January 24, 2023

Who, me? How to protect against identity theft

Are you covered if your ID gets stolen? Here's how you can protect yourself.

While you may not think it can happen to you, the truth is your personal information can be compromised in the blink of an eye and cause long-term damage. According to the Federal Trade Commission, consumers lost more than $5.8 billion to fraud in 2021, an increase of more than 70% over the previous year.

The most commonly reported category of fraud is identity theft, but the more you are aware of how this happens, the better protected you can be.

How identity theft happens

Whether from shopping, banking or any other online activity where you must submit personal identifiable information (PII), data breaches small and large are top threats.

However, a stolen wallet or purse (containing a driver’s license and credit cards) is often the way identity theft occurs. The same goes for your unprotected digital devices.

Thieves might also steal your mail or dig through your garbage to obtain the information they need to steal from you — your Social Security, bank or credit account numbers, birthdays and more.

Additional risks include:

  • Public and other non-secure Wi-Fi connections
  • Online scams like phishing, smishing or spoofing
  • Phone scams (e.g., being told you’ve won something or are in danger of being arrested unless you hand over information or log in to fraudulent websites)
  • Malware from an email attachment or infected website

 

Look for the warning signs

You should review your credit card statements regularly to look for unfamiliar charges and set up alerts to know immediately if your card was blocked or declined. In some cases, however, it can take months for fraud to become apparent.

Some additional warning signs could include:

  • Surprising changes in your credit scores
  • Accounts on your credit report you don’t recognize as yours
  • Unexpected debt collection notice
  • A bill for services you didn’t use
  • Employment denial due to bad background check (despite having a clean record)
  • Inability to e-file your taxes because they were already submitted

 

Don’t become a victim

There’s no sure-fire way to prevent identity theft but being vigilant and alert can greatly reduce your risk. Here are a few tips.

  • Review your credit at least once a year and be sure they only include accounts that you’ve opened.
  • Understand your credit score and check it regularly, as any unexpected changes should be a red flag.
  • Monitor financial and medical statements and make sure you recognize every transaction.
  • Freeze your credit with Equifax, Experian, Innovis, TransUnion, and the National Consumer Telecommunications and Utilities Exchange. (This prevents unauthorized accounts from being opened, but you’ll have to unfreeze for your own legitimate inquiries.)
  • Use strong passwords and two-factor authentication for all your online and mobile accounts.
  • Think carefully about what you post on social media, so you don’t unwittingly give clues to your security question answers.
  • Use a digital wallet (digital versions of your credit or debit cards) to pay online or in a store.
  • Update your sharing and firewall security settings when on public Wi-Fi, or use a Virtual Private Network (VPN) for added protection.
  • Be wary of emails, texts and attachments that look suspect.
  • Shred receipts, credit offers, account statements and expired credit cards to thwart dumpster divers.
  • Collect your mail daily. You can also sign up for Informed Delivery through the post office, which lets you preview incoming mail to see if anything is missing.

 

How to report identity theft

If you do become a victim, the exact reporting steps will vary based on the type of theft. A good place to start is Identitytheft.gov, which is run by the Federal Trade Commission.

Follow its recommended plan to recovery. You may need to contact your police department, the U.S. Postal Service and the credit bureaus as well.  If your credit account(s) have been compromised go directly to the issuer to cancel. Contact your insurance provider If you think someone has used your health benefit.

The Internal Revenue Service also has a phone line for identity theft, 1-800-908-4490, and a taxpayer guide to identity theft on its website.

This page and the information contained herein is for educational purposes only. The information is not intended to provide legal, investment, or financial advice or to indicate the availability or suitability of any product, service, or strategy to your unique circumstances. For specific advice about your unique circumstances, you may wish to consult a qualified professional. Any links to other websites are included for your convenience only. Bread Financial does not endorse any product or service, and is not responsible for the accuracy or reliability of the information, made available through such sites.