By Eric Reich
It’s important to talk about identity theft and discuss the ways that thieves get your information, what they do with it, and how to protect yourself. Unfortunately, many people don’t know what the real risk factors are vs. the perceived ones.
In order to steal your identity, a criminal needs any three components of your ID such as name, date of birth, address, social security number, driver’s license or passport number, passwords, etc. With any three of these pieces of information, a criminal could gain access to any number of potentially damaging things.
A common misconception about identity theft is that it happens from shopping online. If you are shopping on a secure site with good encryption, it is less likely to happen. A much bigger concern is the use of an unsecured Wi-Fi network since criminals have the ability to intercept passwords over it. Any financial transaction should not be made over free Wi-Fi at the local coffee shop but rather at your home over a secure network.
Shopping online and unsecure Wi-Fi aren’t the only threats. The mishandling of your credit card or credit report is another one. A credit report contains a wealth of information about you that a thief could use to harm you financially. The same goes for your credit card. A server in a restaurant could use a skimmer in the back room to read your card or they could simply write down the card numbers along with the expiration date and CVV number. Skimmers can also be used at ATMs or gas station pumps. Ideally, your card should never leave your sight. However, in reality, most people are not going to follow their server to the credit card machine every time they go out to dinner. It’s just a reminder to be mindful of the businesses that you use your credit card at and to be wary of some ATMs.
So why do criminals want your information? Credit card use is a big area of fraud, but an even bigger reason is to file a fake tax return using your social security number to obtain a refund. Then when you go to file your return, the IRS rejects it since “you” already filed. While the IRS reported in 2018 a 40 percent decrease in stolen tax identities between 2016 and 2017 filings largely due to security initiatives they put in place, there are still thousands of taxpayers who are victims of tax identity theft. On average, restoration can take up to six months or even longer for more complex cases.
So, how do you protect yourself?
- As I mentioned, don’t make financial transactions or transmit sensitive data over unsecured Wi-Fi networks.
- Do not share your full date of birth or even your home address on social media sites.
- Make sure you run good antivirus and anti-malware software.
- Use multifactor authentication whenever possible.
- Use a strong password that is at least 12 digits long. Passwords should be a combination of capitalized and uncapitalized letters, numbers, and symbols. Do not use identifiable information like your date of birth or generic passwords like 1234.
- Do not dispose of financial documents or mail with sensitive information without shredding them first.
- Recognize and avoid phishing emails, threatening calls and texts from thieves posing as legitimate organizations such as your bank, credit card companies and even the IRS.
- Do not click on links or download attachments from unknown or suspicious emails.
- Password-protect your phone. There is a lot of personal information stored in there.
If you are a victim of identity theft or fraud, you should report it to authorities as soon as possible. File a complaint at identitytheft.gov, contact one of the three major credit bureaus to place a “fraud alert” on your credit records and alert all of your financial institutions. If your SSN is compromised and you know or suspect you are a victim of tax-related identity theft, the IRS recommends responding immediately to any notice you receive and calling the number provided.
Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. Reich Asset Management, LLC is not affiliated with Kestra IS or Kestra AS. The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra Investment Services, LLC or Kestra Advisory Services, LLC. This is for general information only and is not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney, or tax advisor with regard to your individual situation. To view form CRS visit https://bit.ly/KF-Disclosures.
Eric is President and founder of Reich Asset Management, LLC. He relies on his 25 years of experience to help clients have an enjoyable retirement. He is a
Certified Financial Planner™ and Certified Investment Management AnalystSM (CIMA®) and has earned his Chartered Life Underwriter® (CLU®) and Chartered Financial Consultant® (ChFC®) designations. A lifelong resident of Cape May County, Eric resides in Seaville, NJ with his wife Chrissy and their sons ,CJ and Cooper, and daughter Riley.
