Do you feel insulated from data breaches and identity theft? News of data breaches, from those at national retailers to governmental and educational institutions, seem to pop up frequently these days.
According to Javelin Strategy, a research and consulting firm, incidents of identity fraud affected more than 5 percent of the population in 2013 and cost $21 billion—a three-year high. Like it or not, these ongoing data breaches will force us to stay on top of our finances more than ever.
But before you close all of your accounts and move to the forest, here are a few ways to combat the hackers.
Keep close tabs on your accounts. Has your bank called to say your account may have been compromised and a new card is on the way? Have you had the pleasure of a denied transaction? You don’t have to wait for financial institutions to take action. Scrutinize your bank and credit card statements on a regular basis, identifying any inaccuracies and disputing them immediately.
Create an identity theft report. If your information has been compromised, file a complaint with the Federal Trade Commission (FTC). The FTC Complaint Assistant includes an option for consumers whose personal information was disclosed due to a company’s data breach. Take the completed complaint, called an FTC affidavit, to the police department and file a police report. The affidavit and police report make up your identity theft report.
Next, alert your financial institutions. Most credit companies encourage customers to call their toll-free numbers as soon as possible to report fraud. Ask if your bank has a process in place to put a fraud alert on your account.
Watch out for suspicious activity on your credit report. An annual examination of your credit report can highlight suspicious activity—such as accounts that may have been opened without your knowledge. The Fair Credit Reporting Act (FCRA) requires the three major credit reporting companies to provide consumers with one free credit report every year. The official site is www.annualcreditreport.com.
If you suspect you’ve been the target of fraud, the FTC suggests immediately placing a fraud alert with one of the three major credit reporting agencies. The alert is sent to all three credit reporting agencies and lasts for at least 90 days, according to Equifax. The alert ensures that any company must verify your identity before issuing credit—making it that much harder for an identity thief to open more accounts in your name.
Dispute credit report inaccuracies. According to TransUnion, consumers should dispute any potential inaccuracies with their credit reports as soon as they’re spotted. Start by filing a Credit Report Dispute. The company or agency that has issued the credit has 30 to 45 days to respond. If there is no response or the issuer is unable to verify authenticity, the disputed information will be removed from your report. If it is verified as accurate, it will remain on your report.
Consider identity restoration coverage. An insurance policy with this additional coverage can help resolve fraud incidents. With this type of coverage, fraud specialists typically work with you to handle everything from placing proactive fraud alerts to addressing inquiries from creditors.
Don’t let the hackers get your down. These steps should help protect your identity and ensure that the next damage from a major purchase will be one of your choosing.