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We all appreciate the ease and efficiency that modern technology brings - whether it's online shopping, mobile banking or accessing services at the tap of a screen. However, with these conveniences comes a significant downside: the growing threat of identity theft.
According to the Federal Trade Commission (FTC), nearly 400,000 people have their identities stolen each year. October is Identity Theft Awareness Month, making it a timely opportunity to learn how to protect everything you’ve worked so hard for.
Identity theft is an umbrella term for crimes that involve the wrongful use of another person’s personal information, usually for financial gain. One of the most common forms of identity theft occurs when someone steals your credit card information to make unauthorized purchases. In some cases, thieves go further by changing the mailing address on your account so that you remain unaware of fraudulent charges. Others may open new credit cards or take out loans in your name without your knowledge.
Bank accounts are also a frequent target. Criminals might use stolen debit card information or produce counterfeit checks to drain your account. They may open entirely new bank accounts using your name and then write bad checks from those accounts. While financial damage is often the primary goal, identity theft can extend beyond money. Using your personal data, someone could gain access to your wireless services or, in extreme situations, create fraudulent identification that is later used during interactions with law enforcement.
The methods criminals use to obtain your personal information range from simple to sophisticated. A thief might glance over your shoulder at an ATM or during a transaction to capture your information. Some sift through trash - a tactic known as “dumpster diving” - to find discarded documents containing sensitive data. More advanced schemes include “skimming,” where devices are placed on ATMs or gas pumps to capture the data from your card’s magnetic strip.
Email scams, known as phishing, are another common tactic. These scams often involve a message that appears to come from your bank or credit card company, warning of an issue with your account. The message prompts you to click a link, which takes you to a fake website designed to collect your login credentials and other personal information.
Phone scams, also known as pretexting, involve callers who pretend to be someone you know or trust in an attempt to get you to reveal private data. In one recent example, someone called my parents pretending to be their grandson, claiming to be in trouble. When asked for his name, the caller refused to answer, confirming their suspicion that it was a scam.
Old-fashioned theft, such as stealing a wallet or purse, is still a threat as well.
Fortunately, there are several proactive steps you can take to reduce your risk. One of the most important precautions is safeguarding your Social Security number. Avoid carrying it with you and never print it on your checks. Only provide it when absolutely necessary and in situations you initiate yourself, such as opening a bank account or applying for credit.
If a merchant insists on using your Social Security number as a condition of doing business, ask to use an alternate form of identification like a driver’s license. If they refuse, consider walking away.
Another important measure is managing your financial accounts wisely. Use strong, unique passwords and PINs for each account. Avoid reusing login credentials across platforms. It’s also a good idea to limit the number of credit and debit cards you carry. Keep copies of the front and back of each card stored securely at home, in case they are lost or stolen. Refrain from sharing your credit card information over the phone unless you initiated the call yourself. Make it a habit to close accounts you no longer use and review your bank and credit card statements regularly to catch any unusual activity early.
Staying informed about your financial health is essential. Checking your credit report at least once a year through a trusted source like AnnualCreditReport.com can help you spot issues before they escalate. If you do become a victim of identity theft, act immediately. Con-tact your financial institutions to freeze or close compromised accounts, file a report with the Federal Trade Commission at ftc.gov and consider placing a fraud alert or credit freeze on your credit file to prevent further damage.
While no one is completely immune to identity theft, being aware of the risks and taking common-sense precautions can significantly reduce your chances of becoming a victim. In an increasingly digital world, a few small steps today can protect your financial future tomorrow.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
Advisory services offered through Beacon Pointe Advisors LLC, an Investment Adviser registered with the U.S. Securities and Exchange Commission.
