High-profile credit breaches involving major corporations have been in the news lately. Home Depot, Dairy Queen, United Parcel Service, and JP Morgan were a few of the most recent victims. As a precaution, customers are advised to check their statements carefully for unusual activity. The companies whose customers were believed to be affected usually are offered free credit monitoring for a year.
This type of information theft has become so commonplace that Congress has been called upon to act. Rather than wait for Congress, there are several things you can do to protect your financial and personal information.
Pay with cash.
Cash is anonymous and protects you from identity theft or fraud. Servers will often take the credit card in a restaurant and leave to process the transaction. Paying with cash assures no exchange of personal information when your payment leaves the table. As a side benefit, using cash encourages frugal spending.
Protect your smartphone.
Today’s smartphones are part wallet, part telephone, and part computer. Your smartphone is a treasure trove of information to a thief. The phone grants access to your online banking, email, passwords to online accounts, and would allow a thief to reset all of your account passwords using your email account.
Most smartphones have the ability to encrypt the phone’s data and lock the screen so it can only be opened with a password. This is a simple and effective step to take to protect your most vulnerable information, yet only 38% of smartphone owners do this. Be sure to log out before closing applications – especially banking and bill payment apps. Never store login or password information in an app’s data-entry fields for easy access later.
Smart phones are easy to lose. An easy safeguard against a lost (or stolen) phone is to install a location-tracking app. Both Apple’s iPhone and Android phones have these apps. As an added precaution, you should set up your phone so that you can remotely erase its data. This service is available through most wireless carriers.
Check financial statements carefully.
This is good advice even if you’re not a potential victim of an information breach. Order a credit report from one of the reporting agencies every 4 months to check for unusual activity. Pay close attention to any new accounts that may have been opened since the last report. Be sure to review your bank and investment account statements each month.
Take the two-step approach.
Many financial institutions have begun to offer two-step verification in order to access your account. Typically this involves logging in with a password and then an additional security code is required before the account access is granted. The second code is sent to your email account or by text to your phone. Some institutions provide a physical code generator to ensure it is really the account owner who is logging in.
Follow smart email practices.
Never click through an alert from your financial institution even if you think you recognize the sender. Phishing scams are cleverly disguised to look legitimate. Go directly to your online account to see if they sent the alert and take any necessary action in the account. Never log into your accounts over “free WiFi” networks where hackers could collect your login information. It’s safer to purchase a hotspot from your wireless provider, or to subscribe to a hotspot provider, where networks are password protected and provide additional levels of security.
Consider what you share on social media.
Posting too much personal information online opens you up to identity theft, so it’s best to be thoughtful about the information you share. Thieves can build a profile of you based on trips you have taken, personality quizzes you complete, product pages you “liked,” and groups you joined. Scammers can use this information to send highly-targeted emails to you pretending to be someone you know or a business you trust. These “phishing” scam emails often include links to an infected website or opens a program that grants the thieves access to your computer or device.
It is nearly impossible to avoid the risk of identity theft completely. However, following these best practices can minimize your risk. If you detect unusual or fraudulent activity, notify the financial institution involved so they can freeze your account immediately. You may need to file a complaint with the Federal Trade Commission and your local police department.
- Security breaches at financial institutions and major stores make us all vulnerable to identity theft.
- Follow online security best practices to minimize the risk of having your information stolen electronically.
- Vigilance is the best protection. Be sure to monitor your statements and credit reports regularly.