Protecting Yourself from Identity Theft
A little effort now can save you massive headaches in the future
They’re the words on a letter none of us want to receive but most of us unfortunately have or will during our lifetimes, “You are receiving this notification because we have determined that during a recent breach of our systems, your personal information, including your name, Social Security number, date and place of birth, and credit card information may have been exposed.”
Useful Contact Information
FTC Identity Theft Website: www.identitytheft.gov
The unfortunate truth is that while modern technology and the cloud have brought many benefits and convenience to our lives, it has greatly increased your potential risk of having your identity stolen. In simpler times, safeguarding your own information with smart steps such as shredding any private information before putting it in the trash, was enough to protect you. While that is still an important step to take, the risk today is more of the hacker sitting thousands of miles away on their computer rather than someone going through your trash and pulling out your financial statements.
In 2015, 15.4 million consumers were victims of identity theft or fraud, and the numbers have only increased each year, costing consumers more than $16 billion dollars. Some of you attended our Identity Theft seminar last year and heard a number of steps you can take to protect yourself. In light of the recent data breach at Equifax and calls from clients asking what they should be doing, we thought it would be timely to provide some sound advice on how you can protect yourself.
Assume your information is compromised
The recent Equifax breach exposed information for 143 million people, nearly half the U.S. population and including essentially anyone who has ever had a mortgage, cell phone plan, or credit card in their name. Even if you were lucky enough to escape it, you should assume elsewhere, your information has been compromised and take steps to protect yourself.
1. Review your credit report. Everyone can receive one free copy of their report once per year from each credit reporting agency. You can get your free report online at www.AnnualCreditReport.com, or by calling 1-877-322-8228. Review your report carefully and make sure you recognize any accounts opened in your name.
2. Reduce your information footprint. This won’t help you for data breaches that have already happened, but take some simple actions to reduce the physical information that is out there. This includes shredding mail and other private documents you no longer need, and switching to online statements at your financial institutions to eliminate paper statements and the risk of them falling in the wrong person’s hands. When throwing out old computers, remove and destroy the hard drive. Simply deleting your files is not sufficient and a skilled hacker can recover that information.
How Long Would It Take to Crack Your Password?
8 lower-case letters
8 upper/lower-case letters
16 lower-case letters
16 upper/lower-case letters
Time to Crack
189 Million years
12 Trillion Years
3. Create challenging passwords. One common misconception is that complexity of the password is more important than the length, leading to passwords such as “GoHok1es!”. Instead, create a much longer password using a phrase such as “MyDogLovesTheHokies.” In addition to being harder for a hacker to crack, it will be easier to remember.
If you go to http://howsecureismypassword.net you can type in any phrase, and it will estimate how long it would take someone to crack that if it were your password. According to that site, it would take 1 week for someone to crack “GoHok1es!”, but 318 trillion years to crack the second password. It should go without saying that you should try to have different passwords for different websites and keep them in a secure place if you need to write them down.
4. Consider a credit freeze or fraud alert. A credit freeze is one of the more drastic steps you can take, but in exchange for a bit of inconvenience, you can prevent anyone from doing credit inquiries on you which should prevent any thieves from opening up false accounts in your name. The downside is that it will also prevent you from opening up any accounts yourself unless you remove the freeze on your credit which can include anything from getting a new cell phone subscription to financing a new car. Therefore, you should not implement a credit freeze if you are planning a new account or financed purchase in the near future. The credit agencies charge a fee whenever you lock and unlock your credit, though after public outrage, Equifax has agreed to temporarily waive that fee in the wake of their own data breach.
If you do want to implement the freeze, calling each of the three agencies at the numbers listed on the first page is the easiest method. When you do so, they will give you a pin number which you need whenever you unfreeze your account. It is very important that you write down this PIN and keep it in a safe place or else you will face significant challenges in unlocking your account and proving your identity to them.
Alternatively, you can place a 30-day fraud alert for free by filling out an online form at each of the agency’s websites. This does not prevent you, or others, from opening accounts, but it raises a red flag to any company doing a credit check that you may have recently been a victim of fraud and they should take extra precautions when opening a new account.
5. Subscribe to a credit monitoring service. There are a number of them out there, and they’re all generally doing the same thing. Depending on your credit card, you may already have access to credit monitoring for free or an additional monthly fee. Look for one which provides some sort of protection such as a dollar coverage to help restore your identity and negotiate with financial institutions in the event that someone does steal your identity and fraudulently opens accounts. Most of these monitoring services provide between $100,000 to $1,000,000 of such protection depending on how much you’re willing to pay each month. Most of these services also let you view your credit report on a monthly basis included in the subscription fee. You should take advantage of that to monitor your credit on an ongoing basis.
Data breaches are a frustrating unavoidable part of modern life. Just as you take prudent steps to safeguard your financial assets, you must also protect your information assets. Following some of these suggestions can be the first step towards protecting yourself against fraud and identity theft. Remember, we are always just a phone call away if you have questions or would like to discuss how you can improve your financial life, including safeguarding your personal information.
Sources: CNBC. Feb 1, 2017. “Identity theft, fraud cost consumers more than $16 billion.” https://www.cnbc.com/2017/02/01/consumers-lost-more-than-16b-to-fraud-and-identity-theft-last-year.html
Securities and/or Advisory Services offered through Geneos Wealth Management, member SIPC/FINRA. Plott & French Financial Advisors is not affiliated with Geneos Wealth Management.