FAQ - Identity Theft

Listed below are some of the questions that I’ve received recently regarding financial planning in general, my practice, and investing in general.

Q: I hear a lot about Identity Theft. What can be done to reduce the risks?
A: Several things can be done to reduce your exposure to risk of Identity Theft. Among them are:
1. Keep good records of your credit card numbers, contact information, and other important numbers. A photocopy of the card, front and back, should be kept with your other important records.
2. Safeguard your information. Keep your Social Security number to yourself, and only use it in absolutely necessary circumstances with absolutely trusted parties.
3. Never give out your credit card information to someone who calls you. If it is a necessary transaction with a trusted vendor, get a return number and call them back before handing over information.
4. Watch your mail for regularly-scheduled bills. If one is missing, track it down immediately. Oftentimes these bills contain all of the information that an identity thief needs to take over your financial life.
5. Shred your financial documents before sending them out with the trash. A recent study by a credit reporting agency determined that nearly three quarters of all households casually throw away documents with full name and address, while 40% put out documents with full credit card account information included. “Dumpster diving” has become one of the favorite methods of identity thieves for getting at your information.
6. Monitor your credit report. You should get a full credit report at least annually, and since this still leaves a perpetrator 12 months between your checkups, you might want to consider an alert service, such as the one at www.privista.com. This service will notify you any time a new account is opened under your name, as well as when a surprisingly large purchase is made on one of your accounts.
7. Be aware. It pays to do everything in your power to eliminate the potential for identity theft. Be careful when handling your card(s), ensuring that you don’t inadvertently leave one behind or leave vital information where someone else can get to it. These folks will go to great extremes to get your information, because it can be very lucrative to them. A single case of identity theft can result in thousands of dollars going into the hands of an unscrupulous individual, while your good name and credit score go down the tubes.