Rising Threat The Growing Risk of Identity Theft and Tax Fraud
Identity theft and related tax fraud pose a significant threat, with summer months often seeing a surge in incidents. In 2024, consumers lost billions due to identity fraud, driven by cyberattacks and data breaches. This guide provides essential tips to help you stay protected.
By understanding the risks and taking proactive measures, you can significantly reduce your chances of becoming a victim. This article will equip you with the knowledge to safeguard your personal and financial information.
Secure Networks 1. Public Wi-Fi: Use with Caution
Be vigilant when using public Wi-Fi networks, such as those found in coffee shops and libraries. These networks can be vulnerable, and your data may be at risk.
To protect yourself, avoid connecting to unknown or unstable Wi-Fi networks. If possible, use your cellular data instead. If you must use public Wi-Fi, use a VPN (Virtual Private Network) for added security. It’s best to avoid sensitive activities, like online banking, on these networks.
Safeguard Documents 2. Handle Private Documents with Care
Don't overlook the importance of protecting physical documents. Securely store essential paperwork, such as credit card statements and tax return copies.
Shred any documents that you no longer need. For guidance on what to keep and what to discard after Tax Day, consult reliable resources.
Update Address 3. Keep Your Mailing Address Current
In today's mobile society, address changes are common. Ensure that your financial institutions, credit reporting agencies, and tax authorities have your current address to prevent mail from falling into the wrong hands.
To easily change your address with the IRS, use Form 8822. If it's near tax season, include your new address on your tax return. Also, notify the US Postal Service.
Monitor Accounts 4. Regularly Check Bank and Credit Card Statements
Regularly review your bank and credit card statements to identify any unauthorized transactions. Promptly report any suspicious activity.
Double-check any transactions you don’t recognize.
Protect Data 5. Be Wise Online
Be mindful of the information you share online. Provide only the necessary details when making purchases or signing up for newsletters.
Review the site's privacy policy to understand how your information may be shared with other companies.
Strong Passwords 6. Use Smart Passwords
Use strong, unique passwords for all your online accounts. Regularly update your passwords, and consider using a password generator or password manager.
Avoid using the same password for multiple sites and don’t use variations on your password when you make updates.
Multi-Factor 7. Embrace Authentication
Enable multi-factor authentication (MFA) for your online accounts. This adds an extra layer of security by requiring a password plus another verification step, like a code from your phone.
Take advantage of MFA options whenever available, as it significantly enhances account security.
Be Wary 8. Be Careful with Games and Memes
Be cautious when engaging in online games and quizzes that request personal information, such as your mother's maiden name or your first pet's name.
These questions may be used to gain access to your accounts. Refrain from sharing personal details on social media.
“Increased awareness is your best defense against identity theft.
Kelly Phillips Erb, Forbes Staff
Interactive Tools
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Avoid Scams 9. Don't Fall for Phishing and Other Scams
Be wary of phishing attempts, typically in the form of unsolicited emails or texts that try to trick you into clicking a link or opening an attachment.
Never click links in suspicious emails or provide personal information on untrusted sites. Remember, the IRS will not contact you via email, phone, or text regarding your account.
SSN Safety 10. Protect Your Social Security Number
Treat your Social Security number (SSN) as a valuable piece of personal information. Before providing your SSN, determine if it is truly needed and why.
Do not provide your SSN unnecessarily, especially online.
Monitor Credit 11. Monitor Your Credit Report
Get a free credit report annually from each of the three major credit bureaus. Review your credit reports regularly to check for any unauthorized activity.
Visit AnnualCreditReport.com or call 1.877.322.8228 to obtain your free reports.
Fraud Alerts 12. Pay Attention and Use
Set up fraud alerts with your bank and credit card providers. Banks often notify you of suspicious transactions.
If your bank doesn't automatically provide alerts, consider setting them up yourself to monitor your accounts proactively.
Freeze Credit 13. Freeze Your Credit
Consider freezing your credit with the major credit reporting agencies. This prevents new accounts from being opened in your name without your consent.
Freezing your credit is free and doesn't impact your credit score. Understand the process for temporarily or permanently lifting the freeze.
Fraud Alerts 14. Consider Adding a Trusted Contact
Consider adding a trusted contact to your financial accounts. This allows your financial institution to reach out to someone you trust if they suspect fraudulent activity.
This can be particularly helpful for seniors and others who may need extra assistance monitoring their accounts.
Stay Vigilant Conclusion: Protect Yourself and Your Finances
Identity theft and tax fraud are serious threats, but by following these 15 tips, you can significantly reduce your risk. Stay informed, remain vigilant, and take proactive steps to protect your personal and financial information.
By adopting these strategies, you can safeguard your assets and enjoy greater peace of mind.