How to protect yourself against identify theft

Recent electronic security breaches at Sony Pictures and large retailers such as Home Depot and Target demonstrate the vulnerability of our personal data. Tech-savvy criminals are committing identity theft at record-breaking rates.

Specifically, online fraud has tripled in the last year. The Federal Trade Commission estimates that 9 million Americans suffer identity theft annually. Most people associate identify theft with credit card fraud.

However, a more nefarious form of identity fraud involves a thief using personal information to open bank accounts or take loans — thereby wreaking havoc on your credit and potentially causing personal financial losses.

Here are some steps to take to protect your personal information and financial security.

Rules of online engagement

As many of us forgo crowded malls in favor of shopping from our computers and mobile devices, vigilance online is increasingly important. When engaging in online shopping, passwords and PIN numbers should vary by account.

Also, avoid using personal information such as birth dates, names of family members, names of pets, or overly simplistic number arrangements. Dave DeWalt, CEO of the cybersecuity company FireEye, estimates that 80% of identity theft originates with stolen and weak passwords, with the most common being 123456. Strong passwords will include an assortment of numbers and letters, both lower and upper case, and should include special characters.

Be mindful of suspicious emails with embedded links. Such communications are often infected with viruses, malware, or spyware, which can be used to extract personal information. A good rule of thumb is not to open emails, or click any links, from an email that you do not recognize. A comprehensive virus protection and firewall package helps to combat most threats.

Thieves may also use bogus ads or websites to lure victims. If you are not familiar with a company, be sure to do some research before you execute any sort of online financial transaction. You should even avoid storing your personal information on the sites of trusted online vendors. If a company’s network is hacked, your information may be compromised.

Bank smart

Be aware of potential threats when conducting banking or other financial transactions. Always be conscious of your surroundings, particularly when using an ATM or typing in your PIN, and avoid carrying valuable cards and documents with you.

Keep in mind that no respectable financial institution will ask you for account information or your Social Security number over the phone, by mail, or online — so any such line of questioning should be a red flag.

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If a request for money or account information is made, fully investigate the source before taking action. When in doubt, ask or follow up with a banker.

At home, keep account numbers and passwords in a safe place. Shred sensitive documents before discarding them. Collect your snail mail in a timely fashion to ensure that billing statements and new cards arrive as planned and that any missing items can be identified.

Notify financial institutions immediately if you suspect fraud

More often than not, customers are made aware of fraudulent activity by their bank or credit card company, but when such activity is not detected, the responsibility lies with the customer to scrutinize his or her accounts and notify the bank or credit card company of lost or stolen cards.

Ideally, customers will report the loss or theft of their cards before any unauthorized purchases are made, which will absolve them of any liability. Most credit cards offer protection against theft, which typically caps a customer’s responsibility at $50.

However, debit cards and electronic bank transfers have a different set of protections, and there is a graduated scale of liability until 60 days, so time is of the essence. The Electronic Fund Transfer Act stipulates that problems must be reported within 48 hours in order for the customer to receive the same level of protection offered to those using credit cards — i.e., a $50 liability limit. After 48 hours, victims of electronic funds transfer fraud may be responsible for up to $500, and after 60 days they typically assume full liability.

If you suspect that you’ve fallen victim to identity theft, it’s also a good idea to contact one of the three major credit agencies — Transunion, Equifax, and Experian — to freeze your credit. This step will prevent the most severe damage by blocking a thief from opening an account in your name.

Better safe than sorry

While it can be unnerving to consider the many ways in which one might fall victim to identity fraud, it is much easier to focus on prevention than reconstruction. According to the Identity Theft Resource Center, it takes about 600 hours to restore your reputation after identity theft, so be sure to be vigilant and err on the side of caution when it comes to your personal financial data.

Contact your bank to further discuss questions or concerns regarding your bank accounts and financial security.

Lu Ann Bowman is senior vice president-retail banking at Wisconsin Bank & Trust.

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