Fraud Prevention Series: Avoiding Identity Theft
January 11, 2022
Even if you believe financial fraud happens to other people, it's easy to become a victim of criminal activity, especially identity theft. Here are some ways to avoid that type of financial fraud in 2022.
Identity theft occurs when a fraudster obtains your personal information for a malicious act. This can result in unauthorized charges in your name, and affect your credit score. Additionally, identity theft can ruin your financial reputation by making it more difficult for you to borrow money in the future.
Invest in a paper shredder
For about $35, you can buy a personal paper shredder to ensure your sensitive documents are unreadable. To reduce the amount you need to shred, consider enrolling in paperless statements at your financial institution. As you will still receive documents in the mail containing sensitive financial data, you should shred them when you no longer need those documents.
Keep essential financial documents secure
For the sensitive documents that can’t be shredded, it’s important to have a secure place to store those files. Consider investing in a home safe or renting a safe deposit box at your financial institution. These security tools may also protect your important documents from any potential home disasters, including fires and floods.
In addition, if you have old credit cards you don't use but are keeping open to help your credit score, you might consider keeping them in a safe rather than in your wallet. This reduces the possibility of these accounts being used fraudulently if your wallet is lost or stolen.
Check your credit report regularly
If a fraudster obtains your Social Security number and other sensitive information, they could open up a line of credit and make purchases in your name. By checking your credit report regularly, you can spot that fraudulent activity and be able report it to avoid additional damage to your credit report and score.
You can request a free copy of your credit report annually from each of the three reporting bureaus – Experian, Equifax, and TransUnion – by visiting AnnualCreditReport.com. It is recommended to check your credit report every four months four months.
Learn how to spot phone, email, or text message scams
We are all familiar with spam calls, but you may not know that they're often from fraudsters looking for information to steal and use against you. Do not respond to unsolicited emails, texts, or phone calls where you may be asked to provide your financial account details or Social Security number.
Keep in mind agencies like the IRS and Social Security Administration won't call, text, or email asking you to verify personal information. Those agencies will only contact you by mail, so don’t respond if you are contacted by phone, email, or text about your financial account details to process your tax refund.
Financial fraud can be a challenging situation. Taking these steps to avoid being a victim in the coming year can help you and your finances have a better 2022.
Tags: Fraud Prevention Series, Money Management, Security