Protecting your assets against Fraud and Identity Theft: Part II

The last time we discussed this topic we talked about how anyone can fall prey to fraud.  Today we will discuss some simple things you can do protect your identity.

Keeping your identity safe

Identity theft is a growing problem in the United States, claiming around 10 million victims every year, according to the Federal Trade Commission (FTC). Thieves who steal your identity may use your personal information to run up charges on your credit cards, drain your bank accounts, and take any number of other actions to make off with your wealth or destroy your credit rating.

To protect your identity, it’s important to understand the many methods thieves use to obtain your Social Security number, bank and credit card account numbers, and other sensitive personal information. They include “dumpster diving” — that is, sifting through your trash for bills, receipts, bank statements, credit card offers or other documents; “phishing,” which involves sending phony e-mail messages from financial institutions or other companies asking you to reveal personal information; and old-fashioned stealing (your wallet or purse, for example).

If you become the victim of identity theft, there are steps you can take to restore your credit rating and recover stolen assets, but it can be a time-consuming, costly process. So at minimum take the following basic steps to protect your identity:

  • Shred all paperwork that includes sensitive personal information.
  • Don’t give out personal information unless you’re initiating the contact.
  • Immediately report stolen credit cards, and check your credit report at least once a year.

When you share personal financial information with trusted third parties, don’t hesitate to ask them about their privacy policies and security measures. And don’t provide more information than necessary.

For example, even though employers, banks and businesses running a credit check need your Social Security number, most other businesses don’t. If someone asks for your Social Security number, don’t be afraid to ask why they need it, how it will be used, how they will protect it from theft and what will happen if you refuse to provide it.

In the next and final installment on this topic we will discuss how you can use estate planning tools to protect yourself again fraud and identity theft.

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