Identity Theft: What to Know and How to Protect Yourself and Your Family

Have you thought about identity theft lately? With tax season under wraps, you may be curious about what happens with your information out there in the ether. Unfortunately, sometimes your private data can fall into the hands of criminals.

As financial advisors working with high-earning tech professionals in Seattle, we understand that your digital footprint is extensive, and your financial assets are substantial. This combo can make you and your family prime targets for identity theft — a growing threat that can have devastating consequences.

Below, we’ll explore what identity theft is, how it happens, proactive steps you can take to protect yourself, what to do if you become a victim, and why involving your financial advisor is essential in safeguarding your financial well-being.

Identity Theft: The Basics

So what exactly is it? Identity theft occurs when someone unlawfully obtains and uses your personal information, such as your name, Social Security number, or bank account details, to commit fraud or other crimes. This can lead to unauthorized purchases, new accounts being opened in your name, or even legal issues if your identity is used in connection with criminal activities.

Common methods of identity theft include:

• Phishing and Smishing: Fraudulent emails or text messages that trick you into revealing personal information. (Don’t click on that suspicious link!)
• Data Breaches: Unauthorized access to company databases where your information is stored. (This is why you don’t use the same password at different places; we’ll cover that next).
• Mail Theft: Criminals steal mail to obtain sensitive information, such as credit card statements or pre-approved offers. (Consider getting a PO box).
• Public Wi-Fi Exploits: Interception of data transmitted over unsecured networks. (Be careful with what you send over a coffee shop, airport, or other public Wi-FI).

Though it can feel like there is little you can do to keep your information from falling into the wrong hands — especially in the event of a data breach — read on for a few ways to safeguard your personal data. 

Take Proactive Measures to Protect Yourself

We get it. With concerning news about the economy nearly every day, there’s a lot to worry about. You might not want to think about someone stealing your data, but awareness and smart digital hygiene can go a long way to preventing identity theft. 

Taking a few precautionary steps now can save you countless hours — and dollars — down the line. Here are a few tips to keep you ahead of the game:

1. Utilize Employer-Provided Cybersecurity Tools: Many tech companies offer cybersecurity solutions as part of their employee benefits — and they might be available at no cost to you. These may include identity theft protection services, VPN subscriptions, or security software. Take full advantage of these resources to add layers of protection, and check to see if your family is included in these protections as well.

    

2. Freeze Your Credit: Notified of a data breach? Placing a freeze on your credit reports with the three major bureaus — Equifax, Experian, and TransUnion — prevents new credit accounts from being opened in your name without your consent. This is a free service and can be temporarily lifted when needed.

    

3. Enable Two-Factor Authentication (2FA): Activate 2FA on all accounts that offer it, especially those related to banking, email, and social media. Yes, it’s annoying. However, 2FA adds an extra layer of security by requiring a second form of verification. (Do so, and you’ll thank us never, hopefully!).

    

4. Use Strong, Unique Passwords: STOP USING “PASSWORD123!” Instead, employ complex passwords that combine letters, numbers, and symbols. (If it looks chaotic, you’re doing it right). Avoid using the same password across multiple sites. Consider using a reputable password manager to securely store and manage your credentials.

    

5. Monitor Financial Statements and Credit Reports: Regularly review your bank statements and credit reports for any unauthorized activity. You can obtain free credit reports annually from each of the three major credit bureaus at AnnualCreditReport.com.

    

6. Secure Personal Documents: Keep sensitive documents, such as Social Security cards and passports, in a safe location. Shred any paperwork containing personal information before disposing of it.

    

Steps to Take if You Become a Victim

Even with the best protections in place, identity theft can still happen. Knowing how to respond quickly and effectively can make all the difference in minimizing the damage.

1. Report the Incident: Visit IdentityTheft.gov to report the theft and create a recovery plan.
2. Place Fraud Alerts: Contact one of the three credit bureaus to place a fraud alert on your credit report. This will make it harder for identity thieves to open accounts in your name.
3. File a Police Report: Report the identity theft to your local police department. This can help in disputing unauthorized transactions and clearing your name.
4. Close Affected Accounts: Contact financial institutions to close or freeze accounts that have been tampered with or opened fraudulently.
5. Keep Detailed Records: Document all communications and steps taken to resolve the issue. This information may be necessary for future reference or legal proceedings.

    

Talk to Your Financial Advisor About Identity Theft

Your financial advisor can be a key partner in both preventing and recovering from identity theft. We can help assess your vulnerability, monitor financial activity for early warning signs, and collaborate with financial institutions if fraud is detected. If your identity is compromised, we’re here to help you navigate the recovery process and protect your long-term financial goals.

Identity theft can be overwhelming, but you can rest easier knowing your financial assets are in safe hands. Contact Northern Lights Advisors today to learn how we can help you take worrying about your financial future off your plate so you can enjoy your time, and your family. 

Northern Lights Advisors is a fiduciary, fee-only Registered Investment Advisor (RIA) firm based in Seattle, Washington. The information in this article is not intended as tax, accounting, or legal advice. Read the full disclosure here.