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Tips to Avoid Identity Theft and Financial Scams

10/29/21 9:00 AM

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Digitization has shaped the way people operate in the world, and as more apps become available and tasks like grocery shopping, making doctor’s appointments, and booking vacations are moved to a digital space, society is more connected than ever before.

Our entire lives exist on smartphones, tablets, and computers, and as digitization continues to advance, so do hackers and their strategies to steal private information.

This October, for Cyber Security Awareness Month, we’ve provided some best practices to help you protect your identity, finances, and personal information.

Types of Identity Theft

First, it’s important to understand what identity theft is and which types to look for. While hacker trends constantly change and evolve, knowing what you could be susceptible to is important.

Identity theft happens when someone uses your personal information to pose as you or steal from you. The hacker may use your information to apply for a new credit card, shop online, get medical services, and more. This act can damage your credit score or drain your accounts, and costs time and money to restore. NerdWallet lists seven types of identity theft to look for and the important warning signs of each.

  • Credit Identity Theft: This happens when a fraudster uses your personal information to apply for new lines of credit. They can use information such as your social security number, birthdate, and other personal information to open the cards.
  • Child Identity Theft: Similar to credit identity theft, scammers may use children’s identity to apply for a new line of credit, apply for a loan, or other financial matters.
  • Synthetic Identity Theft: This type of theft most commonly involves a child’s identity along with the address and birthday of an adult. By creating a fake person, scammers can apply for loans and credit cards under a false identity.
  • Taxpayer Identity Theft: Some fraudsters will use a social security number to file a tax return or steal a tax refund or tax credit.
  • Medical Identity Theft: This type of theft is incredibly dangerous because it involves a potential mix-up of medical histories and needs. When a fraudster steals someone's identity for medical services, it can lead to poor health decisions being made for both the scammer and the scam victim.
  • Account Takeover: When a scammer steals your personal information, they may change your account IDs or passwords, so you no longer have access.
  • Criminal Identity Theft: This type of theft occurs when a scammer gives law authorities someone else’s name and address while being questioned by an officer of the law.

Identity theft can happen easily, so make sure you’re mindful of when you share your information, who you share it with, and where you share it.

Protecting Your Information and Devices

Keeping your information private is important in securing your identity and accounts online. While sharing passwords for paid services like Netflix, Hulu, or Amazon may sound like a good idea financially, it puts your privacy at risk every time you share it with a friend or family member. Not that your loved one will hack you, but if they don’t use caution when handling your passwords and privacy, you never know who will get a hold of it.

Ensure you do the following to maintain your privacy:

On Your Accounts

  • Create strong, encrypted passwords. Use uppercase and lowercase letters, special characters, and numbers (nothing obvious, like your birthday or graduation year).
  • Change your passwords regularly and don’t use the same one twice!
  • Enroll in two-step authentication for devices and apps, like your phone, email account, bank account, social media accounts, etc.
  • Enable fraud alerts and spending limits on your financial accounts through your financial institution.
  • Never give your credit card number, debit card number, social security number, PIN number, or other important information over the phone while in public. You never know who may be listening.
  • Don’t overshare on social media. Strangers don’t need to know where you live, when you’re on vacation, whether it’s your birthday, etc. If you want to share these details, consider making your accounts private.
  • Don’t let your friends or family borrow your credit or debit cards, and never share your PIN number.
  • Review your credit report annually. You can request a free copy from AnnualCreditReport.com. Look through your report to ensure there are no signs of fraud, including unexpected lines of credits, incorrect personal information, or past-due accounts.
  • Review your bank statements to ensure each purchase is recognizable. If not, freeze your credit and debit card and contact your financial institution.
  • Shred important documents if you have a hard copy.
  • Don’t share any of your passwords with friends or family.

On Your Devices

  • Avoid public Wi-Fi connection. Compared to private Wi-Fi, the security features are often limited or non-existent.
  • Review your privacy settings on apps and social media accounts so you know who has access to your posts.
  • Don’t save your passwords to browsers and apps on your devices.

For additional protection, purchase antivirus and firewall software to protect your devices from potential hackers. These software programs are designed to prevent malware from being used to steal or monitor your information and identity. US News has a list of the best antivirus programs listed here.

Remember, it’s important to keep your virus protection software, web browser and operating system updated because criminals can easily hack outdated programs. For more information about how antivirus software works, click here.

Review Current Scam Trends

The Federal Trade Commission (FTC) informs the public on current scam and hacker trends. Most commonly, a scammer will do one of four things:

  • Pretend to be from an organization you know or are involved in
  • Say there is a problem or a prize for you
  • Pressure you to act immediately
  • Ask you to pay in a specific way, typically through a money transfer service

Typically, a scammer will utilize phishing emails, phone calls, or texts to complete the above. Learn more about scam trends, what to do if you’re scammed, and how to avoid a scam directly through the FTC.

If you are contacted by a scammer, the FTC recommends you do the following:

  • Block unknown numbers from text and calls
  • Don’t give your personal information when it’s unexpected
  • Do not act immediately
  • Never transfer money to someone requesting payment through a transfer service or gift card company
  • Report scams or potential scams to the FTC
As the world continues to digitize, and the way we operate evolves from in-person to a digital model, the threat of identity theft and scams grow. Educating yourself on current trends and knowing what to look for in a potential scam can be the determining factor of whether your identity and finances are compromised.

Utilize resources like the FTC or Slavic401k blog to stay informed. If you think that one of your accounts has been hacked or compromised, contact the service provider or financial institution.

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