The Financial Impact of Identity Theft and How to Protect Yourself

The US Federal Trade Commission estimates that 3 million Americans have recently experienced the illegal use of their credit cards. In 2013, Javelin Research determined one incident of identity fraud takes place every three seconds, and fraud incidents increased by 1 million consumers with 21 billion dollars stolen.

Identity theft occurs when a hacker or unauthorized person uses your name, address, date of birth, credit card, or bank account information for financial gain. The hacker might complete a transaction with, an existing credit card, obtain a new bank loan, withdrawing cash from an existing account, or otherwise steal from you.

A victim of identity theft might discover the unauthorized transaction on bank statements, through a review of the credit file, or when the bank declines a purchase or loan. Roughly 50% of identity thieves steal personal information from USBs, portable devices, and laptops. However, non-technical means such as mail fraud and recording account information without stealing the card occur frequently.

The 2017 Equifax Breach

Equifax, Experian, and Trans Union are the three credit bureaus, which compile personal consumer information. The companies maintain these consumer files, which establish both your credit report and score. All credit bureaus receive information on consumer activity from credit card companies, lenders, and retailers, without your knowledge or consent.

In May 2017, one of the worst security breaches in history occurred, when hackers breached the files of the Equifax credit bureau, exposing social security numbers, names, addresses, birthdates, and driver’s licenses, of over 143 million Americans. Nearly half of American adults lost personal information in the breach which lasted over three months before the discovery.

Outrage over the incident has not stopped hackers from selling and re-using personal data to create new identities, take out loans, and make unauthorized charges for millions of dollars.

How to Protect Yourself from Identity Theft

  • Don’t Overshare on Social Media

    Social Media introduces new threats because of a large amount of personal information found and tracked through social media companies. Innocent postings can give thieves access to your schedule, location, and enough data to steal your identity. Individuals using social networking for long periods of time are twice as likely to become victims of identity theft.

    To stop thieves, use caution when posting personal information, increase privacy settings, and become educated about financial risks. Sharing your birthday or family information can provide answers to common security questions such as your birth date, place of birth, your mother’s maiden name, or the name of your pet.

    Thieves combine resources to gain the facts needed to steal from you. They might refer to public information websites to learn your name, address, and phone number and then gain employment information, Birthdate, and other critical data combed from social media postings and disclosures.

  • Appropriately Handle Financial Documents

    Identity thieves still use offline tactics such as stealing mail from mailboxes and finding documents with sensitive information in the trash. Shredding any paperwork with personal data is the best strategy to protect from these types of theft. Valuable information might include your address, driver’s license number, full name, social security number, and birthday. Also, practice the habit of shredding old credit cards, new credit card offers blank checks and any statements which list the full account number.

  • Use Caution on Unsecured Wi-Fi Networks

    Convenience does not always mean safe. Checking your account balance on a café’s free Wi-Fi could give a thief your bank account information. If the Wi-Fi is not secure, do not visit any website where you need to type in a password or look up important information. An innocent activity such as checking your email could give hackers the information needed to direct spam to your account, enticing you to click on a corrupt link.

  • Monitor Your Credit

    Each month, review your credit card and bank statements carefully for unauthorized transactions. Promptly catching a breach can limit losses and reduce the time it takes to correct the problem. Identity thieves will often make small purchases you are likely to miss as you scan your statement, allowing them to steal more money over time.

    In addition to a careful review of statements, check each of the three credit reports at least once a year. A hacker can open new accounts in your name, which take longer to detect because they send statements to a different address. On your report, an account you did not open, address you never lived, or new employment can be a sign of fraudulent applications.

    New accounts result in an average loss per incident of $7,350, compared to losses averaging $4,197 on an existing account.

    To receive a free credit report at each of the three credit bureaus once every 12 months visit www.annualcreditreprot.com. It is also possible to place a credit freeze on the account, which prevents anyone, including you, from opening a new account.

  • Develop Strong Passwords

    Use different passwords for financial and non-financial accounts. Use a combination of numbers, letters, capitalization, and symbols to protect against successful guessing. Other ways to strengthen access is the use of two-factor identification and frequently changing passwords.

    Computer programs give identity thieves the ability to try thousands of passwords in seconds until they find the right one.

  • Keep Antivirus and Anti-Malware Up-To-Date.

    Viruses and malware help thieves steal information. Through malware, the software allows for unauthorized entry into your computer via email links or attachments. When activated, the malware will embed in your device and record keystrokes, including passwords. The malware can also search for financial information stored on the device or watch banking sessions.

    Losses are often more than monetary. It can take months to prove you are not responsible for fraudulent activity and require hundreds of hours of your time. In some cases, you can add an identity theft endorsement on your homeowner’s policy, which will pay an average of $15,000 to pay expenses associated with identity fraud.

If you are struggling with large amounts of high-interest credit card debt, contact the specialists at Finance Solutions today at (855) 331-4852 to receive a FREE debt analysis.  They will review your current situation and develop a customized plan to help you reduce your credit card debt.