Preventing Online Identity Theft: 4 Ways To Protect Yourself
With just a few taps on a keyboard, you can easily make a purchase or sign up for a new subscription or service online. However, each of these transactions often involves the exchange of sensitive personal datavaluable information that’s ripe for cybercriminals to try to exploit.
Online identity theft has become more widespread, especially as school, work and even healthcare rapidly shifted online during the pandemic. According to data from the Federal Trade Commission, reports of identity theft surged 45% in 2020 compared to 2019, with 4.72 million fraud reports up from 3.24. With the threat growing and the possible avenues for attack multiplying, it’s more important than ever to understand the risk of online identity theftand what you can do to protect yourself.
How To Protect Your 401 From Cyber Crime
To a cyber criminal, the 401 industry looks like a big candy store with over $5 trillion in liquid assets and largely automated systems. Armed with your name, social security number, date of birth, address, and any personal information available on social media, your 401 account is vulnerable. Not surprisingly, since these large-scale data breaches have occurred, industry insiders report a sharp increase in the number of attempts to steal 401 assets.
Sophisticated criminals, with little fear of being caught, use stolen personal data to gain access to your account. Once successful, they change your contact information on file, then pose as you to your plans help desk asking to withdraw or borrow money for some imaginary emergency. They request the money be wired to a domestic bank account and then quickly move the money offshore, never to be seen again.
You dont have to stand idly by merely hoping your savings are safe. There are steps you can take to protect your 401 assets.
Check your account regularly.
Make sure your 401 service provider can connect with you. Youre looking for any unauthorized activity. This includes any changes to your contact information. All current 401 record-keeping platforms attempt to notify the account holder when changes are made to their contact information.
This is why you want to make sure they have either a phone number or email address to contact you when any changes are made to your account.
Beware of phishing scams.
Types Of Identity Theft Protection Services
Identity theft protection companies help you monitor your private information across the internet and spot scams early on.
These are some of the most common features providers offer:
ID theft protection services monitor your from one or all three major credit bureaus Experian, Equifax, and TransUnion depending on the service plan you choose. They alert you to any changes in your personal and financial information such as a new home address or loan application, and so can help you detect fraud before it impacts your credit report.
Some credit repair services will assist you in the process of recovering your ID, and insure you against losses arising from ID theft and related fraud. .
ID theft protection services monitor websites, the dark web, databases and criminal or public records for signs that your personal information is being shared or used by fraudsters. They usually track your Social Security number, drivers license, passport, home address, email, phone number and bank accounts.
For example, an ID theft protection company will notify you if your Social Security is used to file a suspicious tax refund or if your email address and password were exposed in a data breach and are now available on the dark web.
Identity recovery services
You can also submit a . However, hiring a company to do so can save you some time and effort.
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Safeguarding Your 401 Account
When people hear about hackers getting access to card numbers and other personal information, they probably worry about identity theft or fraud to their bank accounts and credit cards. However, in this scenario, it is important that people also ensure the security of their retirement accounts.
How Can You Protect Your Account?
If you are a participant in a 401 plan, there are steps you can take to protect your savings. For example, you can start by monitoring your account. One reason 401 plans are becoming a target for hackers is that many participants dont check their accounts very often. Also, many are unaware of their balances and of any activity. You do not have to check your accounts daily, but it is important to review your 401 account periodically. Look for any unauthorized activity, such as loans or withdrawals, and confirm that your home address, phone number, and email address are all correct and current as well.
Another way to keep your 401 account secure is to change your password regularly. Make sure it is strong by using uppercase and lowercase letters, numbers, and symbols. Also, use a password that is different from others you use for your accounts. Some plan providers use a multifactor authentication process, where participants get a code sent to them by email or text, to allow online account access. They may also alert participants of any online account changes by regular mail or using a verified email address.
Use A Separate Secret Phone Number
This is tough but necessary medicine.
Just as a crook who knows your phone number can impersonate you and convince your cellular provider to make changes to your cellular account, a crook could call a financial services provider and impersonate you in an attempt to access your retirement account.
If the crook did a SIM swap and thus appears to be calling from the phone number that is associated with your retirement account, that crook might be able to convince the financial services provider to give them access to your retirement account.
One way to thwart this type of identity fraud is to give your financial services provider a different phone number that you keep secret by not using it for anything else. Sound like overkill? Remember, a good chunk of your life savings could be at stake if someone is able to dip into your retirement account and clean it out.
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Simple To Ways To Protect Yourself
- Never carry your Social Security card in your wallet or purse. Always leave it at home in your safe.
