They say imitation is the greatest form of flattery. This may be so in some cases, but not when it comes to someone stealing your identity and pretending to be you financially. In this scenario, it’s damaging financially and emotionally and ultimately creates a huge procedural burden to make it all go away.
I will admit up front that this topic is not one where I have expertise, so for this article, I’ve enlisted the help of my good friend, Tristan, who works in this space professionally for a credit union. I just wish I had more time to share some of the crazy situations he’s seen over the years.
We hear the term “identity theft” often, but what are we really talking about when we hear the words identity theft? Identity theft occurs when someone uses your personally identifying information, like your name, Social Security number, or credit card number, without your permission, to commit fraud or other crimes.
A recently published list of the ways stolen identities are commonly used shows false tax and wage documents making up over 45% of cases. The second most common use was related to credit card accounts. Let me pause briefly to point out that these statistics show that tax fraud is very common and is one area where we should be particularly careful. We have enough other reasons to keep our tax refunds from being large, but the risk of fraud gives us one more. I’ve seen a couple of situations where people were counting on a tax refund greater than $10,000 only to find out a fake tax return had already been filed and their refund had been issued to somebody else’s bank account. While they were eventually able to sort through the details, it still took a lot of time and effort and created some enormous headaches. It may have still happened even if the amount was smaller, but it wouldn’t have been as much of a financial burden for the victim.
How do they get your information?
There are a lot of ways people can get your personal information. In many cases, it is someone you know that found themselves in a desperate situation. That person could be a friend, a friend of a family member, a co-worker or the employee of an organization that has your personal information. There could also be a data breach or perhaps they drew some personal information from you with a phishing scam. The possibilities are endless and we just need to be careful to not spread our information more widely than we’re required.
How do we manage the risk?
The goal should be to reduce risk, not entirely eliminate it. It’s impossible to exist in this world and not have some risk of exposure. As Christians, we also need to keep our brother’s interest in mind and not put a stumbling block in front of those that are struggling financially and could be desperate for a way out.
Protect your social security number – That means not giving it out over the phone or even putting it on paperwork unless absolutely necessary. While most people don’t do this anymore, definitely don’t carry your Social Security card around with you either.
Check your credit history – I would suggest running your free credit report at least annually. You can do this through the website www.annualcreditreport.com. You are able to run a free credit report once a year from all three credit bureaus. You can choose to pull all three at the same time or one at a time throughout the course of the year.
Consider freezing your credit – You can place a freeze on your credit report free and do it all online. The positive side of the freeze is that it’s difficult for someone to access your credit report. The downside is that it’s difficult for someone to access your credit report. The freeze on your credit report will make it difficult for anyone to open fraudulent accounts. The downside for you is that you will need to go online and unfreeze your credit when you want to open a new account. It’s not a terrible process to remove the freeze, but it does add an additional step. In order to fully freeze your credit, you will need to do it with all three credit bureaus.
Monitor your accounts – It’s important to keep an eye on all your financial accounts. That means you should balance your checkbook, review investment account statements and always look through your credit card bills to make sure there is no unauthorized activity. These things are all good practices regardless of the risk of identity theft. You may even catch honest mistakes in the review process.
Don’t trust unknown requests or links – Just because you got an e-mail or a phone call from what sounds like an official source, don’t give out your personal information. If you think the communication is legitimate, end the conversation and contact the organization yourself using contact information you know to be trustworthy. If you get an e-mail with a link, don’t click the link unless you are sure you can trust it. The people committing fraud are creative and we need to always be cautious.
Use sophisticated passwords – It seems like everything needs a password these days and most people probably have more passwords than they can possibly remember. When creating passwords, it’s important to use unique and complex passwords for your different accounts. Don’t be predictable by using the name of a pet, child or anything else someone could guess. Always try to use a mixture of letters, numbers and symbols as well. You should also password protect sensitive documents you have stored on your computer. Another thing to keep in mind is that the password you should probably consider the most important is the password to your e-mail account. Your e-mail account is typically the gateway to all your other passwords. When you go to a website and can’t remember your password, there will normally be an option to have it e-mailed to you. If someone hacks your e-mail account, they now have access to your other accounts as well.
Don’t be naïve – These are the stories we often laugh at, but I wouldn’t bother to mention them if people weren’t still getting duped. Don’t fall for the following snares:
- You got an inheritance from a relative you didn’t know.
- You won the lottery you didn’t play.
- A foreign government official or businessperson needs help transferring money to the U.S.
- You’re being hired over the internet
- Someone sends you a check for any reason, asks you to deposit it, and wire some of it back. A legitimate business does not operate this way. The check will bounce and you will be liable to the bank for the money you wired out.
Protect the elderly and the young – Unfortunately, senior citizens make for easy targets. They are being actively targeted by phishing and other sophisticated scams in an attempt to get them to share their information. Their trusting nature and lack of technological sophistication make them extremely vulnerable.
Children on the other hand are targeted because their lack of credit history provides criminals with a blank slate and since their identification is rarely being actively monitored there is a lower risk of detection.
As caring adults, we should all do our part to help protect elderly friends and family members as well as our children from becoming victims.
Ultimately, if it sounds too good to be true, it probably is. The one comfort we can take from all of this identity theft talk is that while our earthly identity may be compromised, if you are in Christ, your eternal identity is safe and secure. As we read in John 10:27-28, “My sheep hear my voice, and I know them, and they follow me. I give them eternal life, and they will never perish, and no one will snatch them out of my hand.”
Brad Graber, CFP® has been working with clients on personal financial planning and investment issues since 1996. He invests his time mentoring and educating individuals on ways to be better stewards of the resources God has entrusted to them.