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How to Protect Your Personal Financial Information From Being Stolen
News reports of high-profile data breaches at Target, Neiman Marcus, and other retailers have many people wondering how to prevent this from happening to them. Thefts like these result in financial losses to consumers with increasing frequency, and affect all of us in some form or another. Businesses are required to tighten their security measures, and there are steps you can take to protect yourself.
What hackers do
First, let's look at how hackers steal. Their target is your personal financial information such as social security numbers, bank accounts, credit cards, drivers license numbers, and email addresses. The more the data set is complete and linked to a person, the more valuable it is to the hacker and the more attractive it is to steal. Hackers will then sell that information to criminals (often eastern European organized crime groups) who use it to make fraudulent purchases or establish bogus credit relationships at big box retail outlets in order to make even more fraudulent purchases. When personal financial information is tied to email addresses, hackers have an easier time crafting phishing messages designed to hijack personal financial accounts.
What you should do to protect yourself
How can you protect yourself from this online thievery? The answer lies in a multi-layered strategy, not one simple "silver bullet." Here are our top recommendations:
- Diligently monitor your bank accounts, weekly at a minimum.
- Avoid enabling online banking features that easily move money out of accounts, such as wire transfers or ACH (automated clearing house), unless you have a pressing need to do so.
- Don't use debit cards for purchases, especially online. Credit card losses are typically much easier to recover than losses from stolen debit cards.
- Thoroughly monitor credit card activity. Most cards offer online access to make it easy to monitor card use.
- Consider using only one of your cards for online purchases, which makes it easier to keep an eye on activity.
- Keep credit card receipts. Then balance and reconcile your card accounts the same way you balance your checking account.
- Utilize automated alert functions provided by bank and credit card accounts. These often mean defining transaction limits, and you'll receive email or text messages sent if you go over the limit. Some banks and credit cards also allow you to configure alerts for transactions where the card is not present.
- Report suspicious card activity ASAP.
- Use a credit monitoring service like FreeCreditReport.com (which is actually not free) or Credit Karma (there are others). Set up alerts for new activity (like new accounts) to be delivered by text message.
- If you cannot perform the above items with diligence, use an identity protection service such as LifeLock or Identity Guard.
- Avoid mobile apps (such as mobile banking apps) that store credentials (user ID and password) in clear text on the phone or device.
- Be very wary of website links that arrive in emails. Hackers use bogus links to send victims to rogue sites that deliver malicious software (malware) that can steal your passwords and other personal financial information. If the email appears believable, navigate to the site with your browser rather than following the link whenever possible.
Doing business in the online world involves new and ever-changing risks, but it clearly can be done safely by following these practices and by being alert and diligent. For even more information and tips, check this identity theft resource page from the Federal Trade Commission.