Becoming a victim of identity theft can have serious implications if your financial or personal information is compromised.
An estimated 15.4 million Americans were targeted for identity fraud in 2022, a slight increase over the 15.3 million victims reported in 2021. Losses totaled $20 billion, a 15% decline year-over-year, suggesting the efforts financial institutions are making to combat criminals are paying off.1
While banks appear to be doing their part, consumers and businesses alike should be on their guard to protect against this threat. Keeping identity thieves at bay begins with establishing a solid line of defense when it comes to your personal information.
Safeguard Physical Documents
The first step in shielding yourself from identity theft is getting your financial documents under lock and key. If an identity thief gains access to your Social Security card, birth certificate, bank account statements or credit card statements, they have virtually everything they need to wreak havoc with your financial life.
How do you protect those documents? There are a few possibilities, including:
- Investing in a secure home safe to hold your Social Security card, passport, and other important documents
- Storing documents you don't anticipate needing often in a safe deposit box at a bank
- Going paperless for bank and credit card statements
- Using a cross-cut shredder to destroy statements or other financial documents that you no longer need
Regardless of what method you choose, the goal is to make sure that you're keeping your most important financial details away from prying eyes.
Manage Your Online Information Securely
The internet has made it easier to do just about everything these days, from paying bills to shopping, but it's also created a host of opportunities for identity thieves to swoop in and steal your information. Phishing scams are a prime example.
Using seemingly legitimate-looking emails, identity thieves are able to trick consumers into handing over personal details. In some instances, phishing emails may contain links that download malware onto your computer when clicked, allowing an identity thief to track your movements online. If you're checking your bank or credit card accounts, you may be unknowingly handing over your login information.
Exercising caution with emails from unfamiliar sources is crucial in preventing identity theft. Protect your inbox by not clicking on links from unknown senders, confirming any bank or financial communications by phone before responding, regularly updating a unique email password, and keeping your computer's firewall active. Report any suspicious emails to your provider as phishing, and don't hesitate to mark them as spam or block the sender.
For enhanced security, consider using advanced password management tools like Dashlane Password Manager or 1Password. Tools like these not only store your passwords securely but also generate strong, unique passwords for each of your accounts. To take security a step further, consider AI-powered password managers, which are “trained" to continuously learn and adapt to new cybersecurity threats. Tools such as Zoho Vault and Keeper Security can ensure your credentials are safeguarded against evolving risks thanks to built-in machine learning algorithms. (The future is now!)2
To add even another layer of security, enable two-factor authentication (2FA) on all accounts that offer it. This requires not only a password but also a second factor, like a code sent to your phone, adding another hurdle for potential identity thieves.
Be Smart About Mobile Banking
If you prefer to do your banking on the go, you're not alone. Nearly half of American households, 43.5% to be exact, rely on mobile banking to manage their money. Just under 15% of Americans, by comparison, prefer to visit a teller at a bank branch to carry out transactions.3 While mobile banking can make things like checking your balances or transferring funds a breeze, it's important to be careful about how you're accessing it. Using unsecured public Wi-Fi to log in to your bank's mobile banking app, for example, is a big no-no.
When you're transmitting your financial details across an unsecured network, it doesn't take much for an identity thief to intercept them. The takeaway? Stick to secured network connections when you're doing your financial business.
Before you visit a website on your mobile device, check the security certificate. If the page address doesn't begin with "https," you may want to steer clear. Otherwise, you could be opening yourself – and your information – up to identity thieves. If you visit a secure page that requires you to log in, make sure you're completely logged out before navigating away.
Pro tip: If you're using Wi-Fi away from home, consider logging in through a virtual private network, or VPN, which can create an encrypted, secure pathway for transmitting data.
Monitor Your Bank and Credit Accounts
In many cases, identity theft isn't discovered until well after the fact. For instance, you may not realize someone has opened a credit card account in your name until you begin receiving phone calls from a debt collection agency.
The good news is that there are some things you can do to proactively monitor your accounts and head off fraud before an identity thief has a chance to do any damage.
- Review your bank account and credit card account statements monthly to scan for purchases or other transactions you don't recall initiating.
- Consider setting up email and text alerts to notify you of new account activity, including debit card transactions, transfers, login attempts, or changes to your passwords.
- Check your credit reports on a regular basis to make sure there are no new accounts or inquiries for credit you don't recognize.
By federal law, you are entitled to receive a free copy of your credit report once every 12 months from each of the three credit reporting agencies (Equifax, Experian, and TransUnion) via AnnualCreditReport.com. You can stagger these requests across the year – rather than checking them all at once – to give you better coverage. It's also a good idea for married couples to check the reports for both spouses.
Many AI-powered password managers and services like Dashlane offer the functionality to monitor your bank and credit accounts for suspicious activities. They can alert you to unusual logins or attempts to change passwords, providing real-time defense against identity theft.
Putting up a strong defense that encompasses regular monitoring of your accounts along with implementing physical and online security measures may help to reduce your odds of being targeted for identity theft. Recognizing the evolving nature of online threats, it's crucial to leverage advanced tools and AI-powered password managers equipped with two-factor authentication. These technologies are integral to staying ahead of cybercriminals and ensuring that your sensitive information remains protected in an ever-changing digital landscape.
1 Javelin. "2023 Identity Fraud Survey: The Butterfly Effect." Published March 28, 2023. Accessed December 2023.
2 Kim Key. "The Best Password Managers for 2023." PCMag.com. Updated October 31, 2023. Accessed December 2023.
3 FDIC. "2021 FDIC National Survey of Unbanked and Underbanked Households." Updated July 24, 2023. Accessed December 2023.
