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How to Protect Your Financial Identity

Written by prositesfinancialMar 15 • 3 minute read

Identity theft, data breaches, and fraud affect millions of people in the United States each year. Financial identity thieves seek to obtain and use your financial data to steal your money or commit fraud. They can use your personal data to apply for loans or credit cards in your name, rack up purchases, raid your bank accounts, or rent apartments or vehicles. They can also file fraudulent health insurance or tax return claims or sell your personal information to other people. That is why it is crucial to be cautious with all your financial information, both in the real world and online.

The best way to protect yourself from financial identity theft is by learning how it may occur. From there, you can enact measures that will lower your risk. Although there is no 100% proven way of preventing financial identity theft entirely, you can make it difficult for criminals to access your personal information and bank accounts.

Here are some effective strategies to protect your financial identity:

Password-Protect All Your Mobile Devices

Studies by cybersecurity firm Kaspersky Labs show that 52% of Americans do not password-protect their devices. Not having a password on your tablet or smartphone is like leaving your home with wide open doors. If your device falls into the wrong hands, your financial accounts, email, and other private information stored on these devices will be easily accessible.

Be Vigilant for Phishing Attempts

Avoid clicking on suspicious-looking links in text messages or emails. In phishing, identity thieves utilize websites and emails that look like they are coming from your mortgage lender, credit card company, bank, or other financial institutions to trick unsuspecting people into entering their account data and additional private information. Opening the attachments will install harmful malware into your devices, making you an easy target for financial identity theft. If you feel a link is not legitimate, avoid clicking on it or typing your username and password on unfamiliar login screens.

Check Credit Reports Regularly

Credit reports include activities on the financial accounts that are in your name, including the last reported balances. Therefore, one of the best ways to spot discrepancies is by checking your credit reports regularly. If you detect anything suspicious early, you can take action and address the problem more quickly and prevent it from worsening. You can get free copies of your credit report from a number of online resources—just ensure the site you choose is reputable and trustworthy.

Review Bank and Credit Cards Statements Regularly

Credit card fraud is the most common type of financial identity theft. That is why you must regularly check your bank and credit card statements for unfamiliar transactions. These may be the small transactions that a thief will make to determine whether you will notice. If neither you nor the financial institution notices, the thief will try making larger purchases. You can protect your financial identity by ensuring you check these statements routinely.

Avoid Giving Out Personal Data Over the Phone

Fraudsters regularly pose as credit card companies or bank employees over the phone. Always remember that no legitimate organization will call clients to ask for their personal financial information, such as their Social Security number, credit card information, or bank PIN. If you get a call that appears legitimate, always ask for the caller’s credentials and immediately contact the organization using the phone numbers on your bank statements.

Protect Personal Documents

If not correctly handled, physical documents can become a security risk. These documents may contain information that fraudsters can use to steal from you, for instance, bank account information and your Social Security number. You can protect yourself by ensuring that no mail is left in the mailbox and ensure your financial records and statements are shredded rather than ending up in the trash can. You should also avoid leaving paper trails of retail receipts, credit cards, and ATMs around.

Defend Your Financial Wellbeing

Identity thieves usually strike when you least expect it. Therefore, you should never take the safety and security of your personal information for granted. Taking steps to protect your identity and personal information will make you a more difficult target for thieves and will stop them from targeting you. Monitoring your credit, protecting your financial accounts and devices, and ensuring your documents are safe will help you enjoy peace of mind knowing that all your personal data is secure. Your ultimate goal should be building effective barriers that will discourage identity thieves from attempting to victimize you.

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