We have an amazing amount of technology, information and convenience right at our fingertips. Of course, so do hackers, identity thieves, and credit scammers. Just as it’s never been easier to work, shop, and socialize online, it’s never been easier for bad actors to use these activities against you. Identity theft is a real danger, and it’s more commonplace than you know.
According to USA.gov, identity theft “happens when someone steals your personal information to commit fraud. The identity thief may use your information to apply for credit, file taxes, or get medical services. These acts can damage your credit status, and cost you time and money to restore your good name.”
Indeed, identity theft can ultimately lead to some pretty devastating consequences by severely damaging your credit rating, draining your bank accounts of cash, and even causing harm to your professional or financial reputation. While you may be able to restore all of these things, it may come at no small cost of time, effort, and money. Of course, you could avoid all of this hassle and heartache by taking smart preemptive steps to protect your identity and your money.
For many consumers who are concerned about the risk of identity theft in online shopping, cryptocurrency has proven itself a promising solution. If you’re interested in learning how transactions on the blockchain can protect you from from fraud and identity theft, check out these 10 Reasons to Invest in Cryptocurrency.
Or, for tips on how to protect yourself against identity theft while making transactions through traditional methods of commerce, read on…
1. Sign Up for a Credit Monitoring System
Vigilance is the key to protecting yourself against fraud and identity theft. Fortunately, there are countless credit monitoring services available to you entirely for free. Companies like Credit Karma and Free Credit Report offer easy sign up and free access to information regarding your credit history and your all-important FICO credit score. In addition to arming you with this valuable information, most credit monitoring services will provide you with alerts any time suspicious activity, data breaches, or compromised passwords place your accounts or identity at risk.
You’ll also be able to review the full spectrum of your accounts, which is a great way to determine whether or not anything looks out of place. If you see any accounts you don’t recognize, spending activity that you don’t recall, or delinquencies that don’t belong to you, your identity might have been compromised. Signing up for one of these services puts you in a position to act fast when this occurs.
And there’s no risk to your credit rating either. According to U.S. News & World Report,, “Accessing your credit reports won’t lower your credit score, and you can easily request them online. Also, the bureaus provide tools to help you monitor your credit, such as alerts to notify you of key changes. Ideally, pull your report from the bureaus at different times throughout the year so you are continually monitoring activity.” In fact, as an added bonus, most credit monitoring services offer numerous resources and pathways to improving your credit rating over time.
2. Stay on Top of Your Snail Mail
You know all those annoying credit card officers that jam up your mailbox? No, not the stuff in your SPAM folder. We’re talking about the paper envelope offers in your actual, physical mailbox. The original SPAM. You probably have no intention of opening most of these offers. But a scammer practiced in the art of old-fashioned print-based identity theft may have every intention of opening them and creating accounts in your name.
The good news is that there’s a really easy fix for this one. Literally, just take your mail in promptly. If you’re out of town, ask a neighbor to do it for you. Don’t leave your junk mail sitting around. Bring it in and discard it safely. One man’s trash is another man’s treasure. In this case, the other man is just a guy pretending to be you.
3. Shred Personal Documents Before Discarding
As long as we’re on the topic of discarding mail, let’s talk about shredding. A shredder is a very affordable item and one that no home should be without. You can buy a small wastebasket-sized shredder and keep it under your desk. Before you throw away anything containing personal information—credit card offers, old bills, outdated bank statements—run them through the shredder. Very few identity thieves have the patience to tape your confidential documents back together strip by strip.
4. Always Review Your Statements
Whether you get your monthly statement through the mail or through an online alert, make sure you check your credit card and bank statements every month. In most cases, you’ll also have the ability to monitor your account through an online portal. Generally speaking, it’s a good idea to visit this portal regularly to keep an eye on your purchases, balance, and payment due dates.
But it’s also an important way to flag suspicious activity, unfamiliar purchases, or incorrect charges. The sooner you identify illicit use of your accounts, the better your chances will be of preventing it from snowballing into a full-blown case of identity theft. The same is true of any accidental or inaccurate charges created by vendors or even by your credit card provider. Spot these mistakes and address them before they get lost in the shuffle. Any time you drop by your online account to check a payment due date or make a payment, take a few extra minutes to review the most recent series of listed transactions. Contact your bank or credit card provider if anything seems off.
5. Don’t Fall for Phishing or Spoofing Scams
The internet is a wonderful place full of information, ideas, and innovations but it’s also a horrifying cesspool of hackers, scammers, and fraudsters. The best thing you can do to protect yourself is to recognize a scam when you see it. Understand the tactics used by identity thieves, recognize the red flags, and be sure that you aren’t a victim.
Nerdwallet notes that, with phishing, a scammer will “try to get you to disclose personal data, such as credit card numbers, Social Security numbers and banking information, by sending an official-looking email.” “Spoofing,” Nerdwallet explains, “involves doing much the same thing with caller ID, so that the number appears to be that of a trusted company or government agency.”
Be extremely careful about how, where, and to whom you give your personal information. Recognize the most common indicators of phishing from entities claiming to be account managers, government agents, or otherwise operating in some official capacity. If you receive an email or text riddled with spelling mistakes, grammatical errors, inconsistent URLs, awkwardly phrased salutations, threatening phrases or suspicious attachments, it probably didn’t come from your bank. Don’t open it. Flag it as SPAM.
