Each year, nearly 11.6 million Americans fall victim to financial identity theft, according to the Federal Trade Commission. Thieves use your personal information, such as your Social Security or credit card numbers, to commit fraud – opening fraudulent credit card accounts in your name, creating counterfeit checks, activating cellular devices, or obtaining a driver’s license with your name, but using their picture.
Set up balance alerts through your bank to get an early warning of unauthorized transactions.
Once your identity has been stolen, it can take years to have fraudulent accounts closed, unauthorized transactions reversed, and your good credit – and your good name – restored. To avoid identity theft, follow these seven steps to protect your identity and keep your financial information secure.
- Monitor your credit report and financial statements regularly. Review your financial statements and credit report frequently to look for suspicious activity, such as purchases you didn't make or credit inquiries you don't recognize. By reviewing your free credit report each year at AnnualCreditReport.com, you can also potentially uncover any unusual activity.
- Protect your Social Security number. Don’t carry your Social Security card with you, and only give out your number when absolutely necessary. While credit card companies require the number to run a credit check and open your account, a doctor’s office may let you skip that field on forms.
- Destroy financial information you don’t need to keep. Always shred sensitive financial information you no longer need, such as credit card or bank statements, credit applications, receipts, checks, and expired credit cards. If you do need to keep this type of information, make sure you keep it in a locked and secure location.
- Schedule balance alerts. Balance alerts can serve as an early warning system for unauthorized transactions. These notifications are typically sent via email or text message when your credit card account exceeds a predetermined activity limit. You can set up these alerts through your bank and credit card.
- Be wary when providing information online. Learn how to recognize and avoid common online scams that can compromise your identity. Legitimate banks and businesses will not ask you to provide sensitive information via email or text message.
- Keep passwords private. Be sure to change your passwords frequently and keep the password to yourself.
- Consider identity theft protection. Identity theft protection plans can’t deter thieves, but these plans may reduce the cost and decrease the likelihood of identity theft happening to you. Features of these plans typically include daily credit monitoring, your credit score, an insurance component, and expert assistance in recovering from identity theft.
How to Build for the Future
How can I protect the money I have?
Empower yourself with financial knowledge
We’re committed to helping you be financially successful. Here you’ll find a wide range of helpful information, interactive tools, practical strategies, and more — all designed to help you increase your financial knowledge and reach your financial goals.