Our colleague and MFA founder Susan Moore contributed the following article.
Over the last weeks, I’ve received six letters that went something like this:
“Dear Susan – We’ve received your application for a credit card. We are unable to act on your application at this time because we’ve received notification from [Experian/Equifax/Transunion] that you’ve placed a security freeze on your credit file.”
I expect that I’ll receive more letters like this in the coming weeks.
Somewhere along the line, elements of my identifying information, including my Social Security number, have been hacked. That’s not really surprising.
Identity fraud is a growing concern in today’s digital age, impacting millions of people each year. As your financial planners, we want to provide you with the information and tools to help you protect yourself from this pervasive threat.
The Scope of Identity Fraud
Identity fraud affects a significant portion of the population in the United States. According to a report from Javelin Strategy & Research, approximately 33% of U.S. adults have experienced some form of identity theft. This means one in three people have had their personal information compromised, leading to financial loss and emotional distress.
How Is Information Stolen?
Fraudsters use various methods to steal personal information. Here are some common ways:
- Data Breaches: Large-scale data breaches at companies can expose millions of individuals’ personal information, including Social Security numbers, addresses, and financial data.
- Phishing Scams: Fraudsters use emails, texts, social media messages, or phone calls that appear to be from legitimate sources, tricking individuals into providing personal information.
- Skimming: Devices placed on ATMs or point-of-sale terminals capture card information during transactions.
- Mail Theft: Stealing mail can give criminals access to bank statements, credit card bills, and other personal information.
- Social Engineering: Manipulating individuals into divulging confidential information through deceitful tactics.
Notable Companies Affected by Data Breaches
A number of high-profile companies have experienced data breaches, exposing millions of people’s personal information, and the list keeps growing. A few of these include:
- Equifax: In 2017, the credit reporting bureau Equifax suffered a data breach affecting over 147 million people, compromising Social Security numbers, birth dates, addresses, and driver’s license numbers.
- Target: In 2013, Target experienced a data breach that affected 40 million customers’ credit and debit card information.
- Yahoo: Yahoo faced a series of data breaches between 2013 and 2016, affecting all 3 billion user accounts.
- Marriott: In 2018, Marriott disclosed a data breach that exposed information on approximately 500 million guests.
How to Place a Credit Freeze
Placing a freeze on your credit report can prevent fraudsters from opening new accounts in your name.
Even though the fraudsters who tried to open accounts in my name has my Social Security number, their efforts failed because I have a freeze on my credit reports.
Here are instructions for placing a freeze with each of the three major credit bureaus:
- Visit the credit bureau’s website or call them
- Provide the required personal information
- Create a PIN to manage your freeze
- Confirm the freeze through the method provided (online, phone, or mail)
And here is the contact information for each of the major credit bureaus:
Equifax
- equifax.com
- phone: 800-349-9960
Experian
- experian.com
- phone: 888-397-3742
TransUnion
- transunion.com
- phone: 888-909-8872
It’s important to put a freeze on your records at all three of the above agencies. And although the above three companies are the largest credit reporting agencies, there is another one: Innovis. You can place a freeze on your records there by calling 1-866-712-4546 or going to their website.
Additional Tips to Protect Against Credit Fraud
- Use Extreme Caution in Sharing Your Personal Information. Don’t share personal information over the phone or online unless you are certain of the recipient’s identity. Don’t assume that because you’ve been asked for information, you need to provide it.
- Example 1:if filling out a new client/account/patient form that asks for your SS number, try leaving it blank, and see if you’re asked again to provide it.
- Example 2:If you receive a phone call asking for personal info, it most likely is an attempt to steal your information for fraudulent purposes. Be suspicious of these calls. Ask them to send you a request in email or snail mail. (Don’t ask for a phone number where you can call them back; they often have set up fake phone numbers to trick you.)
- Monitor Your Credit Reports: Regularly review your credit reports from Equifax, Experian, and TransUnion to check for unauthorized activity. You can get a free report annually from each bureau at AnnualCreditReport.com.
- Use Strong Passwords: Create strong, unique passwords for your online accounts, and update them regularly. Consider using a password manager to keep track of them.
- Enable Two-Factor Authentication (2FA): Add an extra layer of security to your online accounts by enabling 2FA, which requires a second form of verification.
- Shred Personal Documents: Shred any documents containing personal information before disposing of them.
- Secure Your Devices: Use antivirus software, keep your operating system updated, and be cautious when downloading apps or software.
Identity fraud is a serious threat that requires vigilance and proactive measures to mitigate.
By understanding how fraudsters operate and taking steps to protect your personal information, you can significantly reduce the risk of falling victim to identity theft.
If you suspect your identity has been compromised, act quickly to minimize potential damage. As always, feel free to reach out for assistance or guidance in safeguarding your financial future.
-SM