Whether it’s hacking into your bank account, making fraudulent purchases with your credit card, or filing unemployment claims under your name, identity theft occurs all the time. At Windward, we frequently hear from clients that are victims of identity theft and are left to clean up the mess identity thieves have left behind.
What exactly is identity theft?
Identity theft is when someone illegally uses your personal information to take over your account(s), file fraudulent applications to open credit cards in your name, file false tax returns, make fraudulent unemployment claims and more. There are two general categories of identity theft: account takeovers and application fraud. An account takeover is when someone utilizes your existing bank and/or credit accounts for fraudulent purchases. Application fraud is when someone uses your Social Security number and other identifying information (name, address, etc.) to open new credit in your name.
If someone has the right information and the wrong intention, they could open accounts to finance the purchase of furniture, cars, or even property in your name. You may not know about it until you start receiving late payment notices in the mail. They could even steal your ATM card, gaining access to your bank account. If you don’t stay on top of it, you could be liable for stolen funds.
Amidst the COVID-19 pandemic, there has been a significant increase in the number of fraudsters filing claims for unemployment benefits. This is not just happening in Kansas and Missouri, but state unemployment systems across the United States have been overwhelmed by fraudulent unemployment claims.
How can you stay on top of this and protect yourself?
Review your credit reports regularly
You can obtain a free copy of your credit report once a year from each of the three major credit reporting agencies: Equifax, Experian, and TransUnion. Visit annualcreditreport.com for more information and request to receive your credit report online or by mail.
Review your credit reports carefully. Does everything look correct? Are you aware of all the activity and accounts? Do you recognize all the address changes? Is everything spelled correctly? If anything is incorrect or if you suspect there are fraudulent transactions on your credit report, contest them immediately. You should contest fraudulent transactions in writing to the credit bureaus, and work with them to clear up the report.
Keep personal information personal
First and foremost, never provide personal information like your Social Security number over the phone, mail, or e-mail unless you initiated the contact or transaction! The IRS or Social Security Administration will not call you to request information about your Social Security number, date of birth, or any other piece of identifying personal information.
Shred monthly statements showing account numbers and transactions, receipts with account numbers, canceled checks, and sometimes even credit offers should be shredded. Some people are willing to go to the extreme of going through your trash to steal your personal information! Investing in a cross cut or diamond cut shredder is the best way to make sure you dispose of sensitive information securely.
Consider removing your name from distribution and telemarketing lists.
• www.donotcall.gov – you can add your phone number to the FTC’s National Do Not Call Registry
• www.dmaconsumers.org – you can remove your name from national telemarketing lists
• Removing your contact information from telephone books and directories can also be helpful.
Don’t carry your Social Security card or any other cards that have your SSN on your person, in case they get lost or stolen. Don’t print your Social Security number on checks, and don’t write it on a check if a merchant requests it.
Be careful about keeping information on a personal laptop, tablet, or phone that could easily be stolen. Keep your devices password protected and avoid using public wireless internet to keep sensitive information safe and secure.
File your tax returns early
Scammers can use your identity to file a fraudulent income tax return to receive a tax refund. To avoid this, file your income tax returns early. Also consider obtaining an Identity Protection PIN (IP PIN) from the IRS that prevents someone else from filing a tax return using your Social Security Number. Starting in 2021, you can voluntarily opt into the IP PIN program as a proactive way to protect yourself from tax-related identity theft. To learn more about obtaining an IP PIN, click here.
Review your account transactions regularly
Stay on top of your bank and credit card transactions by reviewing them regularly to ensure all transactions look familiar. If you have a question or concern about a transaction, contact your bank or creditor ASAP.
Be safe online
Install a firewall to stop hackers from accessing information from your hard drive or gaining control of your computer to commit other crimes. This is especially important if your device is constantly connected to the internet – which most of our devices these days are. Make sure you have anti-virus software and update it regularly. Invest the time and money to ensure you are browsing the web safely and securely.
When reviewing your email, avoid clicking on embedded links. This can lead to a virus infecting your computer, spyware monitoring your keystrokes for access to private information and/or fake websites designed to trick you in to logging in and providing personal information. Instead of clicking on a link within an email, use a stored bookmark or type the URL addresses directly into the browser.
Only provide personal information online while on secure websites. Check for “https” (instead of “http”) or for a lock icon in the browser status bar. This is an indication the website is secure. If in doubt, try to find a phone number to call instead.
Use Secure Passwords
Use password protection to keep sensitive information safe. The more layers of password protection the better. For example, one password to get into the device and then another password to access a locked document.
If you use weak passwords (or the same password for everything) to secure your online accounts, you’re only making it easier for someone to compromise your accounts. Using a password manager can help you seamlessly oversee and manage all your login credentials. In addition to keeping your login info safe, a password manager also has a password generator to help you create unique and challenging passwords. Be sure to research online to find a trustworthy password manager with secure backup.
Safely dispose of unneeded electronics
Updating electronics is inevitable in today’s fast-changing world of technology. Before trading in or disposing of your old device, be sure to erase the hard drive. Wiping your device’s hard drive is different than just deleting everything. The process of wiping a hard drive is different for each device, so if you’re unsure of how to do this check the owner’s manual.
