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Nearly 12 million adults were victims of identity fraud last year, up 13 percent from the previous year, according to Javelin Strategy & Research.
Identity fraud or theft occur when thieves use your personal information to commit a crime, whether that means stealing your credit card details or using your Social Security number to set up a fraudulent bank account. The California Society of CPAs (www.calcpa.org) recommends these steps to take after—and even before—identity theft happens.
One of the best ways to prevent identity theft is to understand the many ways that it works. It can involve devices that steal your credit card numbers when you make a purchase, or a sophisticated hacking scheme, but there are also many low-tech methods.
Sometimes thieves will comb through dumpsters, for example, to find your bank or investment account statements or other confidential documents. If you think that this has happened to you or is likely to happen, consider buying a paper shredder or tearing up your statements into small pieces before you throw them out. Doing so makes it harder for thieves to glean information from them.
Phishing has been around for a while, but scam artists continue to come up with new angles, so it’s wise to be on guard. Phishing generally involves a fake email or other communication that’s designed to look like it came from your bank or another financial institution or even a government agency. The message urges you to click on a link where you’ll be told to reveal some confidential financial information.
If you get this kind of communication, phone the organization that supposedly sent it to confirm that it’s legitimate. In most cases, you’ll probably find that it is not.
Identity thieves don’t just steal your credit card number; they may also set up completely separate accounts in your name. Then they’ll neglect paying the bills they run up. One way to find out if this is happening to you is to monitor your credit ratings with the three major credit rating agencies.
If you discover accounts you’ve never heard of, you may be able to prevent some of the consequences of identity theft, including the damage it can do to your credit rating.
Many people reveal their full birthdays and personal details such as pets’ or school names on Facebook or other social media accounts. Unfortunately, this is just the kind of information that financial institutions and other organizations use to verify your identity before allowing you access to your account.
While it’s fun to share these details with friends, there’s a great danger that thieves will use it to clear out your bank account, run up charges in your name or open an account you know nothing about. Before you pump up your online profile, consider how an identity thief might use those details.
If you have been the victim of identity theft, or want to avoid becoming one, turn to your local CPA. He or she can offer advice on protecting your confidential details, or recovering from a theft, as well as any other financial concerns you may have.
Copyright 2012American Institute of Certified Public Accountants.
The Money Management columns are a joint effort of the AICPA and the California Society of CPAs as part of the profession’s nationwide 360 Degrees of Financial Literacy program.
To listen to podcasts with more financial tips, go to http://www.calcpa.org/Content/community/financialempowerment.aspx.