Guarding Your Identity – How to Prevent Identity Theft
This newsletter is all about identity theft , which is often called “the scam of all scams.” That’s because having your identity stolen can lead to many kinds of fraud – credit cards opened in your name, loans, tax filings, even criminals impersonating you if they get caught. It’s scary stuff, but there’s plenty you can do to guard your personal data and stay safe.
What is Identity Theft?
Identity theft occurs when someone steals your personal information (like your Social Security/Social Insurance number, birthdate, driver’s license, account passwords, etc.) and uses it fraudulently. They might take over your existing accounts or open new accounts and debts under your name. Often, people only discover it when they notice strange charges or get bills for things they never bought.
How Thieves Get Your Info: Data breaches are a major source – if a company you do business with gets hacked, your info could end up for sale on the dark web. Phishing scams (covered in Issue #1) can trick you into giving away passwords. Thieves also rummage through trash for discarded bills (yes, dumpster diving is real), steal mail, or use devices to skim your card at ATMs or gas pumps. Even a lost wallet can hand a crook everything they need.
Protect Yourself from ID Theft
- Safeguard Personal Data: Treat your SSN/SIN like gold – don’t carry your Social Security card in your wallet, and only share that number when absolutely necessary. Shred financial documents before throwing them out. Secure your mail or use a P.O. box if mail theft is a risk.
- Use Strong, Unique Passwords: A compromised password can let hackers into multiple accounts if you reuse it. Create long, unique passwords for each account (a password manager can help – more on that in a minute). Enable two-factor authentication on sensitive accounts so even if a password leaks, the thief needs that second step (like a code on your phone) to get in.
- Watch Your Statements: Review bank and credit card statements every month for unfamiliar charges. Don’t ignore small odd charges – thieves often test with a little purchase before a bigger fraud. If something looks fishy, report it to your bank immediately.
- Check Your Credit Reports: In North America, you’re entitled to free credit reports (yearly in the U.S., or use a free monitoring service). Scan for accounts you don’t recognize – that’s a telltale sign someone opened credit in your name. If you see that, take action right away (contact the creditors and credit bureaus).
- Consider a Credit Freeze: You can freeze your credit files with the major bureaus (Equifax, Experian, TransUnion) for free. This prevents new creditors from pulling your report to open new accounts, essentially blocking anyone from opening credit in your name. If you plan to apply for new credit yourself, you can temporarily lift the freeze. It’s a strong preventive tool if you’re not anticipating needing new loans or cards soon.
Despite your best precautions, breaches happen. If you ever do suspect identity theft – for example, you get a debt collection notice for an account you never opened – act quickly . Contact your bank, the fraud departments of any affected companies, and report the identity theft at IdentityTheft.gov (in the U.S.) for a recovery plan. In Canada, you’d notify your local police and credit bureaus.
Build your defense arsenal: Use a Password Manager like Dashlane or 1Password to create and securely store strong passwords for all your accounts. This way, you only have to remember one master password, and the tool handles the rest. Many password managers can also alert you if a password was part of a known breach. Coupled with identity monitoring services (which can alert you to illicit use of your personal info), you’ll significantly reduce your risk of being the next victim of identity theft.
Stay vigilant – protecting your identity is an ongoing effort, but it’s absolutely worth it to keep your financial life secure.