Coping with a stolen identity
What if suddenly you have empty bank accounts, credit card bills show up that you don’t recognize, and/or you are receiving late notices for property you don’t own? How do you pull yourself out of this mess?
You will want to get in touch with all your financial institutions, contact the authorities if appropriate, be observant, and stay on top of it! Depending on what has occurred, you may need to contact credit card companies, your bank, the state unemployment benefits office, one of the major credit reporting agencies, and/or local, state, or federal law enforcement authorities.
Scamming Your Unemployment Benefits
If you have received a notice from your employer or state unemployment benefits office about a supposed application for unemployment benefits, make sure to report the fraud to your employer and to your state unemployment agency. You may also want to contact your banks and credit card companies. Follow their advice as to whether you should close your account. Check your Social Security earnings statement online to make sure your reported wages are correct. You can do this by setting up an account at ssa.gov.
Since someone used your SSN to report employment earnings, you’ll want to notify the Internal Revenue Service’s fraud hotline at 1-800-908-4490. Request a copy of your Wage and Income Transcript from the IRS. You will need to report and dispute any fraudulent earnings listed on the Wage and Income Transcript. You can go to http://www.irs.gov/privacy/article/0,,id=186436,00.html. You may also want to go to www.identitytheft.gov to file a report with the Federal Trade Commission.
Having our offices in North Kansas City, MO and Overland Park, KS, many of our clients live in the Kansas City metropolitan area. If you are a Kansas resident and have been a victim of a fraudulent unemployment claim, go to https://www.dol.ks.gov/fraud to read more. If you are a Missouri resident and have been a victim of fraudulent activity, go to https://labor.mo.gov/DES/report_fraud. Visit your state’s Department of Labor website for more information about what you need to do if you are a victim of unemployment fraud.
Fraudulent Credit/Debit Card Charges and/or New Credit Accounts
If you notice fraudulent credit card charges, notify the credit card company immediately. The credit card company will likely cancel your existing credit card and issue you a new one. Federal law limits your liability to $50 of fraudulent charges prior to reporting the card was stolen. If you report your card as stolen before it’s used, you will not be responsible for any charges.
What if credit has been taken out in your name you didn’t know about? The quickest way to find this is by reviewing your annual credit report. Once you’ve identified the fraudulent credit activity, contact the company to have them close the account. To help prove you did not open the credit account, request copies of signed application forms or transaction records to verify the signature wasn’t yours. The credit company may also have you fill out a fraud affidavit.
If your debit (ATM) card is stolen and used, report it immediately. Your liability for such charges depends on how quickly the loss is reported. You could risk unlimited losses if you fail to report fraudulent charges in a timely manner so review these transactions frequently!
Notify the Credit Reporting Bureaus
Make sure one of the three major credit reporting bureaus (Equifax, Experian, or TransUnion) have been notified of fraudulent credit activity. Once you have notified the first, they will notify the remaining two. You can place a fraud alert on your credit for one year that requires any user of your report to verify your identity before extending credit or issuing new credit. To read more about placing a fraud alert on your credit report, click here.
Consider a Credit Freeze
In addition to the fraud alert, you could freeze your credit. Also known as a security freeze, you can restrict access to your credit report. Once you freeze your credit, no one has access to your credit report unless you “thaw” it for them. Creditors, insurers, and potential employers can’t run your credit without you “unlocking” your credit report first. This makes it more difficult for identity thieves to open new accounts in your name. To implement a credit freeze, read more here.
Tell the Authorities
You may need to file a report with local, state, or federal authorities. You may need a copy of this report to get an extended fraud alert with the credit bureaus and to get fraudulent transactions forgiven by banks and creditors.
USPS, DMV, USDS, SSA
If you suspect mail tampering as a source of the fraud, contact the USPS. If your Driver’s License has been used to write bad checks or other forms of fraud, contact the DMV. If your passport has been lost or stolen, contact the US Department of State. If your Social Security card is stolen, contact the Social Security Administration.
It is unfortunate that identity theft is such a common occurrence. Staying on top of your accounts and keeping your information safe is the key to preventing it and getting it cleaned up quickly if it should happen. Review all your financial transactions and statements regularly and timely. Make sure they are familiar and anything you aren’t sure about, call the financial institution. Review your credit reports regularly for anything you don’t recognize and request any corrections in writing. Stay on top it by constantly reviewing the activity in your accounts and credit. Be smart online and be cautious about providing sensitive information to others.
This blog is provided by Windward Private Wealth Management Inc. (“Windward” or the “Firm”) for informational purposes only. Investing involves the risk of loss and investors should be prepared to bear potential losses. No portion of this blog is to be construed as a solicitation to buy or sell a security or the provision of personalized investment, tax or legal advice. Certain information contained in the individual blog posts will be derived from sources that Windward believes to be reliable; however, the Firm does not guarantee the accuracy or timeliness of such information and assumes no liability for any resulting damages.
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