Identity Theft – First Steps

One of the largest data breaches in US history occurred in April of 2024. A major hacking group has reportedly leaked 2.7 billion records, including Social Security numbers, addresses and more sensitive information. This information found it’s way to the ‘dark web’, eventually available to criminals and scammers. 

If you pay attention to the news over the past several years, you will know that data breaches are numerous, within many organizations. Bluefin, a security company listed many of the biggest data breaches in 2024. 2024 Data Breach Report Online

Are there steps one can take to help mitigate one’s exposure to identity theft or the potential exposure?

 What steps should one take to make your finances less vulnerable?   After all, the only motive for stealing personal information is fraud.

Credit Freezing

There is a simple process that could be an easy first step, it is called ‘Credit Freezing’.

Freezing your credit accounts is one essential step in protecting your finances, especially in an era where data breaches and identity theft are common. 

A credit freeze limits access to your credit reports, making it harder for identity thieves to open accounts or take out loans in your name. While this step is vital, it should be accompanied by other security measures to ensure comprehensive financial protection.

In the U.S., there are three major credit bureaus where you can freeze your credit:

1. Equifax
2. Experian
3. TransUnion

Each of the major credit bureaus—Equifax, Experian, and TransUnion—maintains comprehensive records of your credit history. This includes details about your payment behavior, outstanding debts, and the types of accounts you hold.

 By freezing your credit with all three agencies, you can effectively prevent new creditors from accessing these reports, which significantly reduces the risk of fraudulent accounts being opened in your name.

When your credit is frozen, if someone attempts to open an account in your name, the lender will be unable to access your credit report when they check for eligibility. Without that critical information, they’ll typically deny the loan application, preventing fraud before it starts.

Requesting a credit freeze is straightforward. You can do so online or by phone by contacting each bureau directly. After verifying your identity, they will place a “freeze” on your account. If you need to lift the “freeze”, either temporarily or permanently—such as when applying for a loan or a new credit card—you can do so with minimal hassle.

It’s important to note the difference between a credit freeze and a fraud alert. A credit freeze completely restricts access to your credit report, while a fraud alert still allows creditors to view your report, but it prompts them to verify your identity before proceeding with any new accounts.

I personally went through the process of freezing our accounts online with these three agencies. It was remarkably simple and quickly completed within minutes. The interfaces were user-friendly, making the entire process transparent and easy to manage. None of these agencies attempt to hide this process – quite the opposite.

Freezing your credit is just one aspect of a broader financial safety strategy.

Here are other steps you should take to ensure maximum protection:

Smartphones, Home Computers, and Social Media

Taking control of your personal and family data is crucial in today’s digital world. Be mindful of what information is stored and accessible on your smartphone, which is essentially a small computer; forget the phone part.

 Key questions to consider include: Are my devices secure? Do I store financial details on my phone? Are my passwords automatically saved and easily accessible? How much personal information do I share on social media?

 Lastly, are you fully aware of how much personal data companies like Apple, Google and Microsoft have access? Do you know the difference between a browser and a search engine, and why should you care. 

 We will cover this topic in later articles, but for now, be vigilant in these areas and spend time understanding your digital environment. 

Monitor Your Credit Regularly 

 Even with a credit freeze, it’s important to regularly monitor your credit reports for unauthorized activity. You can request free credit reports annually from each bureau at Annual Credit Report .

 Monitoring helps you detect signs of identity theft early, such as unknown accounts or credit inquiries.

Use Strong Passwords and Two-Factor Authentication

 Cybersecurity is crucial in protecting your finances. Use strong, unique passwords for financial accounts and enable two-factor authentication (2FA) whenever possible. 2FA adds an extra layer of protection by requiring a second form of verification, such as a code sent to your phone, before granting access.

Shred Financial Documents

 Physical security is just as important as digital security. Shred any financial documents you no longer need, such as bank statements, credit card offers, and tax returns. Identity thieves can use discarded documents to steal your personal information and commit fraud. Most UPS Stores have a shredding service on location.

Monitor Bank and Credit Card Accounts Regularly  

 Regularly check your bank and credit card statements for unauthorized transactions. Some thieves may start with small, easily overlooked purchases to test whether they can use your card before making larger charges.

Set Up Alerts for Unusual Activity

 Many banks and credit card companies allow you to set up alerts for unusual activity, such as charges made outside of your normal spending patterns or transactions above a certain dollar amount. These alerts can help you quickly detect and report fraudulent activity.

Companies like Norton and LifeLock may be worth your time to investigate their alert mechanisms and overall online security. There are others. 

Be Cautious with Public Wi-Fi

Avoid accessing financial accounts over public Wi-Fi networks, as they are often insecure and vulnerable to hacking. If you must use public Wi-Fi, consider using a Virtual Private Network (VPN) to encrypt your connection and protect your data.

A layered approach that combines credit freezing, monitoring, strong online security, and vigilance in checking financial statements is the best way to safeguard your financial well-being.

In closing, freezing your credit accounts with Equifax, Experian, and TransUnion is a crucial and easy first step in protecting your finances, especially from identity theft. 

This process should be part of a comprehensive financial protection strategy that includes monitoring your credit, using strong passwords, setting up account alerts, and being cautious with both physical and digital financial information. 

By taking these steps, you can significantly reduce your risk of financial fraud and protect your assets.