Online fraud and identity theft are huge problems. Hackers are everywhere. From the lone individual in his parent’s basement to state sponsored hackers from Russia and China, it's only getting worse. Like it or not, online fraud and identity theft are problems most all of us will have to experience at one time or another.
In fact, Angie and I fell victim to identity theft a couple of years ago. While reconciling our checking account, we discovered someone in Miami was using our debit card info to buy groceries and make ATM withdrawals.
It took a couple of weeks to get the issue resolved, but it didn’t cost us any money. However, it did cost a couple of weeks of aggravation.
Below I’ll show you everything you need to know about how to prevent identity theft and online fraud. I’ll also hook you up with some excellent resources to help prevent you from becoming a victim.
What is Identity Theft?
Identity theft happens when someone steals your personal information to use for illegal activities. It happens most often through electronic means (see below). However, it also happens through methods as simple as stealing sensitive mail out of your mailbox (bank statements, etc.) or someone breaking into your home.
How Does Identity Theft and Online Fraud Happen?
Online fraud and identity theft comes in many different forms. For instance, we’ve all gotten those emails promising millions of dollars if we help someone overseas transfer their inheritance to the US. You have also probably seen emails from PayPal or your bank saying there is a problem with your account and requesting information. They can look very official, but they are a scam.
Sometimes these attempts at fraud are very easy to spot. But if you're not careful, they can lure you into clicking a link that will download a virus to your computer.
Here’s a list of some of the most common methods of online fraud and identity theft:
Data breaches happen when a hacker (or even a trusted employee) breaks into a corporate or government computer to steal data. This includes info such as credit card numbers, names, addresses, Social Security numbers, and more.
Skimming happens at the point of transaction. It usually happens when an employee at a gas station, restaurant, or other business uses a hand held credit card scanner to steal your information and store it for later use.
Smartphones are not very secure. When you make a call, use an app, send a text, or send email, someone may be monitoring those activities. With the right equipment or a malicious app, it’s easy to gain access to a smartphone and steal any data on that phone.
Phishing is an attempt to get you to share personal information. It usually comes in the form of an email asking for information from someone posing as your bank or other official entity. Phishing can also happen in a popup on your computer screen saying you've won a prize or a contest. The goal is to get you to click on a link that downloads a virus to your computer that gains complete access to your information.
Unsecure Internet Connections
Using an unsecure public wifi connection can also be a problem. Since it’s public and unsecured, others can monitor your activity and gain access to your computer. Be very careful about what networks you use.
What To Do If You’re a Victim of Identity Theft
There are several things you need to do if your important information has been stolen:
- Call the Police- They can help locate the person responsible for the crime. They will also file a report that can be used for any insurance claims you may file.
- Contact Your Bank- Immediately contact your bank and any other institutions you do business with so they can take appropriate action with your accounts.
- Report it to the FTC- The Federal Trade Commission tracks identity theft cases. Filing a report can aid in prosecution of the criminals responsible as well as repairing credit reports.
- Contact Credit Reporting Agencies- Alert the credit monitoring agencies (Experian, TransUnion, and Equifax) that fraud has happened. They can put a fraud alert or freeze on your credit report. Click here to find out the difference between a credit freeze and a fraud alert.
15 Ways to Prevent Identity Theft and Online Fraud
So now that you know all about identity theft and how to report it, here are 15 things you can do to prevent it in the first place:
- Protect Your Passwords- Use a different password for each online account. Keep them protected using an online password manager. The most secure passwords contain at least 8 characters and a combination of letters, numbers, and symbols.
- Use Cash- Debit and credit card information is always being stolen. I prefer to use cash in an envelope system for most of my transactions. Cash is king!
- Never Give Information to Unsolicited Callers- Although there are some legitimate businesses that sell over the phone, many aren’t.
- Keep Your Smartphone Protected- Use an antivirus app. Also use a password lock and a data deleting app that you can access from a computer if your phone is stolen. Only download apps from a trusted app store.
- Secure Your WiFi at Home- Use secure encryption on your home network so that it can’t be easily hacked.
- Don’t Click the Links- If an email is suspicious, don’t click any links. If you do click a link, run a full scan with your antivirus software ASAP.
- Keep Your Operating System Up to Date- Keep your OS and web browser up to date. Enabling automatic updates in your settings achieves this very well without having to constantly do it yourself.
- Use a Firewall and Antivirus Software- You can also set these up for automatic scans to consistently keep your computer clean from viruses and other problems.
- Check Your Bank Accounts Frequently- The more often you check your accounts, the more likely you are to spot suspicious activity quickly.
- Only Buy From Online Retailers You Trust- There are tons of scam sites out there offering incredibly low prices on desirable items. If the price sounds too good to be true, it probably is.
- Never Use a Public Network When Accessing Sensitive Information- Wait to get onto a secure network before checking your bank account or accessing other private information.
- Use an Identity Protection Service- Services such as Life Lock and Identity Guard can provide constant monitoring and keep you protected if your identity is compromised.
Find out more about Life Lock Here
Find out more about Identity Guard here
- Delete Suspicious Emails- When you get a suspicious email, completely delete it from your computer.
- Don’t Carry Your Social Security Card- Keep it locked up in a safe place. You will almost never need to have the actual card with you.
- Shred Important Documents- Some people will search through your trash for important documents. Shredding them provides extra security.
Identity Theft is Here to Stay
With the ingenuity of hackers and others interested in accessing your information, you can bet that your information is never totally secure. However, the more diligent you are about protecting your valuable data, the less likely you’ll have to deal with your identity being stolen.
So do everything you can to protect your identity, then hope and pray that identity theft doesn’t happen to you.
Question: Have you ever had your vital information stolen? Leave a comment and tell me what happened.
More resources for Identity Theft: