It’s estimated that more than 17 million Americans are affected by identity theft every year. If the concerns over the latest Equifax data breach come to fruition, that number may increase precipitously. The best way to counteract the threat of identity theft is to prevent it. A secondary layer of protection is afforded by early detection. Below are resources for both.
Identity Theft Prevention
- Credit Freeze (Equifax, Experian, TransUnion, Innovis) - Restricts access to your credit report, making it difficult for identity thieves to open new accounts in your name. This is one of the best ways to avoid fraudulent accounts being opened in your name but comes at a nominal financial cost and inconvenience. Whenever you are opening a new account or applying for something that requires a credit pull, you’ll need to temporarily unfreeze your credit report. Depending on your state, you may be charged up to $15 to freeze and unfreeze your credit. If you’ve already been a victim of identity theft and have filed a police report, the fees will be waived.
- Opt Out of Prescreened Offers - Lets you opt out of receiving pre-approved and unsolicited credit offers in the mail. Credit card companies sometimes offer new lines of credit without pulling your credit report (making a freeze ineffective). A thief, with access to your mailbox, could easily use one of these offers to open a credit card in your name. By opting out of these offers, you’ll not only reduce your volume of junk mail but also reduce the probability of becoming a victim of identity theft. You can opt out for five years using the online form or permanently using the mail-in form.
- National Do Not Call Registry - Significantly reduces the number of telemarketing calls you’ll receive, which lowers the probability of getting scammed. The Federal Trade Commission (FTC) requires all telemarketing firms to check this list every three months and purge registrants from their call lists. This is a free service sponsored by the US Government.
- Call Spam Filter & Blocker - Many of the real scammers illegally ignore the National Do Not Call Registry and often use spoofed phone numbers to make it appear they are calling from a local number. There are a number of apps you can install on your smartphone that use a constantly updating database to alert you when suspicious calls come in and display the information on your Caller ID, so you don’t inadvertently pick it up and fall for the scam. Some popular examples of these apps include Hiya & Truecaller.
- Unique Online Passwords & Two-Factor Authentication - Using the same password for all your online accounts is easy to remember, but puts your entire digital life at risk if even one of those sites gets hacked. A better approach is to use long unique passwords for each site and then store them in a secure password manager. Some of the most popular password managers are 1Password, LastPass, and Dashlane. Another layer of defense is to use two-factor authentication, whenever available. The idea behind this security measure is that to access your account you'll need both something you know (your password) and something you have (your smartphone). After entering your password, you'll be asked to enter a code, either received via text message or through an app on your phone. This greatly reduces the risk of unauthorized access to your accounts as simply knowing the password isn't enough. At the very least you should enable these security measures on your email accounts as that likely represents your most critical access point. If a hacker gets into your email, they can then go to all of your other accounts and click "forgot my password" at which point the password is reset and emailed to your compromised account.
Identity Theft Detection
- Free Credit Reports - You are entitled to one free credit report per year from each of the three nationwide agencies. We recommend requesting only one of the agency reports at a time on a revolving four-month schedule. This will allow you to monitor your credit report throughout the year. Only use the official annualcreditreport.com website to do this. There are many other look-a-like sites that try trick you into paying for your credit report instead. Just remember that you will not need to submit any credit card information to get your free reports. They may try to sell you an add-on to get your credit score - just click “no thanks” and proceed to your report.
- Free Credit Monitoring - There are many services that will monitor your credit for a monthly fee. In most cases, they aren’t providing anything you can’t get for free. One of the most popular services is Credit Karma which pulls credit report information and credit scores from TransUnion and Equifax. According to the company, they do not sell your information, but rather use the information obtained to target you with advertisements for credit cards, or other products that it believes are better for you than what you currently have. Occasionally it may propose something you actually want to consider, but in general, you should just ignore the advertisements while taking advantage of the free and easy credit monitoring and score reporting.
- Free Initial Fraud Alert - If you don’t want to freeze your credit due to the inconvenience or nominal cost, the next best option is to setup a Fraud Alert with one of the three major agencies (they will notify the other two). A fraud alert makes it more difficult for a thief to open an account in your name because it requires the company who is extending credit to first verify your identity by contacting you. However, this is only a temporary measure, as it lasts for only 90 days unless you’ve already been a victim of identity theft or are active duty military.