Personal Insurance

Recognizing and Preventing Identity Theft

Identity theft, identity, insurance, prevention, risk

Most consumers have heard about the recent data security breach involving Target department stores, in which payment card information from 40 million customers was stolen and additional personal data from as many as 70 million others was compromised. While the fallout from the resulting credit card fraud will be immense, the potential damage from identity theft committed using the stolen personal information may be even larger.

According to a study published last month by the Bureau of Justice Statistics, seven percent of all Americans over the age of 16 were victims of identity theft during 2012—and the problem is getting worse, not better. For those whose identities are stolen, nearly 30 percent spend a month or more working to resolve the problem.

Part of the difficulty with identity theft is that it is often difficult to detect. Here are some of the most common indications of identity theft, according to the Federal Trade Commission:

  • Unexplained bank withdrawals or credit card charges
  • Not receiving bills, bank statements, or other expected mail
  • Inexplicable calls from debt collectors
  • Bills for medical services you didn’t receive
  • Your personal checks are refused by businesses
  • Your health insurer rejects claims because your benefits limit has been reached or because of a medical condition that you don’t have
  • Notification from the IRS that more than one tax return was filed in your name or that you have income from an employer you don’t actually work for
  • Receiving notice from your employer or from a company with which you do business that your personal information was exposed, stolen, or otherwise compromised

If any of these warning signs apply to you, you will want to take action quickly.

The best way to protect against unauthorized use of your identity is to take preventative measures to protect yourself. There are many things everyone can do to help limit the risk of identity theft:

  1. Practice document control. Don’t carry documents or papers that you don’t need. There’s no reason to give identity thieves a chance to snatch your passport, social security card, checkbook, or other important documents. Be careful where you leave your wallet or purse, and respond quickly if your personal documents are lost or stolen.
  2. Enhanced digital security. Avoid using the same password for multiple online accounts, and use strong passwords1 that you change frequently. If you shop or do other transactions online, do so only through websites that you know and trust. Also, never provide personal information if you don’t have to, and be suspicious of e-mails you might receive asking you to “verify” your personal information or login credentials. Be sure to use good anti-virus, anti-spyware, and firewall software to help protect home and business computers.
  3. Be information security savvy. Whenever possible, avoid giving any personal information over the phone or via e-mail or text message. If someone calls you and claims to be from a bank or government agency, don’t volunteer any information. Instead, hang up and call a published number for that agency.
  4. Be careful when you are social. Adjust the security settings on your social media accounts so that important information such as birthdates will not be visible to strangers. Even seemingly innocuous posts can cause trouble. For example, announcing that your entire family is travelling to Hawaii for a week could give thieves a golden opportunity to break into your house and take both your property and your personal data.
  5. Don’t trash your identity.  Any paper documents containing sensitive personal information should be shredded or incinerated. If you sell or dispose of an electronic device that may contain personal data, be sure to clean off all of your data2 before you do so. When getting rid of an old computer, either wipe the hard disk3 or remove the drive altogether before you sell it or otherwise dispose of it.
  6. Pay attention to your credit reports. As a consumer, you have a right to receive a free copy of your credit report4 from the national credit reporting agencies: Experian, Equifax, and Transunion. Print a copy and examine the reports for anything that might look suspicious. If you stagger your requests, you can actually get an updated report every four months. Be sure to shred or safely store the paperwork you receive from the credit bureaus.

Obviously, even the most careful consumer can fall victim to identity thieves, as the Target breach and other recent data security incidents have shown. If you believe your information has been compromised, the FTC has some important recommendations for repairing the damage and recovering your good name. In addition, you can check out the accompanying article in this newsletter for ideas.  Taking adequate precautions and responding quickly to warning signs can go a long way toward keeping your personal identity safe and secure.

For additional tips on protecting your identity, visit these sites:

1 http://www.wikihow.com/Create-a-Password-You-Can-Remember

2 http://www.wikihow.com/Delete-Cell-Phone-Memory

3 http://www.popularmechanics.com/technology/how-to/tips/how-to-wipe-your-computer-before-you-sell-it-15780981

4 http://www.consumer.ftc.gov/articles/0155-free-credit-reports

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