Playing It Safe With Your Identity

BY KIPLINGER’S PERSONAL FINANCE © 2014 

KEEPING YOUR DATA SAFE

By Anne Kates Smith

Identity theft has moved well beyond compromised credit cards. Financial consultant Javelin Strategy & Research found that fraudsters are piggybacking on victims’ utilities accounts, running up unauthorized charges on mobile-phone accounts and infiltrating other Internet accounts, such as eBay, Amazon and PayPal. Medical ID theft is a fast-growing offshoot of ID theft that could pose risks to your health as well as your pocketbook.

The good news is that only 14 percent of victims in a 2012 survey by the Bureau of Justice Statistics suffered an out-of-pocket financial loss (most losses are borne by financial institutions and other companies); of those, about half lost $99 or less. Most victims surveyed spent one day or less clearing up problems associated with ID theft. One in 10 spent more than a month.

There were more than 1,000 data breaches in the U.S. last year, exposing more than 500 million consumer records, according to Risk Based Security, a cyber-security firm. A few years ago, it might have been safe to ignore such breaches. Javelin’s most recent data finds that one in three who are notified of a data breach become the victim of identity fraud.

WHAT YOU CAN DO

Your financial data can be hijacked in a number of ways. Be wary of free Wi-Fi hot spots in public places, and never use an unsecured Wi-Fi network to make financial transactions. Use only encrypted Web sites to transmit sensitive information (always look for a lock icon or “https“ at the start of the address). Secure your smart phone and tablet with a password, and use software that allows you to erase the device’s data if it’s stolen. And don’t overlook low-tech precautions, such as shredding paper bills, receipts, insurance forms, credit offers and similar documents.

WHAT YOU SHOULDN’T DO

After news of a data breach, watch for phishing scams, which occur when criminals try to fool you into divulging personal information. If you get an email (or a phone call) that appears to be from an outfit you trust, be suspicious of requests to immediately supply or change your user name, password or other identifying data.

Don’t carry your medical insurance card if you don’t need it. If you must carry a Medicare card, make a photocopy and black out all but the last four digits of your Social Security number. If health-care providers ask for your SSN, inquire about their security precautions.

AND IF YOUR DATA IS STOLEN …

By Lisa Gerstner

Highly publicized security breaches at large retailers have left consumers looking for guidance on how to guard their financial information. We have answers.

SHOULD I REQUEST A NEW CARD?

Asking your bank or credit card issuer to send you a card with a new number is the best way to nip potential theft. It’s an especially good idea if you suspect your debit card data has been stolen, given that a debit card provides direct access to your bank account – and that its liability protections are less than with a credit card. As soon as you get your new card, notify services – say, your electric utility or cable company – that charge automatic bill payments to the card. If you incur fees, explain the situation to the company and ask to have them waived.

IF I DON’T GET A NEW CARD?

Keep close tabs on your bank or credit card account. Log in daily for a few months to check for suspicious activity, suggests Beverly Harzog, a credit card expert and author of Confessions of a Credit Junkie. After that, try to check in once a week.

HOW ELSE COULD I BE SCAMMED?

If a data breach extends to customer names, phone numbers, and email and mailing addresses, you could be vulnerable to phishing scams. If you’re not sure that a message is legitimate, don’t click on any links or provide personal information.

SHOULD I WORRY ABOUT MY IDENTITY BEING STOLEN?

If a retailer offers free credit monitoring, it wouldn’t hurt to sign up. You can also check your credit reports from the three major bureaus – Equifax, Experian and TransUnion – free once a year at www.annualcreditreport.com.

I’M STILL NERVOUS ABOUT ID THEFT. WHAT ELSE CAN I DO?

You could place a freeze on your credit reports as a preventive measure, says Adam Levin, chairman and co-founder of Identity Theft 911. Lenders won’t be able to offer new credit in your name without your permission. A less drastic action is to place a fraud alert on your reports, which requires lenders to take extra precautions to verify your identity before granting new credit.