How to Help Protect Against Fraud

Fraud and identity theft are constant threats. The same systems and technologies that make financial transactions fast, easy and convenient can be exploited by criminals. Identity thieves can open credit cards and take out loans in your name, withdraw from your bank account, claim your tax return or get medical care in your name. The threat is real and you need to be prepared. 

There is no guaranteed protection against fraud, but there are steps you can take to make yourself a more difficult target while ensuring that you detect fraud fast if it happens. Taking the time to protect yourself will put the odds in your favor! 

Protect Your PII

Your PII, or Personally Identifiable Information, is the key to your financial life. PII always includes confidential information like your social security number, account numbers and passwords. PII isn’t always private, however, and can include information that’s often public like your full name, address, workplace and phone number. Clever thieves can exploit public information to build a convincing profile of you. 

You can protect your PII with a few simple but effective steps:

  • Secure your online life. Use effective passwords, change them often, and restrict your social media profiles. Be careful about what you share on social media. 
  • Secure your devices. Use passwords and encryption, especially on laptops and mobile phones. Install anti-virus software and keep it up to date. Avoid saving your social security number or other critical information on mobile devices that could be stolen. 
  • Avoid public networks and use a VPN. Public networks may allow access to your device if it is not effectively secured. A Virtual Private Network or VPN will encrypt traffic between your device and the VPN server, making it much more difficult to break into your communications. 
  • Dispose of devices and storage media carefully. A discarded hard drive, USB drive, or mobile phone can be a treasure trove of information for an identity thief. 
  • Shred any sensitive documents before throwing them away. Bank or credit card statements, receipts, insurance forms, medical documents, and even bills can contain important PII. 
  • Keep your mail secure. Collect your mail regularly and be alert to any expected bank or credit card statements that you don’t receive. Lock your mailbox if possible. Stop your mail if you’re leaving town for a while. If you’re mailing a check or other sensitive document, do it from a post office. 
  • Don’t carry your Social Security Card or any document that contains your Social Security Number. Avoid carrying any financial documents that you don’t need. 
  • Destroy labels on prescription bottles before discarding. They may contain information that could give a thief access to your health plan. 
  • Separate your wallet and credit cards from other documents. Don’t carry them in the same place. Keep checks separate from ID. Don’t keep receipts or ATM receipts. 
  • Secure financial documents at home. Be careful who you allow into your house. Cleaning, repair or other service workers may steal checks or documents if they are unsecured. 
  • Talk about information security with your family. Make sure they are protected. Children and the elderly are vulnerable. 

Take care of your PII the same way you’d take care of your house or car keys. The more secure they are the harder it will be for identity thieves to victimize you.

Keep Clear of Con Artists

A surprising number of scams don’t rely on stealing information. Instead, they convince their victims to give their information or their money away voluntarily. They do this by phone, e-mail, or personal contact. They may pose as representatives of banks or financial institutions. They may promise prizes or threaten consequences if you don’t take immediate action. Watch out for the signs of a con. 

  • Never give out personal information on the phone, through the mail, or over the internet unless you initiated the contact and you’re sure who you’re dealing with. Be especially suspicious of anyone who claims to be dealing with an urgent or emergency situation. 
  • If someone on the phone claims to be a representative of a financial institution and asks for personal information, hang up or break contact. Contact the company yourself to verify the call. 
  • Never click on links in e-mail unless you’re absolutely sure the email is legitimate. Always check the sender’s address. It should match the institution that the email claims to come from. An e-mail may have your bank’s name and logo on it, but if it comes from a Gmail or Yahoo address something is wrong! 
  • Never believe someone who tells you that you’ve won something or there’s an opportunity to make a lot of money and then wants you to send money before you can get it. 
  • If someone asks for your Social Security Number or other key data, be suspicious. Ask why they need it and what they will do with it. When in doubt, don’t give it out. 
  • If you’re working at home, be suspicious of any “employer” who asks you to handle money or use your personal account for work purposes. Never agree to deposit a check in your account and send part of the proceeds to someone else. 
  • Never pay upfront for a promise. Many people and companies will claim to be able to wipe away debts or back taxes, repair your credit report or remove negative information, or perform other miracles… for a fee, of course. 
  • Beware of any “investment opportunity” that claims to guarantee exceptional returns. Pyramid and Ponzi schemes are among the oldest fraud methods out there, and people still fall for them. Check for FINRA or SEC registration. Consult a professional financial adviser before investing money. 
  • Watch out for affinity fraud. Affinity fraud uses perceived social connections like membership in a religious or political group. The scammer poses as a member of a group you’re predisposed to trust to get you to accept whatever scheme they are offering. Elderly people are common targets. 
  • Watch out for romance scams. These often work through social media. A person with an attractive profile makes contact on social media. Scammers playing a male role may claim to be soldiers in a risky environment or workers on an oil rig. Scammers playing a female role could claim to be hardworking students or victims of abuse. They establish a bond. Sooner or later they ask for money. Don’t send it. 

