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You’re Never Too Safe from Identity Theft

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Recent data breaches underscore the importance of protecting yourself.

MoneySmart
By Grace S. Yung

It would be difficult not to notice the growing number of data breaches affecting seemingly “secure” entities, including Anthem, Yahoo, JP Morgan Chase, and even the IRS.

While all data breaches are alarming, the recent Equifax hack—with almost half of the U.S. population affected—means the chances are good that criminals have at least some of your sensitive information.

When it comes to identity theft, one of the first questions people ask is whether they’ll be responsible for fraudulent charges.

Federal law caps your liability at $50 for unauthorized credit-card charges—and, depending on your card issuer, you may not be responsible for anything.

For debit/ATM cards, the amount of liability depends on how quickly you report the theft. If you report the card being lost or stolen within the first two days, you may only be responsible for $50. However, if you wait up to 60 days, you could find yourself responsible for $500—and if you wait more than 60 days, there is no limit to your liability. With that in mind, be sure to check your credit- and debit-card statements and report any evidence of fraud immediately.

After reporting suspected fraud, it is also important to place a fraud alert on your credit reports by contacting one of the three major bureaus—Equifax, Experian, or TransUnion. This is basically a “red flag” notifying creditors and lenders that they need to take additional steps to verify your identity before extending any credit. An initial fraud alert is free, and will remain in place for 90 days.

If your Social Security number has been compromised, be sure to contact the Social Security Administration. Even if the perpetrators haven’t moved forward with any activity, they could be planning to file a fraudulent tax return in the future.

Finally, if you become a victim of identity theft, you should file a report at your local police station.

In terms of proactive measures, identity-theft insurance can be a good way to monitor your credit and accounts, as well to restore your identity and mitigate financial damage if you become a victim. With most plans, the legal fees and other expenses directly associated with reclaiming your identity will be covered. Other common coverage includes lost wages due to time taken off from work to deal with identity theft.

The main carriers of identity-theft coverage include LifeLock, Privacy Guard, ID Shield (an affiliate of Legal Shield), ProtectMyID, and ironically, Equifax. Because coverage varies greatly, it’s recommended that you look at several options.

Although there is no way to guarantee protection from identity theft, there are several other steps you can take to prevent it, including:

• Changing your email and account passwords frequently;

• Having a two-step login/authentication on your email and other online accounts;

• Creating passcodes and adding emergency contact info to your mobile devices;

• Having a special email account for banking and other financial information;

• Changing the default settings on your Internet router;

• Installing a virtual private network (VPN) on your tablet, laptop, and/or other devices that you use in public places;

• Running anti-virus software on all devices;

• Not opening emails or clicking on links unless you recognize the sender;

• Having email and/or text alerts set up for your financial and credit-card transactions;

• Maintaining strong privacy settings on social-media accounts, and not posting your home address or information about when you are on vacation;

• Making sure that you back up all data on your devices in two places—a physical, external hard drive, and in the cloud;

• Putting a security freeze on your credit files with the three major credit bureaus;

• Regularly checking your children’s Social Security numbers to ensure no one is using them;

• Setting up automatic updates for your online programs and apps.

To learn more about protecting yourself from the growing threat of identity theft, talk with a professional who can provide you with guidance and resources. It can be well worth it to put protective measures in place, because when it comes to your personal information, you can never be “too safe.”

This article appears in the November 2017 edition of OutSmart Magazine. 

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Grace S. Yung

Grace S. Yung, CFP, is a certified financial planner practitioner with experience in helping domestic partners plan their finances since 1994. She is a principal at Midtown Financial LLC in Houston and was recognized as a “Five-Star Wealth Manager” in the September 2017 issue of Texas Monthly.
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