Identity theft has become one of the fastest-growing financial threats facing consumers today. Over the last 20 years, reported identity theft has risen 584%, according to ConsumerAffairs.
With so much of our daily lives digitized, criminals have more pathways than ever to access sensitive information. Social Security numbers, credit card data, login credentials, and even details pulled from social media can be used to impersonate individuals, open accounts, or make unauthorized transactions.
Staying vigilant is the best defense, and a few proactive habits can significantly reduce your exposure.
Secure your devices
Your phone and tablet house much of your personal and financial life. Treat them like the sensitive tools they are.
Consider strengthening your everyday device habits by:
- Using a strong passcode and shortening your auto-lock time.
- Locking your phone anytime it is out of your hands.
- Using dedicated mobile apps for banking and payments rather than your browser.
- Avoiding public USB charging stations, which can be used to install malware.
- Steering clear of public WiFi networks or avoiding logging in to sensitive accounts when you must use them.
Small changes go a long way in preventing unauthorized access.
Strengthen Your Passwords
Weak or reused passwords remain one of the easiest ways for criminals to breach accounts.
To safeguard your digital identity:
- Use a reputable password manager to generate and store strong passwords.
- Enable two-step authentication (preferably using a VIP app rather than text message codes).
- Avoid relying on security questions with answers that can be found online.
- Do not reuse passwords across platforms.
Your passwords are one of your strongest lines of defense. Make them work for you.
Avoid Storing Sensitive Information in Email or on Your Phone
If your phone is stolen or your email is compromised, any stored documents or photos become vulnerable. This includes items like Social Security cards or passport scans.
When you need to store important identification or payment information, use encrypted storage within a secure password manager instead.
Freeze Your Credit When You Are Not Actively Applying for Loans
A credit freeze is one of the most effective tools available. When your credit is frozen, new credit accounts cannot be opened in your name at Equifax, Experian, TransUnion, or ChexSystems.
It is free to freeze and unfreeze your credit as needed, and doing so can shut down one of the most common avenues for identity theft.
Turn on Account Alerts
Most banks and card issuers allow you to set up notifications for transactions, deposits, withdrawals, or spending above a certain limit. These alerts help you catch unusual activity quickly, often within minutes.
Add PINs to Cash-Transfer Apps
Apps like Venmo, Cash App, and PayPal have become part of daily life, but they are not immune to fraud. Adding a PIN or two-factor authentication helps ensure you are the only one who can complete transactions.
Choose Credit Cards Over Cash Apps When Possible
Credit cards offer built-in fraud protections that are much harder to match with other payment methods. Card issuers typically:
- Allow you to dispute fraudulent charges.
- Remove unauthorized transactions from your balance while they investigate.
- Monitor accounts for suspicious behavior.
If you spot any unusual activity, review your credit report to be sure the fraud has not spread to other accounts. All three credit bureaus allow you to dispute errors directly on their websites.
This simple shift in how you pay can significantly reduce the financial impact of fraud.
Review Your Credit Reports, Financial Accounts, and Medical Statements Regularly
A consistent monitoring routine is key to spotting issues early. Make a habit of checking that:
- Your credit report accurately reflects your accounts.
- Every transaction on bank, investment, and credit card statements is familiar.
- Medical bills match services you actually received.
Proactive monitoring can help prevent a small issue from turning into a costly problem.
Consider Identity Theft Protection Services
Even when you are diligent, things can slip through the cracks. Identity theft protection services cannot prevent fraud, but they can help restore your identity and recover losses if it occurs.
Many services offer:
- Monitoring: Oversight of your credit and personal data across multiple sources.
- Alerts: Notifications about new accounts, inquiries, or suspicious activity.
- Recovery support: Assistance reclaiming funds and repairing your credit.
Some plans even include dark-web scanning or social media monitoring to identify risks early.
Your Financial Security Is Worth the Extra Steps
The convenience of digital life is here to stay, and with it comes a new responsibility to manage our online footprint with care. A periodic cybersecurity check can reinforce your defenses and add an extra layer of confidence to your financial life.
If you have questions about how to keep your accounts secure or want to discuss how this ties into your broader financial plan, you can connect with a Carlson advisor anytime through our contact page.
Carlson Investments does not provide tax, legal, or accounting advice. This content has been written for informational purposes only. Always consult your individual tax, legal, or financial professionals for advice tailored to your situation.
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