Money Management

How to deal with identity theft

In the highly digitalized world, we live in the problem of identity theft is a real concern. The state-of-the-art security systems used by banks and other financial institutions are the favorite targets of hackers are there were some crucial breaches, including the recent Equifax situation which affected 145 million people. If you too think or know that you are a victim of identity theft, what can you do?

The warnings that something is off included unknown usage of your credit cards, unfamiliar charges, denial of medical services due to exceeding the limit and other notifications from IRS regarding tax returns. The real warning signs are calls from debt collectors or a sudden drop in your credit score.

Last but not least, being notified by your providers that they have been attacked or reading about it in the news is the worst way to find out about identity theft.

Here are a few ideas to act on immediately to protect your wealth and your name.

 

1.      Use alerts

Information is power,and the sooner you find out something is wrong you can take the appropriate measures. Start by putting an account usage alert on your phone. Each time there are financial operations you get a push notification. This measure can help you act quickly and freeze an account or reverse shopping.

Next, put a fraud alert on your credit report. Be sure to do this with each of the three major offices: Equifax, Experian, and Trans Union. The initial signal lasts for three months, but it can be extended up to seven years.

2.      Use a credit monitoring system

A step above simple alerts is using a dedicated credit monitoring system. It’s not only a way to prevent identity theft, but to see how well you are managing your finances. It keeps track of some different indicators, such as new accounts, large purchases, collection accounts, and more.

This is an additional layer of security since your identity can be stolen during regular transactions, not only security breaches.

3.      Notify creditors

If you are confident that you have been the victim of identitytheft, you should act fast to minimize damage. First go to your local police to open the case, as this document will be the base for your future actions.

If you live in a state where the police have no jurisdiction on cyber matters, it’s a good idea to talk directly with FTC by filling-in a report on https://www.identitytheft.gov/. They help you create a personal recovery plan and put it into action as soon as possible.

Once you have all this documentation, contact all your creditors and provide them with copies to demonstrate your innocence. Ask them to remove any debt that doesn’t belong to you. You should start contacting your creditors in reverse order, as it is most likely that the identity thief used your data just recently.

Don’t also forget to notify the Office of Inspector General if your social security number is the subject of the identity theft. You can apply to get a new one, with all the associated hustle and bustle. Speaking of changing documents, you might be forced to change your driver’s license or ID card as well.

4.      Change passwords

It’s a good practice to change your passwords anyway periodically, but if you had been the victim of identity theft, then it becomes mandatory. Avoid using the same password for all your accounts. It’s a good idea to use two-factor authentification for all your accounts that are connected to money, payments, and sensitive information. Opt for technologies with automatic refresh and one-time pad approach, so that you don’t have to memorize an additional password, it’s generated on the spot.

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