accounts. I use eMoney, the personal financial management tool that I mentioned last month. It simplifies the process to watch all our accounts. I have made eMoney available for free to everyone that works with Candent. eMoney will also help you get organized and enable you to see progress towards your investment goals. It can send you alerts about changes to your account balances. I also use a more granular approach. I signed up to receive alerts from my bank and credit card companies. In my experience, this service has been always free. I get alerts for transactions and changes to my account balance. Yes, I may be extreme. Did I say I take this very seriously?
Take Control Over Your Credit Reports
Third, sign up for services to track your credit report and for a security freeze with the credit reporting agencies. The three big ones are Equifax, Transunion, and Experian. Click here for the Federal Trade Commission’s webpage for free credit reports. For a security freeze on your credit report, you will need to contact the three credit agencies directly. A freeze limits the ability of someone to pull your credit information. It is not foolproof, but it is better than nothing. At the very least, you made it harder for someone to steal your identity.
Be Careful With Your Personal Information
Fourth, be more mindful of personal information that you share with someone. You may be surprised by how much information about your is already out there. If you think about it, what you give for the convenience or enjoyment you get in using many of the apps on your phone, for example, is your personal information that gets used for advertising. Just think, advertising is one of the more legitimate uses.
Be on Alert of Scams
Fifth, be aware of phone scams and otherwise. Don’t give out your personal information over the phone or some website unless you are confident that the person on the other side is trustworthy. I would not respond when a caller says they are from the IRS, Medicare, some credit card company, etc. Instead, I ask for the caller’s name and a reference number for the call so I could follow-up by calling a number that I believe is valid. Moreover, the IRS and Medicare have the policy to send letters regarding information, not to call people. Click here for an IRS post on how to spot a suspicious call and here for more alerts from the National Council on Aging. Other popular phone scams include those from callers seeking help to retrieve money or some asset. Some callers prey on the elderly by posing as grandchildren seeking financial assistance from grandparents.
There are more things you can do to protect yourself. I will save those for a later note. You are always welcome to contact me if you want to discuss what these ideas.
