Friday, 9 November 2018

By now, most Americans are familiar with the term "identity theft," and are aware of the serious and costly toll of having personal and financial information stolen.

Even though the financial services sector has waged an all-out war against identity theft and consumers are more aware than ever, more than 15 million Americans were victims of identity theft fraud in 2016, according to a study by Javelin Research & Strategy. This is a record number of annual cases, and a 16 percent increase since the organization began tracking identity theft in 2003.

To put those numbers into more tangible terms, Americans now lose more money through identity theft annually than from burglaries. So, just as you'd take steps to protect yourself from burglaries, it makes sense to take precautions to protect yourself from identity theft. Here are some tips and information to help.

What is identity theft?

Identity theft is a broad term referring to the act of having your personal or financial information stolen by criminals who then use the information to access bank accounts, open credit cards, make purchases, and commit a variety of other financial crimes.

Here are the most common forms of identity theft:

  • Stealing credit card information. Typically hackers steal this information electronically, and consumers can be totally unaware of these breaches and often are incapable of preventing them. Keep a close eye on your credit card transactions and notify the card issuer as soon as you see a charge you don't recognize. In most cases, the credit card issuing company will stop payment on fraudulent charges — if notified prior to payment — and issue the consumer a new credit card. Typically, shutting down the compromised card puts an end to the problem.
  • New account fraud. A thief uses personal information to set up a bank or credit card account in the victim's name. According to idtheftcenter.org, this type of fraud is increasing rapidly due to security breaches, mostly in 2015, that exposed more than 165 million Social Security numbers.

How can you protect yourself from identity theft?

Identity thieves don't need a lot of information to do financial damage. In many cases, your name, age, address and Social Security number will do. Or, as mentioned previously, they could simply get a credit card number. The key is to be vigilant about protecting your information. Here are some suggestions:

  • Purchase a document shredder. It's smart to shred any documents with personal information prior to disposing of them. This includes items like credit card offers you receive in the mail, bank statements, medical statements, and essentially any bills or paperwork with your address and other information. If you have elderly parents, make sure they do the same.
  • Consider electronic options. For example, most banks offer electronic monthly statements free of charge. And most utility companies, retailers, and other credit providers offer online billing and payment. While no electronic system is 100 percent secure, reducing the amount of paper mail with sensitive information can help reduce your risk of mail theft, which can reduce your risk of identity theft.
  • Don't respond to email, text, or phone messages asking for sensitive information. Criminals have gotten extremely skilled at producing emails and messages that resemble legitimate correspondence from companies you do business with. In almost all cases, a legitimate request will direct you to the company's website where you can securely provide information. No legitimate company will ask you to provide information via email.
  • Be careful online. Of course, you know to use hard-to-guess passwords and to change them regularly. But also take care when using your laptop, tablet, or phone on free Wi-Fi networks. Avoid using sites that require passwords while using public Wi-Fi. Cyber criminals can create fake Wi-Fi portals to capture passwords and other information that they can then sell. And when banking or shopping online, always look for a green padlock icon in the address bar, which indicates a site is secure. Keep in mind that if the padlock icon is gray, the connection between your browser and the site is only partially encrypted and not secure.
  • Review your three credit reports. Identity theft can make a lasting negative impact on your credit score. With that in mind, it just makes sense to check all three of your reports annually. And it's free at annualcreditreport.com. When reviewing your reports, look for accounts you don't recognize or any other types of errors or questionable notations. If you notice something, report it immediately to the credit reporting bureau. The Federal Trade Commission has a comprehensive website to help lead you through the process.

  • What about large-scale data breaches?

    If you hear there has been a breach you believe might affect you, contact the company immediately. Depending on the specific situation, federal o state laws may require the company to notify you if you have been impacted. Most of the time, the company will already have procedures in place for consumers to check if they have been affected, report any problems, and get assistance with any issues. The Federal Trade Commission has some additional information on how to handle these instances.

    What about additional security products?

    Identity theft protection products and services to help you monitor your accounts can be valuable and convenient tools. But before you pay for an identity theft protection product or service, check with your bank and other companies you do business with to see what types of protections they provide for free. Then do some research, read reviews, and seek professional ratings.

    What steps should I take if I am a victim?

    If you think you are victim of identity theft or fraud, here are some steps to take: 

  • Notify your bank and creditors. Close any accounts that have been compromised and reopen them with new account numbers and passwords. Consider following up with an email or letter.
  • Change passwords to your email, bank accounts, credit card accounts, etc. 
  • Request copies of your credit report from the three major bureaus and review them for any additional fraudulent activity. Request a "fraud alert" for your file and add a victim's statement asking creditors to call you before opening new accounts or changing existing ones. Make sure all contact information is accurate. 
  • File a police report. Protect yourself from the unknown because there may be instances you missed or items (like credit cards or checks) you didn't realize were stolen. Be persistent even if the police advise against it and keep the case number and date in your records. 
  • Finally, document everything throughout the process (dates, names of those talked to, and times of conversations.)

The content provided is for informational purposes only. Neither BBVA Compass, nor any of its affiliates, is providing legal, tax, or investment advice. You should consult your legal, tax, or financial advisor about your personal situation. Opinions expressed are those of the author(s) and do not necessarily represent the opinions of BBVA Compass or any of its affiliates. Links to third party sites are provided for your convenience and do not constitute an endorsement. BBVA Compass does not provide, is not responsible for, and does not guarantee the products, services or overall content available at third party sites. These sites may not have the same privacy, security or accessibility standards.