- Make sure your Social Security number is not on your drivers license or other ID.
- Also, never carry more than one or two credit cards with you. If you have more than two credit cards, leave the rest at home in your safe. That way, if your wallet or purse is stolen, when you call and cancel the stolen credit cards you still have other credit cards in your safe that you can use.
- Once you realize your wallet has been stolen, immediately call and cancel the stolen credit cards.
- Next, call the police and file a report. Do this before you even get home if you can. As soon as you get home, notify the three credit bureaus that your wallet has been stolen and give them the information from the police report. This will enable them to add a 90 day freeze to your credit. You can extend this freeze later, but the main thing is you want to do is contain any damage that may happen on the day of the theft.
Next Steps To Consider
Fidelity does not provide legal or tax advice. The information herein is general and educational in nature and should not be considered legal or tax advice. Tax laws and regulations are complex and subject to change, which can materially impact investment results. Fidelity cannot guarantee that the information herein is accurate, complete, or timely. Fidelity makes no warranties with regard to such information or results obtained by its use, and disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information. Consult an attorney or tax professional regarding your specific situation.
FidSafe is not a Fidelity Brokerage Services LLC service. FidSafe is a service of Fidelity Wealth Technologies LLC, a Fidelity Investments company, located at 245 Summer Street, V8B, Boston, MA 02210.
The third-party trademarks and service marks appearing herein are the property of their respective owners.
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Are 401s Vulnerable To Cyberattacks
Take action to safeguard your 401 from increasing risk of cyberattack. The United States federal government provides tips for how to help you and your employer protect your retirement savings. Choosing an Allstate Identity Protection plan with 401 reimbursement can also be a smart move to help protect your finances. Plus, with financial alerts triggered by account activity, we can help you spot and resolve potential fraud fast.
How are you saving for retirement?
More than 100 million Americans rely on employer-sponsored retirement savings plans like 401s. In the process of using these benefits, enrollees share highly sensitive details such as names, Social Security numbers, and bank account information with plan providers and administrators.
If youre one of them, you may have wondered what happens to that information once its collected. How is it stored and secured?
Unfortunately, it may not be safeguarded carefully enough. A 2021 federal watchdog report warns that some 401 investors and their affiliates arent adequately protecting personal information, putting plan holders privacy and life savings at risk.
Read on to learn more about whats at stake, plus how Allstate Identity Protection can help companies and individuals protect what matters most now and in the future.
Protect Your Phone Service
Your phone has become an important part of security protocol and is the “master key” to accessing online accounts and information.
Criminals and scam artists are actively using stolen identity information to port your mobile phone number, or forward your phone calls and text messages. They do this by calling phone service providers. If you use Voice over IP phones then your voice phone portal accounts are also at risk.
Cybercriminals do this to steal your 2-factor authentication codes and text messages to get into your financial institution accounts.
- Learn signs that your phone may be hacked. If you notice your mobile phone showing “no service” or “emergency calls only,” or you stop receiving phone calls and text messages even after you restart your phone, contact your mobile company to see if your account has been compromised.
- Ask your telecom provider about ways to better secure your account, especially verifying your identity with a PIN or 2-factor authentication to make changes, route phone calls, forward phone messages, or port your phone number.
- Secure your online phone and internet service provider account where you pay bills and manage settings. Use a separate and strong password for such accounts and enable 2-factor authentication on these accounts.
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How To Report Identity Theft
If you do discover your identity has been stolen, you want to act quickly so you can stop any further damage and get things resolved as soon as possible. Here are the steps you can take:
- If you notice the odd transactions on your bank account or card, call the companies and alert them immediately. They can often freeze your card and flag the suspicious transactions.
- Contact the three main Experian, Equifax and TransUnion and place a fraud alert on your credit. This means that anyone who tries to open a new card or take out a loan will get flagged.
- Contact the Federal Trade Commission and open up a claim. You’ll be able to log your complaint and then get a recovery plan.
Determine if you want to contact local authorities. Depending on the type of theft, you might want to file a police report. From there, it can often be a waiting game, so you’ll want to follow up on a consistent basis as you move through the process.Protecting your identity is vital. Learning how to protect yourself now can save you a lot of headaches and hassles later. For more information on how to protect yourself, visit the Federal Trade Commission’s website.
Learning Center articles may describe services and financial products not offered by Protective Life or its subsidiaries. Descriptions of financial products contained in Learning Center articles are not intended to represent those offered by Protective Life or its subsidiaries.
