By Amanda Thomas, MS, CFP®
In light of the recent Equifax security breach, our clients are even more aware of the risks to their credit, liquid assets, and their identity. Many clients have reached out to me as their advisor, asking for ideas on protecting their identity.
I have been the unfortunate victim of identity theft twice in the past 18 months, and therefore have hands-on experience on how to protect yourself now as well as after your identity has been compromised. Here are my top 10 tips:
1. Have a credit monitoring system in place. This not only notifies you of anyone inquiring on your credit, but also alerts you if someone uses your Social Security number to open up a bank account, or most anywhere else where your Social Security number is required.
2. If you are not needing to apply for credit in the near future, freeze your credit bureau reports at Equifax, Experian, and TransUnion. If you do need to open up credit, you can authorize that one company to look at your credit, but not allow other companies to do so. A security freeze will prevent fraudsters from opening a checking account using any information they may have stolen. In the case that they try to use such information, your credit report will return a notice stating that they must contact the credit bureau to proceed with the application.
3. Pull your credit report annually at annualcreditreport.com. Look at any past inquiries if they appear suspicious, and just as important look for any irregular or incorrect addresses or phone numbers under your personal info section. Fraudsters can enter this data and then use that to open up fraudulent accounts and have billing statements sent to the old or incorrect address. By the time you get a collection notice of past due bills, the fraudster is long gone, having charged up to the maximum on that store credit line.
4. Tax returns. Fraudsters can attempt to file a tax return in your name and obtain a refund. They typically do this early in the year, like January or February, before you would typically be filing your return. If you think this is a risk, you can have your CPA file an IRS Form 14039, or the “Identity Theft Affidavit”. This notifies the IRS of possible identity theft and then requires you to have a PIN generated that must be used upon filing your return.
5. Email addresses. Fraudsters have many ways to tap into your credit or information. After my laptop was stolen recently, I found that someone had been using my email address on their Expedia account. The fraudsters can hack into your email address, then change the password on any of your online accounts, and if you have a credit card still attached to that online account, the fraudsters can charge their own expenses on it.
6. Medical fraud. This is ramping up; it is when someone has your personal info and then attempts to charge their own medical expenses under your name at your doctor or pharmacy. Review your medical bills carefully.
7. Home title. Fraudsters can attempt to transfer title to your home into someone else’s name. Then they obtain home equity lines of credit and proceed to take advances on it in cash. In speaking with a local title company, if you have obtained title insurance in the past 10 years on your home, it most likely is covered for title fraud via an “Eagle” endorsement.
8. Set up electronic alerts. Put electronic “alerts” on your bank account and credit cards that send you texts or emails of any withdrawals over a certain dollar amount. This will alert you if someone is fraudulently using your account number to withdraw funds.
9. Set up other alerts. You can contact the DMV, Federal Trade Commission (identitytheft.gov) and the Social Security Administration, and they can put alerts under your name should someone try to obtain a license or other identification under your name.
10. Guard your info carefully. Place a hold on your mail when on vacation, don’t put outgoing mail in your mailbox, install firewalls and virus-detection software on your computer, shred receipts, credit offers and account statements to prevent “dumpster diving”, create complex passwords that identity thieves cannot guess easily, and change your passwords if a company that you do business with has a breach of its database.
MS, CFP®, CDFA™
About the Author
Amanda has over 30 years of financial experience. Prior to joining Mission Wealth in 2006, Amanda spent 11 years as a Vice President in Private Banking at Northern Trust Bank in Santa Barbara, working with high net worth clients and their banking, investment, and trust needs.