Modern Guide on How to Protect Yourself from Identity Theft

Last Updated on September 21, 2023

Identity theft occurs when thieves get personal or financial data by fraud or deception to achieve financial gain. Unfortunately, once criminals have this information, they can rapidly gain access to your finances, often with devastating effects. 

A perpetrator of identity theft can transfer money from your bank account, take out a credit card in your name, or even obtain medical care using your health insurance. 

Criminals can use various offline and online methods to steal your information. However, you can follow some expert tips to reduce the risk of falling victim to an identity theft fraudster.

Use and Strengthen Your Password Protections

Most people are familiar with using a PIN code to access their bank account, but some keep financial information on their digital devices without password protection. ID thieves could pick up your phone and view sensitive information in seconds, but this is less likely if you use a password or access code. 

It’s also essential to use different passwords for your various devices and accounts. If you use the same password for everything, an ID fraudster who learns one code suddenly can access all your personal and financial information. If you have trouble remembering all your passwords, you can use a password manager app, such as LastPass or 1Password.

Avoid using easy-to-guess passwords such as your birthday or your name. It’s good practice to use a combination of lower and uppercase letters, numbers, and special characters to make it as difficult as possible for a criminal to crack the code. You could also use a password phrase, such as I Love My Kids 100%, including the spaces, which is not only long enough to deter most password hackers but also meets most character requirements. 

Don’t Respond to Suspicious Offers

If offers sound too good to be true, they probably are. ID fraudsters can easily get a list of email addresses and bombard the recipient with correspondence offers to wire money if they provide bank details. 

Reputable financial institutions never ask you to provide sensitive information over an insecure network like the Internet, so any email approach is almost certainly an attempt at committing identity theft. 

This scam is also a ploy that can work over the phone, and you should never provide your personal or financial information to anyone you don’t know. If a caller says they are from your bank, hang up and contact your bank to verify the information

Protect Your Paper Documents

One of the essential considerations when determining how to protect yourself from identity theft is offline paper files. If you keep documents containing personal or financial details in your home or office, it’s crucial to keep them out of sight in a secure location. You can use a lockable drawer or cabinet to make it more challenging for an ID thief to access the details and ensure that only trusted family or colleagues possess a key.

When you dispose of documentation, you need to ensure a thief doesn’t remove them from the trash. You can purchase a shredder to cut the paper into tiny pieces or burn the documents in a fire. There are also ID theft protection stamps that you can roll over personal information to make it impossible to read.

You should also stop companies from sending you unsolicited financial offers. ID fraudsters can steal pre-approved credit offers from your mailbox, order a credit card, and watch your home to pick up the delivery. The ID fraudster can then run up a bill in your name before you know what is happening. 

If companies do not have your authorization to continue to send offers, there is less chance an ID thief can open accounts in your name.

Organize Your Wallet

It’s essential to make it as challenging as possible for an ID fraudster to benefit if they come into possession of some of your financial information. Don’t carry all your credit and bank cards in the same wallet, and make sure there are no pieces of paper containing passwords alongside your cards. 

It’s best not to carry your Social Security card in your wallet. This information makes it much easier for an ID thief to access your financial accounts and medical insurance records.

Monitor Your Accounts

With online banking, it’s easier than ever to monitor your account activity. Sign up for online access to all your financial accounts and check them at least weekly to increase the chances of noticing any suspicious activity. An ID thief may believe if they only remove small amounts of money regularly, you may not notice the transactions.

If you examine your accounts and note any payments you don’t remember authorizing, you can contact the financial institutions and ask them for more details. 

Check Your Credit Files

You can sign up to companies such as Experian and Equifax which collate and hold your credit file. If you see information you don’t recognize, such as a credit card you don’t own, contact the companies and report that you may be a victim of identity theft

You are eligible to receive a free report from each of the three major credit bureaus annually, but you can also have unlimited access using paid plans. It may be worth the extra investment to have daily access to your credit file to reduce the risk of an ID thief benefiting from your details for an extended period.

Establish Fraud Alerts

You can ask financial services and data security companies to contact you if they suspect you are a victim of identity theft. Institutions may notice transactions that are not within your usual spending patterns or identify a payment made in another country. 

Companies can respond to suspicious activity rapidly by sending you a text message or an email. These institutions never ask for personal information online or by text, so if you receive an alert that asks you for passwords, your name, or your address, this could be an identity theft attempt.

React Quickly

If you become aware you are the victim of identity theft or an identity theft attempt, it’s vital to alert the relevant financial institutions immediately. Change all your passwords and close any compromised accounts. Check all your financial statements to ensure the damage is limited to as few of your credit cards and bank accounts as possible.

Identity Theft Safety

Keeping up-to-date with new concepts on how to protect yourself from identity theft is challenging with the fast-moving developments in online financial transactions. However, taking a few straightforward precautions such as using secure passwords, regularly checking financial accounts, and shredding paper documents are crucial steps to limit your exposure to identity theft and fraud.

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