Each year millions of Americans fall victim to financial fraud and identity theft. In 2020 alone the Federal Trade Commission (FTC) received more than 2.1 million fraud reports from consumers, with impostor scams cited as the most common.
Identity theft can be a stressful experience and have a significant impact on your credit and finances. Follow these best practices to protect your financial security and personal details from identity thieves and hackers.
Track your credit report
An effective way to spot suspicious activity is to track your credit report. Identity thieves can use personal information to take out credit card debt and loans in your name. The faster you act, the easier it will be to clean up before it gets out of hand.
You’re entitled to one free credit report every 12 months from each of the three major credit bureaus. Plus, you can sign up for free credit-monitoring services to alert you of real-time activity on your credit report, including purchases made on an existing account.
Shred personal documentation
Documentation including bank statements, credit card statements, and paper bills can expose sensitive information such as your social security number and account details. To reduce the risk of fraud, it’s important to destroy all documents when you finish using them.
Watch out for phishing scams
Phishing scams target consumers with a phone call, email, or text message that appears to be from a trusted source such as a bank or credit card company. They aim to trick consumers into handing over personal identifying information that can be used to open a new account in the consumer’s name or carry out e-commerce transactions.
If you receive an email that asks you to click on a link, download an attachment, or give personal information, avoid responding to the email. Instead, go over to the official website of the company in question and get in touch with customer support to verify the email first.
Create secure passwords
Each account you use should have a unique password with a random sequence of characters, numbers, and letters. Avoid using birthdays, locations, and names as these are easily guessable.
Data breaches happen all the time and if hackers get hold of login credentials for one website, they may attempt to use it for another. It’s important to change your passwords regularly. If this becomes difficult to track, consider using a password management tool to securely store your information.
Use two-factor authentication
Two-factor authentication creates a second layer of defense to access an account. Login requires a password and a one-time code sent to your phone number or email.
Many banks and credit card companies allow you to activate two-factor authentication at no extra cost.
Limit personal information on social media
Public social media profiles make personal information such as names, birthdays, and where you live easily accessible. Avoid oversharing, as criminals can use this information to steal your identity.
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