Six Ways to Protect Your Identity

moneymattersRecent data breaches at several national retailers illustrate the importance of keeping your identity safe and secure. Not only are identity thieves getting more brazen — hacking into retail computer systems and pilfering data and dollars from millions of debit cards — they continue to find new ways to abuse the electronic systems created to make our lives easier.

Identity theft is a broad term for unauthorized use of your personal data, typically for financial gain. It starts when someone “steals” your name, address, social security number, checking account or credit card numbers, passwords and other personal information. Your information is then used to falsely obtain credit cards, loans, cash, merchandise, medical services — even government benefits and tax refunds.

Not only is identity theft a personal violation, but it is also a costly problem for law-abiding citizens. Even if your personal bank account hasn’t been drained, you pay the price for identity theft every day in the form of higher-priced goods and services, inflated insurance premiums and higher taxes.

It may seem tedious to keep a close eye on your identity and the financials attached to it, but it’s worth the effort. After all, it’s doubly aggravating and time consuming to undo the damage caused by identity theft. Do what you can to avoid the headache and hard work of being a victim of identity theft with these simple tips.

Monitor your accounts regularly. Even if you prefer printed versus online bank statements, you shouldn’t wait until the end of the month to check that your accounts are reconciled (and nothing’s amiss). Take advantage of online access to your financial accounts and watch for fraudulent transactions. You know something’s not right with a transaction if someone has used your credit card to purchase train tickets in a foreign country. In a situation like this, contact your bank immediately.

Keep tabs on your electronic devices. Identity thieves will look for your private information on any electronic device with a wired or wireless connection to the Internet. Never leave your desktop computer, laptop, tablet or smart phone out and unattended in public places. You may want to rethink plans to sell or give away an electronic device that you’ve used to store sensitive information. At a minimum, clear stored data by restoring factory settings and removing SIM cards (phones) or wiping your hard disk (computers).

Clear your history often. Get in the habit of clearing the cache or history in your Internet browser before you log out or step away from your computer. Doing so may not stop the most persistent thieves with forensic skills, but it will slow down the process of retrieving data you’d rather keep private.

Change your PINs and passwords. If you regularly access financial accounts and complete credit card transactions online, it’s particularly important to have several layers of security in place. For example, you can easily require a PIN or password log-in whenever you turn on your phone or start your computer. But if you use the same password to log on to your computer and your bank account, or to open your phone or retrieve your email, you’ve defeated the purpose and made the identity thief’s job that much easier. Make your passwords inscrutable to outsiders. While nonsensical strings of letters, symbols and numbers can be hard to remember, they will be tougher passwords for criminals to crack.

When in doubt, pay with cash. Another way to limit your exposure to identity theft is by reducing your credit card transactions. For instance, you might try using cash for all transactions under $100. For larger transactions, it’s often better to use plastic. Not only do credit cards remain more convenient, carrying around large sums of cash makes you more vulnerable to old-fashioned theft targeting your wallet or purse.

Stay informed and alert. Because of the annual cost of identity theft, the federal government is interested in helping consumers stop identity theft before it happens. Stay informed about consumer identity theft with alerts, tips and other resources provided by the Federal Trade Commission at www.consumer.ftc.gov.

Brandon Miller, CFP and Joanne Jordan, CFP are financial consultants at Jordan Miller & Associates, A Private Wealth Advisory Practice of Ameriprise Financial Inc. in San Francisco, specializing in helping LGBT individuals and families plan and achieve their financial goals.