Dont Share Personal Information Online
Do not share personal information online or with any person you do not know personally and trust.
If you are asked for personal information in an email, a pop-up, or a website, and you cannot verify why it is needed, then it is likely a scam.
In addition, you should never be asked for personal information from a business or company that should already have it.
For example, a bank should never ask for your account number or debit card number in an email.
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The Two Common Characteristics In Every Financial Fraud Attempt
With such a high level of sophistication, combined with our busy lives, how can we recognize fraud when it is so convincing?
Thankfully, there are two common characteristics prevalent in nearly every fraud attempt, which are as follows:
First, the thieves must obtain some form of personal information from you, which typically involves the following:
- Account Number,
- An existing Security Word, PIN, or Password, and
- Even a One-Time Password.
- If you receive a one-time passcode you did not initiate, please do not provide the code toanyone who contacts you requesting it.
Second, the thieves always create a sense of urgency. They put pressure on you to act now such as:
- Login to your accounts NOW to prevent further damage!
- Text us back IMMEDIATELY!
- Call this number AS SOON AS YOU CAN!
How To Protect Yourself From Identity Theft
Identity theft affects about one in 20 Americans each year, according to Experian. The penalties for committing identity theft can range from fines to up to 15 years in prison, depending on the severity of the charge. However, not many cybercriminals are ever caught, due to the anonymity of internet backchannels.
Its important to have a robust security plan around your accounts to protect yourself from being a victim of identity theft. With the right preparations, identity theft is a mostly avoidable crime. However, in some cases, such as a data breach from an institution you work with, your information may be compromised, despite the steps youve taken to protect yourself.
Whether youre a victim of direct identity theft or a data breach, there are several ways you can reduce personal costs, even if you never see legal justice. There are certain insurances and programs you can invest in that can help in the event of identity theft.
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Online And Phone Scams
According to the Federal Trade Commission , Nearly 90% of reports filed on behalf of people 80 and over were about a scam that started with a phone call, with median reported losses of $3,800 in 2019. Additionally, the FTC estimates there are nearly 2.4 billion robocalls made each month with messages of owed money. Adults over the age of 60 are typically more vulnerable to scams, and therefore the ones most likely targeted by these phone calls.
If youre actively making unregulated investments, such as cryptocurrency trades, its important to be vigilant in determining the legitimacy of coins and investment opportunities. Cryptocurrency can be incredibly rewarding, but also incredibly volatile, making it a prime avenue for scammers to get ahold of your money or personal information.
Online Fraud Prevention Tips
The sad truth is that many people do not take online fraud prevention tips seriously until after they have been a victim.
No one wants their identity stolen or their bank account hacked.
But its happening more and more every day.
According to the Insurance Information Institute , In 2020 through April 10, the ITRC tracked 269 breaches that exposed 3.3 million records.¹
Not only is online fraud dangerous to our personal wallets, but it is also dangerous for our economy.
III reports, McAfee and the Center for Strategic and International Studies estimated the likely annual cost to the global economy from cybercrime is $445 billion a year, with a range of between $375 billion and $575 billion.²
If we dont take steps to protect ourselves online and follow the online fraud prevention tips listed below, then we put ourselves in a dangerous position.
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Know The Potential Dangers
One of the most important online fraud prevention tips is to gain a clear understanding of the types of fraud and their potential dangers. You have probably heard some of the below terms before, but lets take a minute to define the main types of online fraud.
Its easy to set up online banking and bill pay, and then forget about it. But you absolutely must monitor your accounts and do so frequently.
This wont necessarily prevent online fraud from occurring. However, if you notice discrepancies in a report or a charge to your debit card that you didnt make, you can quickly freeze your credit or contact your bank to potentially prevent more damage from being done.
How We Chose The Best Identity Theft Protection
We evaluated each providers monitoring services, additional tools and features, reimbursement policies, and customer service in order to establish which companies offered the best identity theft protection services. We determined that, in order for a company to be considered the best, they needed to offer the following services:
- Comprehensive identity theft monitoring: We preferred services that offer daily credit checks, dark web surveillance, and bank and credit account monitoring.
- Alerts: The best identity theft protection services are those that send you real-time alerts via email and SMS text messaging when breaches are detected. All the companies we chose have iOS and Android mobile apps to make communication easier.
- Identity Restoration: The best identity theft protection services have experts who guide you through the identity restoration process, contact financial institutions and government agencies on your behalf and include fraud insurance, which can reimburse you for legal fees.
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