Protecting Yourself with Identity Theft Protection

In today’s digital age, safeguarding your personal and financial information is more critical than ever. Identity theft has become a common threat that can have serious consequences for both individuals and families. By implementing key strategies for identity theft protection, you can better defend yourself and your loved ones from cyber criminals. 

Why Identity Theft Protection is Important

According to recent reports, identity theft affected over 5.5 million people in the U.S. in 2023, leading to billions in financial losses*. In fact, the total financial loss due to identity theft and fraud reached $8.9 billion in 2022, highlighting the serious financial consequences individuals and families face**. For families and individuals, taking proactive steps is crucial to preventing such threats before they occur. Whether you’re managing online banking, shopping, or accessing your health records, having a robust identity theft protection plan is vital.

Additionally, if you’re concerned about the overall security of your family’s finances, you may want to explore family financial planning strategies. These plans not only help manage wealth but also offer proactive steps to secure your family’s future.

* Federal Trade Commission. (2023). Consumer Sentinel Network Data Book 2023. Available at: https://www.ftc.gov

**Federal Trade Commission (FTC). (2023). Consumer Sentinel Network Data Book 2022. Available at: https://www.ftc.gov/reports/consumer-sentinel-network-data-book-2022

Common Types of Identity Theft

Understanding the different types of identity theft can help you better protect yourself. Here are the most common forms: 

• Financial Identity Theft: When someone uses your personal information, such as your Social Security number or credit card details, to make purchases or apply for loans. 
• Medical Identity Theft: When thieves use your health insurance information to get medical services, prescriptions, or treatments. 
• Tax Identity Theft: Criminals may file false tax returns under your name to receive a refund. 
• Child Identity Theft: A growing concern, child identity theft occurs when a child’s Social Security number is used for fraud, often going unnoticed for years. 

Top Strategies for Identity Theft Protection

1. Monitor Your Financial Accounts Regularly: Consistently reviewing your financial accounts can help you quickly spot unauthorized transactions. Most banks and credit card companies offer alert services that notify you of suspicious activity. Setting up these alerts is one of the easiest ways to enhance your identity theft protection.
2. Use Strong, Unique Passwords: Make sure your passwords are complex and unique for every account. Using a password manager can help you securely store and manage your passwords without needing to remember them all. Avoid using common passwords like “password123” and update them regularly.
3. Be Aware of Phishing Scams: Cybercriminals often use phishing emails or text messages to trick individuals into revealing sensitive information. According to the Federal Trade Commission (FTC), phishing scams are one of the leading methods of identity theft. If you receive a suspicious email, do not click on any links or download attachments. Instead, verify the sender’s identity through official channels. 
4. Protect Your Personal Information Online: Limit the personal information you share on social media platforms. Scammers can piece together details about your life, such as your birthdate or pet’s name, and use them to answer security questions or steal your identity. Ensure your social media accounts have privacy settings enabled. 
5. Freeze Your Credit if Necessary: If you’re not planning to apply for new credit soon, freezing your credit report is an effective way to prevent identity theft. This action restricts access to your credit report, making it more difficult for criminals to open accounts in your name. 
6. Shred Sensitive Documents: Physical documents containing personal information, such as bank statements or tax returns, should be shredded before being discarded. This prevents thieves from finding critical data in your trash. 

How to Recover from Identity Theft

Despite taking preventive measures, identity theft can still happen. If you believe you are a victim, take the following steps: 

1. Report the Theft: File a report with the FTC and your local law enforcement. 
2. Contact Your Financial Institutions: Inform your bank and credit card companies so they can freeze accounts and prevent further unauthorized activity. 
3. Place a Fraud Alert on Your Credit Reports: Notify the major credit bureaus — Equifax, Experian, and TransUnion — to add a fraud alert to your profile. 
4. Review Your Credit Report: Look for unfamiliar accounts or inquiries and report any fraudulent information to the credit bureaus. 

If identity theft has disrupted your financial planning, it’s wise to seek professional advice. Our blog on choosing the right financial advisor can help you find someone who can assist you in recovering and safeguarding your future finances. 

Identity Theft Protection Tools and Services

While you can take many steps on your own, consider utilizing professional identity theft protection services for added peace of mind. Many of these services offer monitoring, fraud alerts, and assistance with recovery should your information be compromised. Popular options include: 

• Credit monitoring services
• Identity theft insurance
• Comprehensive protection plans offered by financial institutions

Stay One Step Ahead

The best way to protect yourself and your family from identity theft is to stay informed and vigilant. By understanding the risks and taking proactive measures, you can significantly reduce the chances of becoming a victim. For more guidance on identity theft protection and other financial security strategies, consider scheduling a free 10-minute guidance call with one of our advisors today.