Identity theft is one of the most widespread and problematic crimes in the United States. No one is safe, not even the IRS. Agencies, like the FBI, are devoting a large amount of resources to fight against it. During last year's tax season -- and again in 2015 -- record numbers of fraudulent returns were filed and the IRS unknowingly paid tens of millions of dollars to criminals posing as legitimate taxpayers.
Identity theft can happen to anyone and at any time. It can occur when you travel overseas, when you use a credit card at your most frequented gas station or restaurant, or even when you make a purchase online. Your identity can even be stolen while you are in the comfort of your own home connecting with family and friends on social media platforms like Facebook. Identity theft does not discriminate and you need to take steps to protect yourself from it.
Here are five strategies to keep your personal and financial identity secure so that you don't become another identity theft statistic.
Use Protective Credit Card Technologies
If you're still carrying the same card you've had for a year or so, you may be due for an upgrade. Most banks are now offering plastic that is supported by computer chip versus magnetic strip technology as America transitions to chip-enabled credit cards. The cards using this new computer chip technology are much less susceptible to theft through hacking, whereas cards using the magnetic strip technology are vulnerable to criminals who can copy and steal the personal account information stored on the magnetic strip using Wi-Fi devices and other means.
There are also card companies, like Citi, that offer a free service that lets cardholders use temporary card numbers for a more secure online shopping experience. A temporary card number can be created that's only valid for a specific purchase or for a limited time frame; after which the temporary card number will no longer work. Even if someone managed to steal it, the temporary account information would no longer be connected to your account or any of your personal data.
Keep Your Personal Data Private and Confidential
The head of security for VISA said that understanding customer behavior was one of the biggest security challenges for credit card companies trying to protect their consumers. Despite attempts to protect against identity theft, customers routinely -- and sometimes unknowingly -- give away personal information. Examples of this kind of behavior include posting your address and other personal information online, posting photographs that include your driver's license or credit card info, or sharing your social security number.
Criminals can use online social networks to figure out your pet's name, which may also be the answer to a security question. They can also learn when you will be away from home, giving them a chance to steal credit card statements or applications from your mailbox. If you are entering a PIN number at an ATM terminal or retail location, make sure that nobody is standing around who can look over your shoulder and easily see it. Be alert to your surroundings and take notice of anything that may seem tampered with; it could be a skimming device. Always password protect your gadgets and remember that every time you pull out your credit card someone may be watching.
Handle Paperwork Differently
Most people do not consider junk mail a security vulnerability either. However, every year identities are stolen because people discard mail from credit card companies and banks without shredding it. Some consumers begin to take the right steps by cutting up these documents, but forget the second step; disposing of those pieces in separate trash cans.
Identity thieves actively troll for these valuable pieces of information by digging through trash cans in neighborhoods, office buildings, universities, and even the post office. The solution is to get into the habit of shredding anything and everything that may contain personal information about you or your finances, including junk mail.
Use the Right Plastic for Purchases
Many consumers are also not aware that using a credit card instead of a debit card can make a huge difference in terms of personal identity protection. Instead of using credit cards, for example, lots of Americans prefer to use their debit card because they can avoid getting into debt and paying interest. The problem is, however, that unless you check your bank account balances and transactions every day, you have no way of knowing if someone is fraudulently using your card. Debit cards are tied directly to checking accounts, so if someone steals your card, the thief can potentially gain access to all of your cash.
Credit cards, on the other hand, have more protocols in place to monitor and detect suspicious activity. Your card company can cancel your credit card and issue a new one immediately if there is a potential identity theft problem. Credit cards are also regulated differently than debit cards, holding them more accountable for fraudulent charges. When shopping in public places like grocery stores, gas stations, and restaurants, use credit instead of debit.
Create an Identity Theft Response Plan
It's always a possibility that your identity theft protection measures could fail. Therefore, everyone should have a response plan in place so that you can react quickly and help minimize the damage should an incident occur. If you lose your wallet in a taxi or leave your credit card behind at a bar in a foreign country, you need to know what to do and who to contact. Here are some things you should consider for your response plan:
If traveling overseas, make photocopies of your credit cards and keep them in a safe place, such as a bank safe deposit box, or give them to a trusted friend or family member. You should also notify your bank and credit card company before you travel.
Know how to contact the three major credit reporting agencies: Experian, Equifax, and TransUnion.
Know how to contact your local law enforcement.
Create a list of contact information for all your credit cards.
Maintain a list of all online accounts so you can quickly change all passwords.
Understand if any of your credit cards come with account protections, such as the Discover it's Freeze It feature, which instantly makes your card unusable.
For more information on identity theft and how to protect yourself, visit the websites of official agencies such as The Consumer Financial Protection Bureau or your state's office of the Attorney General. Those websites have lots of free and valuable information about how to protect your identity, respond to identity theft, or restore your identity if it has been compromised.
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