Identity Theft Is Increasing. Follow These 6 Tips to Protect Yourself

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With identity theft cases skyrocketing, safeguarding your information is more important than ever. 

The latest numbers on identity theft paint a concerning picture. Identity theft complaints received by the Federal Trade Commission (FTC) more than doubled from 2019 to 2020. They increased by another 22% in 2021, when there were nearly 1.7 million cases.

It’s clear that identity theft is becoming more common, and unfortunately, this type of crime can be a huge hassle to deal with. Many consumers don’t notice it until somebody has already opened an account in their name, racked up debt, and damaged their credit score.

This is a situation where time matters. The best-case scenario is proactively preventing identity theft. If it does happen to you, then the sooner you catch it, the better. Here are six tips to protect yourself.

1. Never give out sensitive information to people who call you on the phone

Scammers often call and pretend they work at financial institutions or government agencies. Then they ask for information they can steal, such as your Social Security number or credit card number.

If you get a call that’s supposedly from your bank, credit card company, or the IRS, don’t provide any sensitive information. Nobody legitimate is going to call you and ask you to read your credit card number to them.

If you’re not sure, pull up the official number to the company the person claims to represent, and call it. For example, if the caller says they’re from Chase and calling about your credit card, hang up and call Chase at the number on the back of your card.

2. Use strong and unique passwords

“Password1234” just doesn’t cut it. To keep your accounts safe, use strong passwords with a mix of letters, numbers, and special characters. Make sure you also have a unique password for each account. If all your passwords are similar and one gets compromised in a data breach, it could jeopardize all your accounts.

The tricky part with having unique passwords for all your accounts is remembering them. To avoid needing to reset passwords all the time, use a password manager to conveniently store your login information.

3. Monitor your credit file

When you think of credit card fraud, the first thing that comes to mind may be someone stealing your card info. That does happen, but it actually accounted for less than 10% of credit card fraud reports in 2021.

Far more common is new account fraud, when an identity thief uses your personal information to open an entirely new credit card. This is one of the reasons why it’s so important to review the activity on your credit file regularly. If you see an account you don’t recognize, you can report it as fraud right away.

You can see activity on your credit file and get alerts about new activity with a credit monitoring service. There are several credit card companies with free identity theft protection, so check if yours offers this. Make sure you also get a free credit report at least once per year to see all the data the credit bureaus have on file for you.

4. Don’t open suspicious links

Another popular way bad actors steal information is URL phishing. Here’s how this works: Scammers create a website impersonating a major company, such as a bank or online store. Next, they send you a link to that website, normally in an email or text message from an unfamiliar number. The message might say, for example, that you need to click the link to confirm information in your bank account or to take advantage of a limited-time sale.

If you open the link, the scammers can steal any information you provide. For this reason, don’t visit any links if you’re not completely sure of the sender.

5. Keep important documents in a safe location

Find a good place in your home to store documents that contain sensitive information. Ideally, these should go in a locked cabinet or safe. Although no form of protection is 100% secure, keeping documents locked away makes them much harder to steal.

On the subject of important documents, one of the most important is your Social Security card. Don’t make the mistake of carrying it around in your wallet, since this could be lost or stolen. Your Social Security number is a key piece of information, and if anyone gets access to it, they could open accounts in your name.

6. Set up a fraud alert or credit freeze for additional protection

There are a couple of anti-fraud measures consumers can take with their credit reports. You could place a fraud alert at the three major credit bureaus. When a creditor checks your credit, it will see this alert. It instructs the creditor to take additional steps to verify your identity, such as calling you at a phone number you provide in the alert.

You could also set up a credit freeze with the credit bureaus. Once a credit freeze is in place, the credit bureau won’t share your information with anyone. This prevents anyone from opening a new account in your name. Note that you will need to at least temporarily lift the freeze if you want to open any new credit cards or loans yourself.

Taking the right preventative measures, like protecting sensitive information and using strong passwords, is often enough to avoid identity theft entirely. If you want even more protection, or you’ve been a victim of identity theft before, you could put a fraud alert or credit freeze in place.

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The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Lyle Daly has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends JPMorgan Chase. The Motley Fool has a disclosure policy.

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