How to Prevent Identity Theft

Yesterday’s entry focused on the signs of tax return identity theft and course of action to be taken once you realize you’ve been victimized. Identity theft has morphed over the years from a single person breaking into databases to sophisticated overseas identity theft syndicates. There are many warnings against identity theft, but they bear repeating.

• Keep your Social Security Number (SSN) is a safe location, such as a lockbox or a safe. Avoid carrying your social security card in your wallet or purse. Same goes for any documents bearing your SSN.
• Never write your SSN number on your check, even if the merchants asks for it. When filling out job applications that request your SSN, leave the field blank, or write “SSN to be furnished at time of hire” if you are using a paper application. Some online applications will generate an error code if you don’t provide your SSN while others will let you move to the next section without it.
• Update your antivirus software and firewalls often. Install updates as soon as they are available. Those pop-ups advising us to download the latest browser update or software patches are annoying, but take the time to update. At the same time, never download an update from an unknown vendor. If you don’t recognize it from your software vendor, do not download it.
• Change your passwords often and use strong passwords, which have a combination of upper case/lower case letters, numbers, and symbols.
• Never provide personal or financial information over the phone unless you initiated the conversation.
• Store sensitive information from your computer on an external drive and safely store that drive when not in use.
• Log into your online banking portal often to check for unfamiliar transactions. Report any suspicious transactions to your bank’s fraud unit immediately.
• Monitor your credit report at least once a year. Report any accounts under your name that don’t belong to you and take steps to close those accounts.

Identity theft has far-reaching consequences beyond a bogus tax return filed under your name and SSN. Your good credit rating and financial standing can be ruined and you are faced with the task of untangling the mess with the IRS, credit reporting agencies and your bank. By taking a proactive approach to protecting your sensitive personal and financial information, you can reduce your risk of identity theft.