Are you protecting your identity?
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The Federal Trade Commission (FTC) reported that social media was the most common contact method for fraud in 2024 for those under age 70 and phone calls for those over age 70. Other types of fraud include online shopping, business and government imposters, investment advice, and job or employment agency scams.
What steps are you taking to protect yourself from becoming a victim of fraud?
Scamming Signs
The FTC indicates four common signs of a scam:
- Scammers pretend to be from an organization you know, like the Social Security Administration, IRS, or Medicare.
- Scammers say there’s a problem or a prize, like owing money, a family emergency, problems with one of your accounts, or winning money in a sweepstakes or lottery.
- Scammers pressure you to act immediately, so you don’t have time to think before providing sensitive information or payment.
- Scammers tell you to pay in a specific way and insist on payment with cryptocurrency, wire money, use a payment app, or put money on a gift card.
Avoiding a scam can be difficult, given the urgency and fear caused by fraudsters. Blocking calls and filtering text messages can help avoid some common scams. Avoid giving personal or financial information and resist the pressure to act immediately. The FTC highly suggests stopping and talking to someone you trust before giving away information or payment. Talking about the situation with others can help you to realize it’s a scam.
No-Brainer Security Steps
There are easy steps to take to protect sensitive information online. Creating strong passwords for logins and unique passwords for online accounts is important. Creating unique passwords for each account may be a pain, but it can stop scammers from accessing multiple accounts. Storing passwords in an encrypted software application or database is one way to keep track of distinct login information.
Two-factor authentication is a security process in which consumers provide two types of information to verify themselves. Typically, the first type of information is a username and password, while the second layer includes a passcode sent to a different device or a facial scan, for example. Two-factor authentication is a highly recommended extra layer of security and a way to protect online accounts containing personal information.
Along with the above, be cautious with any information shared on social media. While sharing it may seem harmless, fraudsters can use this information to guess passwords and security questions.
The Case for Credit Freezes
According to the FTC, a credit freeze is the best way consumers can protect against an identity thief opening new accounts in their name. Implementing a credit freeze is done online or by calling each of the three main credit bureaus, Equifax, Experian, and TransUnion.
A credit freeze prevents creditors from accessing your credit report and does not affect your credit score. Typically, consumers cannot receive new credit (credit cards, mortgages, car loans, etc.) if a creditor can’t access your credit report. Thus, placing a freeze blocks fraudsters who might be trying to open an account in your name.
This also means that if you are applying for new credit, you must temporarily lift the freeze to be approved for a new loan. You typically don’t need to lift a credit freeze when applying to rent an apartment or purchase insurance.
Regularly monitoring your credit report is not necessarily a way to prevent fraud from happening but a way to catch an identity thief early before too much damage is done. Consumers are entitled to a free credit report annually from each of the three main credit bureaus.
Visit www.annualcreditreport.com to order your reports, or call 1-877-322-8228. Additionally, Equifax offers those in the U.S. six free credit reports per year through 2026, in addition to the one free Equifax report you can get at www.annualcreditreport.com.
Going the Extra Mile
Consider establishing an online ‘My Social Security’ account. The Social Security Administration encourages consumers to create an account to prevent identity thieves from creating a profile in their name.
Since many consumers do not create ‘my Social Security’ accounts until benefit commencement begins, there is an opportunity for this type of fraud to go undetected for a long period. Visit www.ssa.gov to establish your account.
In addition to establishing an online Social Security account, the IRS now offers an extra layer of protection for all taxpayers through an Identity Protection PIN (IP PIN). The PIN prevents others from filing a tax return using your Social Security number. The IP PIN is a six-digit code known only to the taxpayer and the IRS and helps prevent thieves from filing fraudulent tax returns. For more information on IP PINs, visit www.irs.gov/identity-theft-fraud-scams/get-an-identity-protection-pin.
Summary
The reality is scams are not going away. Consumers need to remain vigilant of the personal information shared and stored on online accounts. Taking preventative steps to secure sensitive data will only improve your chances of not becoming a victim of fraud. Act today!
Abby Presley, CFP, is a Wealth Advisor with Bedel Financial Consulting, Inc., a wealth management firm located in Indianapolis. For more information, visit their website at www.bedelfinancial.com or email Abby at APresley@bedelfinancial.com.