Protecting Your Wealth in a Digital World
A recent study conducted by AARP found that Americans lost a total of $43 billion to identity fraud in 2023. This number includes $23 billion lost due to traditional identity fraud and more than $20 billion lost in coordinated scams orchestrated by criminals. However, the report noted that actual losses due to identity theft are likely much greater than what has been reported by victims.1
In 2023, the most common fraud engagement method was email, followed by phone calls and texts, according to the U.S. Federal Trade Commission (FTC).2 The top five states and territories for identity theft per 100,000 were (in order) the District of Columbia, Georgia, Florida, Nevada and Connecticut.
However, the damage of identity theft can be long lasting and goes far beyond monetary losses to include the following:
- Damaged credit – Accounts and credit cards opened in your name can damage a victim’s credit score and ability to be approved for new credit. While many of these issues can be addressed, it often takes a significant amount of time to resolve credit damage by fraudsters.
- Legal consequences – Victims may face legal consequences, and potentially criminal charges, if someone uses their identity to commit a crime.
- Shame, stress and embarrassment – Identity theft can also take an emotional toll on victims. In one study, 87% of identity theft victims reported feeling anxious or worried following their identity theft incident, while 77% reported feeling violated and 52% reported feeing embarrassed or ashamed.3
- Loss of time – Straightening out identity theft can take a significant amount of time. In fact, 65% of identity theft victims reported that the ramifications continue to stretch on for more than a year.4
Fortunately, there are steps you can take to protect your identity and your wealth.
#1 – Don’t share personal information over public Wi-Fi connections.
Public Wi-Fi networks aren’t secure. Any information exchanged over these networks can be intercepted, which is why you should never send personal or financial information over a public Wi-Fi connection.
#2 – Use strong passwords.
Choose strong passwords that are difficult to guess. Change your passwords often, and resist the urge to assign the same password to every account. That way, if one account is hacked, other accounts are still protected. Also, while it may seem obvious, don’t keep a list of passwords in an unsecured location.
#3 – Never click on suspicious emails.
“Phishing” is the act of sending emails that appear to be from reputable sources in order to convince individuals to share personal information, such as credit card numbers, account numbers and/or passwords. Phishing emails can also be used to install malware on your system, which can then be used to access your personal data or interfere with your system’s operation.
If you receive an email that looks suspicious, it probably is. Resist the urge to click any links, and never provide personal information over email.
If you receive an email regarding your finances that appears to be from a financial institution, the IRS or another reputable organization, call the toll-free number of that that institution (the one listed on the company’s website, not a phone number in the suspicious email) to verify the email’s authenticity before you provide any information.
#4 – Enable multifactor authentication.
Multifactor authentication offers an extra layer of password security. It requires that you provide another piece of data in addition to your password to gain access to your account. For example, your bank may send a PIN via text to your phone number on file. Whenever possible, enroll in multifactor authentication. That way, even if someone learns your password, he or she won’t be able to access your account.
#5 – Maintain security software.
Your internet-enabled devices should be equipped with strong, updated security software that regularly checks for suspicious and harmful activity. Make sure your software includes firewalls, antivirus protection and intrusion detection. Never connect to the internet without strong security software in place.
#6 – Keep your operating system and software up to date.
Software and operating system updates often include security fixes, which is why it’s important to enable automatic updates on all devices. You should also be using a well-respected internet browser, such as Chrome or Firefox, as they’re more likely to be regularly updated with the latest security protections.
#7 – Monitor your accounts.
One of the best ways to quickly identify fraudulent transactions is by consistently monitoring your accounts. At least twice a week, log into your various accounts to review recent transactions. Also, consider establishing banking alerts to notify you of any unauthorized or suspicious activity.
#8 – Protect your mail.
It’s not just your online data that’s at risk. Hard copy documents also contain valuable personal data that can be used by fraudsters. That’s why it’s important to promptly pick up your mail and shred all statements and documents before putting them in the trash.
#9 – Review your credit reports.
Each of the major credit bureaus, Equifax, Experian and TransUnion, allows consumers to access one free report each year. Take advantage of this annual opportunity to check your credit reports and make sure there aren’t any surprises or errors.
#10 – Fully wipe old electronics.
Even if you delete files from old computers, they can still be recovered by tech-savvy fraudsters. Before donating old electronics, use an overwriting software to fully wipe all personal data.
#11 – Sign up for an identity theft protection service.
While an identity theft service can’t prevent identity theft, it can promptly alert you to suspicious activity and help you recover any damages. For a monthly fee, these services monitor your credit reports, social media activity, financial accounts, medical information and more in order to identify suspicious activity.
