How to deal with identity theft

Tue, Jun 19, 2012

Financial Advice

The Web has allowed us the ability to manage our finances without ever leaving the house, saving time and money. However, with this added convenience comes a new kind of offence – identity theft.
With identity fraud fast becoming a serious issue for police fraud offices, corporate fraud officers and of course victims, knowing how to care for your personal identity and controlling your financial information is becoming increasingly important. ID fraud occurs when a third party uses a an individual’s financial {information for monetary gain. This can include, but is not restricted to accessing and withdrawing account balances, opening new credit cards, or even applying for a loan or mortgage.

Technological advances have made many things easier over the recent years including opening and maintaining credit cards and bank accounts online, reviewing saving accounts, share saves and other financial accounts through telephone accounts with increasingly complex security such as voice recognition and multi layered passwords.

The impact of the theft can often take thousands of hours of labour, and huge amounts of stress and worry for the victim. In some circumstances the money stolen is never recovered, as the cost of recouping the stolen funds exceed the benefit in recouping.
Fortunately, there are ways to prevent ID fraud from occurring in the first place. Just 5 simple financial safeguards can hugely lessen the chance of your details becoming compromised.

Understand your financial situation

One of the most important things you can do is to keep a detailed record of your financial activity. For me this consists of regular check of my bank statement to make sure that I recognise all of the transactions. If you are a regular budgeter you might find it beneficial to benchmark your actual spending against your bank statements to further highlight any strange transactions. In the event of any problems the sooner you find out and report the fraud – the less stress you will suffer.

Get your statements online

Reducing mail fraud, you can also switch your accounts so you might receive statements online rather than the traditional paper statements. This is simply because paper statements are used as a a form of identification when you apply for a line of credit.
If online statements are not an option, you should definitely invest in a shredder or at the very least secure all your personal information securely in a locked physical file in your home.

Get your anti-virus up to date

This is an obvious one for many, if you are transacting online and your PC is compromised, then you really are asking for trouble as the criminals will have access to all your passwords and personal details. Invest in decent anti-virus and password protect any statements you store on your machine.

Get yourself a password manager

Download a password manager tool and it will be automatically incorporated into your browser, the password manager will automatically create, change and update your passwords with high quality passwords that are much more difficult to break. Which is more likely to be cracked?

Username: Sally
Password: Sally123

Or…

Username: Sally
Password: gg799sfffssNB//@##\112

Many are available totally free and be found with a simple search in Google.

Review your credit record regularly

In the UK you are not automatically notified when a new item is added onto your credit record. This means that you must check manually on a regular basis to make sure that no new account is added in your name via fraud. There are some services that do notify you of a change to your record, but these invariably cost over £50 per year.

If you fail to check on your credit file, you may not realize that ID theft has taken place for months or even years after the initial theft which unfortunately leaves you with little recourse.
By keeping an eye on your credit report and score, you can keep tabs on all open accounts, records and data and know exactly when an account is used without your prior consent.

In summary, as with all things financial – prevention is better than cure. With careful planning and a regular check up, the risk of ID theft can be almost entirely eliminated, protecting both yourself and your family.

Article provided by Sally Stretton at her savings and investment blog.

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