When working on a client’s estate plan, it is not unusual for a client to ask about identity theft. Sometimes the question is about if and how they can prevent it, and occasionally the question is what to do if it happens. As our clients age, we often have conversations with their adult children about protecting their parents from scams aimed at vulnerable seniors.
Criminals have embraced a variety of ways to steal a person’s identity as a way to make money. The most common types include credit card fraud, government benefits fraud, and loan fraud. (See also the IRS’s annually published “Dirty Dozen” list of common tax scams.) Because of this variety, it is important to note that there is not a single problem with a single solution. It is virtually impossible to prevent identity theft. But there are things you can do to minimize the risk, including the following:
- Check your credit reports. The major credit reporting agencies are Equifax, Experian, and TransUnion. You can obtain a free copy of your credit report from each of these agencies every year by going to annualcreditreport.com. (Important note: you can and should also do this for your minor children.)
- Freeze your credit. You can contact each reporting agency to request that they not provide creditors with your information, which means that no new credit lines will be extended on your credit until you decide to “thaw” your credit. (Important note: you can and should also do this for your minor children.)
- Use two-factor authentication. Most online accounts offer this feature to essentially add another layer of security for accessing the account. We highly recommend taking advantage of this feature with as many accounts as you can.
- Use a password manager. We are well into the digital age and we all should know now not to reuse the same password for multiple accounts. There have been several well-publicized security breaches and your information was very likely compromised. It should not be a surprise to learn that criminals will try a username and password that you have used in the past to try to hack different accounts. Also, most password managers have a password generator that produces a unique password you can use that is nearly un-hackable.
- Stop clicking on stuff. When you are browsing the internet or checking your old Hotmail account that you have kept around for 20 years for whatever reason, just resist the urge to click on anything, ever, unless you are certain that the source of the link is legitimate. And if you do click on something and it takes you to a page asking you to enter a username and password, take a moment to confirm the source.
Finally, if you find out that you are a victim of identity theft, the first thing you should do is go to IdentityTheft.gov to report the theft and learn about how to develop a recovery plan. You should also consider filing a police report and notifying your creditors.