Daniel Satz, CFP®, MPAS® CRPC®, AWMA®
Prevent Identity Theft
Updated: Mar 10, 2022
Never act on any suspicious emails, letters, or phone calls requesting personal information. Send it to us first so we can review it.
The IRS will never contact you by phone, email, text, or social media. Also, be wary of postal communication.
Don’t store log-in information in your Internet browser. Invest in a password manager such as LastPass or OnePass.
Our firm just finished its annual cybersecurity training. Every year I’m amazed at the number of ways scammers, fraudsters, phishers, and crooks come up with to dupe people out of their money and personal information. We’ve all seen emails from fraudsters and phishers that seem to be using our bank’s or favorite online retailer’s official logo and branding. One of our clients recently received a letter using her bank’s official logo and letterhead informing her: “We noticed some suspicious activity in your account. Please call and verify your account information with us.” Luckily, our client brought the letter to our attention and sure enough, it was a scammer trying to trick her into revealing her online banking information at Wells Fargo.
How did they know she was a Wells Fargo customer? They probably didn’t. Fraudsters just know if they send thousands of letters official-looking letters with the official Wells Fargo logo and letterhead, a decent percentage of recipients will be unsuspecting Wells Fargo customers. The same goes for people who get contacted by fraudsters claiming to be from Amazon, Visa, or the local cable company.
If you think there’s more fraud and identity theft than ever, you’re not alone. The chart below shows just how prevalent this issue has become. As you can see, fraud has gotten even worse during the pandemic. The FTC reports that the most common type of identity theft crime in 2020 was acquiring fraudulent government benefits, such as stimulus payments, PPP loans, unemployment benefits, and EBT/SNAP/food assistance.
According to the annual Javelin Identity Fraud Study, identity theft (i.e. theft of Social Security numbers) costs people $13 billion a year. If you add in the $43 billion for fraud identity scams, that number comes in at $56 billion a year. New Jersey and Pennsylvania both ranked among the top 10 states for identity theft.
Kids and identity theft. When scammers get their hands on a child’s social security number, they can establish a fraudulent “clean slate” to work from to misrepresent themselves. Identity theft experts recommend parents monitor their kids’ credit reports to check for identity theft as often as their own.
Seniors and fraud/scams. Research shows that as we age, we become more trusting (and often lonely). That’s why it’s more difficult for older adults to detect fraudsters.
Millennials. Another statistic that may surprise you is that Millennials, the first digital native, are among the biggest victim of identity theft. Research shows these digital natives tend to be more trusting than other age cohorts about where they put their credit card numbers, social security numbers, and other personal information online. The more soft targets they leave out there, the more likely they are to be hit.
Social media users (all ages). Thanks to social platforms, it’s never been easier for cybercriminals to discover your name, date of birth, phone number, hometown, and other sensitive information. With this information in hand, identity thieves can target victims for phishing, imposter scams, and worse.
Don’t be a soft target
While it can seem like a big game of Whack-a-Mole keeping all the bad guys at bay, there are simple steps you can take to make sure you and people close to you do not become soft targets. Just like purse snatchers, scammers look for the easiest victims they can find. If they find any difficulty, they’ll move on to someone else. Unfortunately, children and seniors are the most common soft targets. Most of these defensive measures below cost little or no money. They just require you to modify your behavior and keep your front (and back) doors locked:
Don’t click on links you see in email, text message, or social media unless you’re 100% sure they’re from a legitimate source.
Freeze your credit through online credit reporting agencies.
Use a password manager such as LastPass.
Enroll in Dual Factor authentication whenever offered.
Shred old documents. (Novi offers a shredding service for our clients).
Secure your home network with strong passwords and encryption.
Cleaning out your browser history (and not store words in your browser).
Let’s go back to Step 2 (Freezing Your Credit). You should always freeze your credit if you don’t think you’ll be needing it in the near future. That way, if a fraudster obtains your credit information, they won’t be able to take out a loan in your name or do anything nefarious with your information. But if you think you’ll be in the process of applying for a loan or buying a house, you can always use one of the free credit reporting sites, such as Credit Karma or Annual Credit Report.com (not Free Credit Report.com).
When it comes to password protection (Step 3) we strongly recommend using a unified password manager such as LastPass. Unless you need an enterprise version, the application is free. No more memorizing hundreds of passwords and special characters. It takes an hour or two to set up all of your accounts, but then you have a single encrypted password to make your online life easier and more secure.
While you can never be completely impervious to fraud or identity theft, you can take steps outlined in this post to fortify your defenses and minimize your chances of being a soft target. If you or someone close to you has concerns about your online security or various accounts, please don’t hesitate to reach out. We’re very experienced in this area and happy to help.
DAN SATZ MS, CFP® is a Wealth Manager at Novi Wealth