5 Tips for Identity Protection in a “Mega Breach” World

mega-breach-identity-protection-480x372The stunning announcement by Anthem Blue Cross that 80 million of its customers’ private information was stolen by hackers has a lot of people worried about protecting their identity—and rightfully so. The latest in a string of high profile “mega breaches” (Home Depot and Target breaches are other recent examples), this one is particularly frightful because of the type of information that was stolen: Social Security numbers, identification numbers, employment and income data, etc. Armed with this information, a thief can readily take over a person’s identity and do really bad things, such as filing false tax returns (in order to steal tax refunds), applying for credit cards, withdrawing from bank accounts or committing medical fraud.

So how can you protect your identity when your private information is no longer private? While there’s no perfect single solution, here are 5 tips for protecting yourself against mega breaches to the best degree possible.

1) Put a “Freeze” on Your Credit

Placing a “freeze” on your credit effectively restricts anyone’s access to your credit information. For example, it makes it much more difficult for a thief to open a new credit card in your name. This is a great mega breach identity protection measure to take. It’s easy and inexpensive to do, and you can have it lifted if you want to open the access up for, say, a mortgage refinance. For more information about placing a freeze on your credit, see the Federal Trade Commission’s website: http://www.consumer.ftc.gov/articles/0497-credit-freeze-faqs

2) Monitor Your Credit, Statements and Accounts

Monitoring your credit, benefit statements and accounts for suspicious activity is more important than ever for identity protection from a mega breach. Inspect your credit report regularly for items that shouldn’t be there—they could have been opened by an identity thief. Placing a freeze on your credit should make this far less likely, but it’s still possible. You can access your credit reports for free once per year, per repository by visiting www.annualcreditreport.com. Credit monitoring services are available as well, and there are different levels of monitoring, alerts and notification, with varying costs. (Anthem is providing its customers with two years of identity theft repair and credit monitoring services free of charge. See anthemfacts.com for more details). You should also inspect your account activity for suspicious withdrawals, and watch out for notifications from your bank, brokerage, creditors and the IRS. Note: Notifications by means other than the postal service should be viewed with suspicion. Criminals often use e-mail and phone to try to trick you into revealing personal information.

3) Protect Your Information

Keeping your information secure is one of the best things you can do to prevent identity theft. This covers a number of areas:

  • Protecting your computer & devices (See our article, Financial Fraud Is On the Rise)
  • Protecting your passwords and communications (See our article, Internet and Password Security)
  • Protecting paper records – This includes shredding documents with private information. (Be sure and take advantage of our Throw Out Thursdays for free shredding!)

4) Be Prepared for Identity Theft

There’s only so much you can do to prevent identity theft, but you can be prepared if an incident does happen. Federal laws give you the right to dispute fraudulent items, which should help mitigate things like fraudulent credit or purchases. Bank and brokerage accounts have protections in the event of fraud as well. Insurance can be an important tool for reimbursing you for financial losses, and Identity Theft Insurance is also available. However, it may not be necessary if it only covers you for things are already covered by your financial institutions, property/casualty insurance, or credit remediation coverage provided in credit monitoring services. If your identity is stolen, acting quickly is the key to limiting the damage. The Federal Trade Commission’s Theft website http://www.consumer.ftc.gov/topics/privacy-identity recommends these immediate steps:

  • File a fraud alert on your credit report.
  • Notify your bank, investment custodian, credit card companies and insurance companies
  • Create an Identity Theft Report and file a police report

5) Beware of Scams!

Fraudsters use tricks and scams to separate victims from their money. The best defense is to be vigilant, and treat with suspicion any e-mail, phone, mail or in person solicitation that asks for your information. Anything that requires you to pay money in order to receive some benefit, (like Irish or Canadian Sweepstakes winnings), or avoid something negative (like getting your distant relative out of Lebanese prison), is almost certainly a scam. For more, read our blog article, “Avoid These Common Financial Scams.”

For more information about protecting your identity from mega breaches, or if you think you have been the victim of identity theft, please contact us.

About Jon Beyrer

Jon Beyrer, EA, CFP® is a partner of Blankinship & Foster LLC and is the firm’s Chief Compliance Officer. As a lead advisor, he focuses on helping families achieve their goals with sound wealth planning. In the community, Jon serves on several boards and is co-founder of the Professional Alliance for Children, a legal/financial charity for families of ill children. He has been quoted in The Wall Street Journal, The New York Times, and the Journal of Financial Planning. Jon lives in San Diego with his family.

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