“That’ll never happen to me.”
We buy insurance despite low odds of something bad happening.
You and I are probably not going to die before we’re supposed to.
But if we did, the consequences would be catastrophic.
That’s why we buy life insurance.
What about identity theft? How likely is it that you’ll become a victim?
As of today, over 33% of Americans have been the victim of identity theft at some point in their lives. In 2020, theft cost Americans over $50 Billion.
Those numbers are on the rise.
So, the odds are pretty good and it probably makes sense to have some form of identity theft protection.
Here’s what we’ll talk about:
- What is identity theft
- How to protect yourself against it
- Recognizing signs you may be a victim
- What to do if you’ve been a victim
Let’s get started.
What is identity theft
Just as it sounds, identity theft is when someone steals personal information about you intending to use it for their own gain.
They can use it to do variety of nefarious things such as:
- Use your existing credit cards
- Open new credit cards
- Buy a phone and set up a new plan
- Commit tax fraud
- Assume your identity
- Get medical care
Those are just some of the ways thieves use your personal and financial information to enrich themselves at your expense.
How to protect yourself against it
It’s a lot easier to steal passwords than you’d think. Clicking on links in emails, using the same password on multiple sites, and downloading things from the internet are all ways thieves can access your information.
A smart way to protect yourself is to enable 2-Step Verification (sometimes called 2-Factor Authentication) on as many devices and websites as you can. It simply requires an additional step beyond entering a password to prove you are who you say you are.
Thieves also try to steal your information through phishing, or trying to trick you into entering your information in a fake email or website. You may receive an email which looks as though it came from your bank, but it’s actually a thief trying to steal your information.
Over 40 million Americans have something on their credit reports that shouldn’t be there. Checking your credit report at least once a year for any discrepancies is a wise practice. Look for accounts, names, addresses, and any other information which isn’t yours.
One of our Certified Partners, Dovly, provides credit repair and monitoring.
These are just a few ways you can better protect yourself.
In terms of purchasing identity theft protection, there are many companies providing this service. Prices range from $100 a year to $400. Some of the top providers are LifeLock, Aura and IdentityForce.
I think there’s value in owning this type of insurance.
Recognizing signs you may be a victim
How do you know if you’ve been a victim? Here are some things to look out for:
- You stop getting bills in the mail
- You get rejected for a new credit account
- You start receiving bills or invoices for things you didn’t purchase
- Unknown charges show up on your accounts
- The IRS rejects your tax return or tells you it’s already been filed
- Small charges appear on your bank and or credit accounts
- Your credit card companies alert you of suspicious behavior
What to do if you’ve been a victim
I mentioned the importance of monitoring your credit report at least once a year. If you’ve been a victim, I encourage you to review it on a monthly basis.
You should reach out to your creditors immediately to alert them to the theft.
It’s also wise to freeze your credit. This means no new credit accounts can be opened in your name. You do this by contacting the three major credit bureaus, Equifax, Transunion and Experian, and asking them to freeze your credit.
Finally, dispute any fraud on your credit report immediately with the appropriate credit bureau.
While there’s no way to guarantee you won’t be a victim of identity theft, there are many things you can do to position yourself for success. Take action as soon as you can!
Dovly provides credit repair and monitoring.
Check out our The Right Coverage course to ensure you’ve got the right protections in place.
If you’re ready to take control of your financial life, check out our DIY Financial Plan course.
Connect with one of our Certified Partners to get any question answered.
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Here are some episodes of the LifeBlood podcast that are applicable:
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