Last Week’s Question of the Week: How much will the average retiring couple at age 65 spend on health care during their lifetime? Is it $200,000 or almost $400,000?
ANSWER: Almost $400,000!
HOST: Your topic today is very relevant when it comes to our finances; identity theft. What do we need to know?
KLAAS FINANCIAL: This is an area that makes us all uneasy. This topic is really timely! Case in point:
Last month I received a debit card in the mail from a bank that I don’t have an account with. As it turns out, someone had stolen my identity and applied for unemployment benefits in the state of Colorado, a state I have never lived in or worked in. Nor am I unemployed. I spent about 3 minutes researching this only to find out this scam has been in place for the past 4 months.
According to an NBC news report this week: Over $1 billion in unemployment aid is currently being threatened by fraud nationwide as a result of the Pandemic, aid that was launched to help unemployed Americans. Currently there are over 500 investigations into unemployment systems in 40 states regarding this fraud. In Colorado, cybercriminals took advantage of the unemployment system so aggressively that over the course of one month, 75% of applications were ruled fraudulent.
By the numbers: Consider these identity theft statistics:
- In 2019, 14.4 million consumers became victims of identity fraud. That’s about 1 in 15 people.
- Overall, 33% of U.S. adults have experienced identity theft, which is more than twice the global average.
- One in five victims of identity theft have experienced it more than once.
- Identity theft is the most common consequence of a data breach, occurring 65% of the time.
- Over 1 million children in the U.S. were victims of identity theft in 2017, costing families $540 million in out-of-pocket expenses.
- There’s a new victim of identity theft every 2 seconds.
So, today we are going to discuss ways to prevent potential identity theft and fraud; and also suggest ways to react to the situation if you think your identity was compromised.
HOST: What are some of the best ways to prevent identity theft in the first place?
KLAAS FINANCIAL: If you think it sounds expensive and time-consuming to safeguard yourself from identity thieves, the costs of not doing so can be even more intimidating. Many agencies report that a single incident of identity theft can take six months and 40 hours of work for a typical individual to recover. Costs associated with addressing more complex incidents (especially those involving the need for help from a credit professional) can range from $5,000 and up. Bearing this in mind, it pays to be cautious.
Best ways to prevent identity theft: Keep personal information secure offline:
- Lock your financial documents and records in a safe place at home and lock your wallet or purse in a safe place at work.
- Limit what you carry. When you go out, take only the identification, credit, and debit cards you need. Leave your Social Security card at home in a safe place. Make a copy of your Medicare card and black out all but the last four digits on the copy. Carry the copy with you, unless you are going to use your card at the doctor’s office.
- Careful sharing: Before you share information at your workplace, a business, your child’s school, or a doctor’s office, ask why they need it.
- Shred receipts, credit offers, credit applications, insurance forms, physician statements, checks, bank statements, expired charge cards, and similar documents when you don’t need them any longer.
- Destroy the labels on prescription bottles before you throw them out.
- Take outgoing mail to post office collection boxes or the post office. Promptly remove mail that arrives in your mailbox. If you won’t be home for several days, request a vacation hold on your mail.
- Opt out of prescreened offers of credit and insurance by mail. You can opt out for 5 years or permanently. To opt out go to optoutprescreen.com. The 3 nationwide credit reporting companies operate the phone number and website. Prescreened offers can provide many benefits. If you opt out, you may miss out on some offers of credit.
HOST: What about the way we share our information online?
KLAAS FINANCIAL: It is also critical to keep personal information secure online:
- Be alert: Watch for fraudsters! Be alert to impersonators who are trying to get you to give out personal information on the internet. Watch out for phishing schemes that entice you to click on links in emails. Call the phone number on your legitimate monthly statements vs. a number in an email or left in a phone message. Don’t open files, click on links, or download programs sent by strangers. Opening a file from someone you don’t know could expose your system to a computer virus or spyware that captures your passwords or other information you type.
- Safely dispose of personal information that can be found on an old computer or a mobile device. Remove the SIM card from a mobile device or use a wipe utility program to overwrite a hard drive.
- Keep passwords private: Use strong passwords with your laptop, credit, bank, and other accounts. Be creative; think of a special phrase and use the first letter of each word as your password.
- Don’t overshare on social networking sites: If you post too much information about yourself, an identity thief can find information about your life, use it to answer “challenge” questions on your accounts, and get access to your money and personal information. Consider limiting access to your networking page to a small group of people. Never post your full name, birthdate, Social Security number, address, phone number, or account numbers in publicly accessible sites.
- Secure your Social Security number: Keep a close hold on your Social Security number and ask questions before deciding to share it. Ask if you can use a different kind of identification. If someone asks you to share your Social Security number or your child’s, ask why they need it and how will it be used.
- Keeping your devices secure: Use security software such as anti-virus software, anti-spyware, and a firewall. Update the protections regularly.
- Be wise about Wi-Fi: Before you send personal information over your laptop or smartphone on a public wireless network such as in your favorite coffee stop, library, airport, hotel, or other public place, see if your information will be protected. If you use an encrypted website, it protects only the information you send to and from that site. If you use a secure wireless network, all the information you send on that network is protected. Consider getting a hot spot for this.
- Lock up your laptop: Don’t use an automatic login feature that saves your username and password, and always log off when you’re finished. That way, if your laptop is stolen, it will be harder for a thief to get at your personal information.
- Regularly check your credit reports: Sign up for creditkarma.com or check annualcreditreport.com regularly. Establish Fraud alerts.
HOST: So, if you find out that you are a victim of identity theft, what should you do?
KLAAS FINANCIAL: Well you may be suspicious that your identity has been compromised if you get a notice from the IRS or see unfamiliar accounts on your credit report, or strange withdrawals on your bank account. If you see one of these warning signs of identity theft, act quickly. Taking these steps will help you limit the damage:
- Go to identitytheft.gov. This will guide you through each step.
- Call the companies where you know fraud occurred.
- Place a fraud alert on your credit reports and get copies of your report.
- Report identity theft to the FTC (Federal Trade Commission).
- File a report with your local police department.
- Then, take a deep breath and begin to repair the damage. Depending on your situation, your next step might be closing accounts opened in your name or reporting fraudulent charges to your credit card company.
This Week’s Question of the Week: How many consumers in the United States were victims of identity theft in 2019? Was it 3 million or 14 million people?
Catch C.J. Klaas and Maleeah Cuevas on Money in Motion every Thursday on Madison's 1310 WIBA from 8:05-8:35am.