Always remember, if it sounds too good to be true, it’s probably not true. Be skeptical, be suspicious, and be safe!

Stop Fraud Early

Many victims don’t discover financial fraud until months or years after it begins. The longer the fraud or identity theft continues, the harder it is to unravel. Catching fraud quickly is an important way to contain damage and recover stolen money. 

  • Know your credit score and check it regularly. A sudden drop in your credit may be a sign of identity theft. 
  • Review your credit reports regularly. If you’re familiar with their contents and presentation it will be easier to spot anomalous entries. 
  • Check every bank or credit card statement thoroughly. Keep your own record of withdrawals and charges and compare them with the statement. Be alert for any activity that isn’t yours. 
  • Know the schedule of your bills and statements. If you don’t get an expected statement, check to see if it was sent. Use electronic billing when possible. 
  • If a company informs you that your data may have been compromised in a breach, take extra precautions. If they offer you extra protective services, take advantage of the offer. 
  • If you think you are at risk, consider credit monitoring. A credit monitoring service will alert you to any new activity on your credit report and can be a very effective way to spot credit-related fraud early. 
  • If you know or suspect that your data have been compromised, consider identity theft protection. If you want a higher level of protection, consider an identity theft protection service. These services provide credit monitoring but also additional services like regular public records searches, dark web searches to see if your information is for sale online, and additional insurance. 

Many victims take anywhere from six months to several years to discover that their identities have been compromised. That can lead to a much more complicated and expensive recovery period. Catching identity theft quickly is an important way to limit costs and damage, so stay vigilant and be aware of the signs!

Know What to Do Once You Identify Fraud

If you are hit by fraud or identity theft, you’ll need to act quickly. Thinking about what to do even before it happens will make that easier to do.

  • Report the fraud to the institution involved. That may be your bank, a credit card issuer, health insurance provider, even the IRS. Report the fraud, and for advice, and follow it. 
  • Report the fraud to your local police and/or attorney general’s office, whoever handles financial crimes in your jurisdiction. Keep the report. 
  • Contact a credit reporting company and ask to have a fraud alert placed on your credit report. If you place a fraud alert with one of the three major credit reporting companies – Experian, Equifax, and TransUnion – that company will notify the others. A fraud alert will require anyone issuing credit in your name to contact you for approval first. 
  • Consider a credit freeze. A credit freeze will stop all access to your credit report. You will not have access either, so you will not be able to get new credit or conduct any activity requiring a credit check while the freeze is in place. 
  • Inform your State Department of Motor Vehicles. If someone has your PII they may be carrying identification in your name and could impersonate you if they are stopped for a traffic violation. 
  • Inform the IRS. A scammer who has your personal data could report income in your name or file a tax return in your name and claim your refund. 
  • Report identity theft to the FTC. If you make an online report to the FTC you will receive a copy of the report and a tailored recovery plan. 

It’s important to stay organized as you respond to identity theft. Keep a copy of every report and every communication. Keep a log of all phone calls. Note the date and time, the institution, the name of the person you talked to, and the substance of the discussion.

Conclusion 

Fraud and identity theft are ever-present threats. Like most criminals, financial fraud artists prefer the easiest victims. They offer more opportunities with fewer risks. You can take effective steps to reduce the probability that you will be targeted and to assure that you will detect fraud early and minimize damage. 

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