There are a variety of ways in which thieves can use stolen personal information to commit fraud. The most common types of identity theft are the following:
1. Account Takeover Fraud: The thief uses personal information to access your financial accounts and reroute your account communications. They may use this information to wipe out your funds or pose as you to apply for credit.
2. Card Not Present Fraud: With this method, the thief uses stolen credit card information to buy items online or over the phone.
3. New Account Fraud: New account fraud is when a credit account is fraudulently opened in your name and all account information is sent to the thief.
4. W2 Fraud: This type of theft occurs when the thief sends an official-looking email that says it’s from the IRS requesting W2 or payroll data. These emails are designed to get information that can be used for crimes like filing fraudulent tax returns for refunds.
Fortunately, there are ways to avoid having your identity stolen, including the following:
1. Keeping an eye on your finances including your bank account balances, credit card statements, credit scores, and credit reports. Monitor your bank account and credit card statements for unfamiliar transactions, your credit score for unfamiliar credit inquiries or derogatory marks, and your credit report for unfamiliar accounts. You can check your credit score for free on CreditKarma.com and you can check your credit report once a year free of charge on AnnualCreditReport.com.
2. Choosing a credit card company that offers security alerts. Some credit cards allow you to set security alerts to notify you of any transactions over a certain amount. Also, some credit card companies offer features that will alert you about suspicious transactions, such as a large tip on a small bill.
3. Avoiding use of simple passwords and utilizing two-factor authentication when possible.
If you would like to further discuss strategies for avoiding identify theft, please contact Heller Wealth Advisors to speak with one of our financial professionals.