The idea alone of identity theft is terrifying. The fact that someone can literally take your information and pose as you to fraudulently conduct transactions can leave us feeling very vulnerable and violated. Identity theft is one of the fastest-growing criminal activities in our world today. And it’s not going away any time soon.
With our world becoming increasingly digital, there will always be new ways by which thieves try to get our information. So we have to be smart about how do we ID theft protection.
One of the scary things about identity theft is that many people are completely unaware of it sometimes. This is an issue that we need to be proactive about, at least to the degree that we can.
Consider some of these facts about identity theft.
The Most Common ID Theft Incidents Hit Close to Home
No one wants to believe that a member of their family or a close friend would make fraudulent transactions in their name. But it happens all the time.
One report found that nearly 1/3 of all identity theft incidents involved a close family member or relative.
Jennifer Peters, a certified credit counselor with Consumer Credit Counseling Service of West Georgia/East Alabama, states that:
“Based on my experience, it’s pretty regular and it’s pretty underreported. Very often [victims] know and aren’t going to do anything about it.”
Identity Theft Often Goes Undetected for Years
Many times, a person will receive a letter from a credit card company demanding payment for thousands of dollars. The person will have no idea what to say or do because the transactions were fraudulent.
Some callers into The Dave Ramsey Show say on a regular basis that a family member was taking out cards in their name for years without their knowledge, and they only just discovered it.
Identity theft is not a crime you necessarily feel immediately. It may take quite a long period of time for the truth to come to light.
Your Debit Card Is An Overlooked Vulnerability
Debit cards often have the Visa or MasterCard logo. The debit card allows you to make transactions online, in stores, and access your checking account at the ATM. The debit card requires typing in a PIN (personal identification number) to process the transaction. This is where the vulnerability comes in.
One thing that Dave Ramsey says on his radio show is that debit cards have fraud protections in the same way that credit cards do. Visa, MasterCard, etc. do not place the liability for fraudulent charges on the consumer if a thief steals the information and uses it fraudulently.
This is partially true, though, because this fraud protection may not apply if you use your debit card PIN.
One identity theft agent I once spoke with revealed that she has had quite a few clients who have had their PINs stolen. The thief then used the numbers to make various fraudulent transactions.
The consumer informed the bank of the fraudulent charge, and the bank initially refunded the money under the Visa fraud protection. But once the bank found out that the thief used the PIN, the bank revoked the reimbursement.
The loophole was that Visa’s fraud protection did not apply to purchases made with the PIN.
Unexpected People Need Identity Theft Protection
Believe it or not, it is possible to steal and use the identities of deceased people. Even your children can suffer from identity theft. It is easy to gloss over a deceased parent’s or your children’s information. But thieves can and do access their information and open credit cards in their names.
If you have a deceased relative who lived in your household, having some sort of monitoring of their information is wise. Make sure the plan includes your children. If they suffer from identity theft, the company will accept the claim.
When your children reach adulthood, you don’t want them to be in a situation where they are turned down for a bank account, mortgage, or apartment because of old debts that were fraudulent. Having your children covered in your identity theft protection policy is one way to further secure their financial future.
Not All ID Theft Protection Plans Are Created Equal
One of the most popular companies that advertise their identity theft protection plans is LifeLock. This company claims that they are one of the most comprehensive identity theft protection plans out there. But that’s not necessarily true.
Some companies, in their policies, spell out that they do not cover incidents from a family member. LifeLock is one of those companies, according to my source in the identity theft protection industry.
Since the assailant is often someone in your proximity, why purchase a policy that doesn’t cover this?
LifeLock also does not do the restoration of your identity. All they do is pretty much give a manual on how to restore your identity. The restoration process takes many working hours to complete.
Why pay for a policy that does not cover the most labor-intensive part of the entire situation?
Bottom line: look at the fine print of the ID theft protection policy and see what it does and does not cover.
In light of all this, you may be asking yourself what the next step is. Now that you know some ways that thieves take others’ identities, how do you prevent it?
Well, unfortunately, there is only so much we can do to prevent it. It’s mostly the recovery side where the action takes place. We can be proactive though, and here are some suggestions I make:
Be Proactive: Start Monitoring Now
First, and probably most obvious, is to actively monitor all of your open accounts. If you have credit cards open and are paying them off, monitor the accounts to make sure there are no new charges.
This also applies to your checking and savings accounts and any other financial account you have open.
Obtain a Good ID Theft Protection Plan
Second, get an identity theft protection plan that truly does what the company claims. One great company that I use personally is Zander.
Their team actively monitors your information. They will send an alert if there is suspicious use of your information. Their family plan covers your children. If a transaction was fraudulent, Zander’s team takes over all of the recovery work on your behalf.
LegalShield also offers a plan that does monitoring and restoration.
Run Debit Card Transactions as a Credit
Third, when using your debit card out and about, only run it as a credit. When you slide your card or insert the chip, do not put your PIN number into the keypad. Always select the credit option.
Using the PIN risks bypassing the fraud protections as some people have learned the hard way.
Freeze Your Credit
Fourth, place a freeze on your credit with the three bureaus and review your information in the reports. When your credit is frozen with TransUnion, Equifax, and Experian, identity thieves cannot open new accounts. You must manually authorize the transaction.
Each year, request a copy of your credit report from each of the three bureaus and review everything there.
Use a Virtual Private Network (VPN)
Fifth, use a VPN when shopping online. The VPN scrambles your IP address and makes it more difficult for hackers to get your information.
Think of it as a bridge over water. Yes, you can swim across that body of water. But it is much safer to cross the bridge in the comfort of your vehicle.
Bonus ID Theft Protection Tip
Use the most secure form of payment when shopping: cash!
While identity theft is a major issue in our world, we can prepare ourselves. It may happen at some point and has happened to hundreds of millions of people over the past decade. But you can take proactive steps to protect yourself and your family.
Take control of your financial future today. Book your free Discovery Session to see how I can help you create the freedom and legacy you’ve been dreaming of.