Today, we’re talking about identity theft which means I’m going to try and condense a two-hour workshop into a few paragraphs so here goes…Right out of the gate, let’s make sure we’re using proper definitions. There’s identity theft and there’s actual theft. If someone steals your actual credit card/credit card number and heads off to BJ’s for diapers (a surprisingly common thing to do since diapers can be resold), under our current legal system, that isn’t identity theft, that’s actual theft. They stole your money. Now, let’s say that person “borrowed” your personal data, opened a new credit card and THEN went shopping for diapers at BJ’s—that’s identity theft. Does it make it any less traumatic to differentiate between the two? No, not in the slightest but it is good to know they are different things from a legal perspective.
If you are worried about someone stealing your identity, it’s both good and depressing to know that a common culprit is someone you know or lives (or works) with you. Account takeover fraud is one of the most prevalent types of fraud and one of the most preventable. Something as simple as using two-factor authentication when accessing any of your accounts goes a long way towards preventing fraudulent transactions (and it goes without saying that you really shouldn’t be doing any financial stuff from your phone—yup, I know that’s killing some of you but it’s a fact…). When was the last time you swept through your various services and changed your passwords? If you have those passwords automatically load when you enter a site, you should probably just go ahead and send the thief a Venmo now (another startling vulnerable system).
An increasing type of identity theft is medical identity theft where someone creates a duplicate persona then uses it (or more likely, sells it) to access medical care. Unfortunately, for our aging population, the more you use our medical system, the more likely this is to happen—sort of a double whammy of unpleasantness when you need that MRI only to discover that your insurance already paid for someone else’s MRI and effectively used up your sliver of available and affordable benefit. Of course, our inefficient healthcare system doesn’t help the situation with its sometimes-unfathomable billing practices but that’s a bigger fish than we can fry here. Suffice it to say, keeping track of your medical records (or your parents) goes a long way towards making sure you are on top of your exposure.
Two other common forms that we’re seeing more and more are tax-related identity theft (where someone files an early return using your Social Security number and claims a refund before you’ve even pulled all your records together) and government benefit (unemployment, etc.) identity theft. This is primarily based on all those identities that were stolen from the IRS and Equifax a number of years ago. Why, you might ask? These thieves were no dummies. They stole the information, sat on it for a few years until it became stale, then swooped in and bombarded the systems when they saw weakness.
So what can you do? Some simple things are:
1) Always select “credit” when you are using your debit card.
2) Learn to love your shredder (or drop your paperwork off here and use the commercial service we use here).
3) Have everything online? Make sure you pull down a hard copy at least annually so you have something to work from if you do have to deal with a theft issue.
4) Carve out a few moments and pull your full credit report. You are now entitled to free reports from each of the main agencies so head out to www.annualcreditreport.com and pull one of the reports then mark your calendar to repeat the process four months from now. Look through the report and make sure you recognize all of the addresses listed, the various lines of credit reported, and whether there is an “authorized signer” on any of the cards. Repeat the process for everyone in your family, including your youngsters – stealing/cloning a child’s identity is surprisingly popular since it is usually years before anyone discovers the issue.
Another strategy is to “freeze” your credit which can help to reduce your risk of identity theft, since potential new lenders can’t access your credit reports while the freeze is in place. Although, you should know that in doing so you might not be able to renew your health insurance if you use the NYS (or other state-based) Exchange or a government-based program, your property/casualty insurance premiums will probably increase since those companies pull their client’s credit scores when calculating insurance costs or making changes to a policy, and accessing the Social Security Administration’s system will be problematic if you don’t already have an account established.
Lastly, this month the Foundation for Women’s Financial Education is hosting a seminar on Identity Theft – a deep-dive into these new methods (including how AI is involved) and the steps to take if you do find things on your credit report that are not your own. Consider joining us on March 21st.