6. Create Strong Passwords and Don’t Share Them With Anybody
You know those really popular viral quizzes on social media that are like, “hey kids, let’s all share our middle name, favorite pet, original home address, city of birth, mother’s maiden name, and favorite high school teacher with one another…y’know…for fun?” I assume I don’t have to tell you that these quizzes are harvesting information that can be used to crack your password. Well, not specifically your password, but the password of anybody kind enough to share just the right combination of information.
I won’t tell you how to engage on social media, but the lesson here is really about password design. According to U.S. News & World Report, “The FBI and National Institute of Standards and Technology recommends creating passwords with at least 15 characters because these are more difficult for a computer program or hacker to crack. As for security questions, the FTC advises selecting questions that only you can answer, instead of information that could be available online like your ZIP code, birth place or mother’s maiden name. Also, avoid giving generic responses, such as ‘chocolate,’ as your favorite dessert.”
The strongest passwords, generally, are those composed of either a completely random series of numbers, letters, and symbols or those composed of randomly sequenced and selected words. If you’d prefer to use something you can remember, try using an odd phrase that only has meaning to you. Once you’ve done that, you can overshare personal information on social media as much as you want without risking your identity or credit rating.
7. Use a Digital Wallet
Because strong password management is an important component of your security strategy, it may help to use a digital wallet. According to Investopedia, “A digital wallet (or e-wallet) is a software-based system that securely stores users’ payment information and passwords for numerous payment methods and websites. By using a digital wallet, users can complete purchases easily and quickly with near-field communications technology. They can also create stronger passwords without worrying about whether they will be able to remember them later.”
In addition to providing an extremely convenient solution for all your purchase, payment, and processing needs, the digital wallet carries far fewer risks than an actual wallet. For one thing, the data associated with your accounts is encrypted, as opposed to the information that is readily visible on a physical credit card. This means nobody can see your information when you make purchases. For another thing, you’re a lot less likely to drop your digital wallet on a train, setting off a mad scramble to cancel and reorder every debit and credit card you’ve ever owned. Top providers of digital wallets include Google Pay, Apple Pay, and Venmo.
8. Be Cautious About How You Use Your Smartphone
Your mobile device may be smart, but it’s also extremely vulnerable to security breaches and malware attacks. According to Nerdwallet, we seem to implicitly understand the risk that we carry in the palm of our hand, and yet 48% of surveyed consumers indicated that they don’t even use a password to lock their home screen. This lock-screen password is only square one for protecting your phone from intrusion in the event that it has been lost or stolen.
But there are other important ways to minimize the risk posed by your own phone. Among them, use mobile apps rather than web browsers any time you access sensitive information on your phone. These apps are designed with security features tailored to address vulnerabilities unique to the mobile consumer experience.
Speaking of which, don’t ever charge your smartphone into a charging port at an airport. This is one of the easiest ways to find yourself on the receiving end of a malware attack. Caleb Barlow, vice president of X-Force Threat Intelligence at IBM Security, is quoted as saying that “Using a public charging port at an airport is like ‘finding a toothbrush on the side of the road and deciding to stick it in your mouth.’ That’s a pretty gross simile, but we get the point. You have no idea who else has been inside that port. And according to Nerdwallet, this makes every port ripe for hacking. Just by plugging in, you may expose yourself to viruses or malware that can transfer the data on your phone directly into the waiting hands of a hacker. If you’re worried about the juice in your phone battery, buy a portable charging pack instead.
9. Be Cautious When Using Public Wi-Fi
Speaking of easy ways to fall victim to a hacker scheme, public Wi-Fi is basically a playground for identity thieves. Any time you jump onto an open network in a coffee shop, doctor’s office, or hotel, you make yourself vulnerable to attack. Nerdwallet warns that “Hackers may be able to see what you are doing when you use free public Wi-Fi. Don’t use public Wi-Fi for shopping, banking or other sensitive transactions. If you choose to use public Wi-Fi, use a virtual private network service to create a secure connection.”
Remember, if you can get into this wireless network without a password, so can everybody else. Also keep in mind that, if you leave the Wi-Fi setting switched on, your smartphone may automatically sign you into any freely available Wi-Fi network that you might pass through. In the absence of a secure or trusted network, make sure you turn this setting off as you wander through the world. Otherwise, you may be constantly and unwittingly slipping in and out of the crosshairs.
10. Use Cash When Appropriate
After all these years, one of the safest ways to make a transition is still cash. Cash contains no personal information, leaves no trace, and as a bonus, it can’t suddenly be drained from your bank account by a hacker. Any time you’re making a physical transaction for a small sum in an unfamiliar context, you might want to consider cash in lieu of pulling a card from your purse or wallet.
If you’re shopping in an unfamiliar city, buying some necessities from a shady bodega, or grabbing a sandwich at a lunch truck, using cash will reduce your likelihood of sharing sensitive information with the wrong person. And if you’re shopping online, you can get the same basic result from cryptocurrency, which provides a pathway for secure trustless transactions while retaining the privacy and security of both parties.
There are actually a number of good reasons to use cash in day to day transactions even beyond security. For more, check out our feature Why You Should Always Have Cash on Hand.