Identity theft happens when criminals access your sensitive personal information to take out loans, open fraudulent accounts, falsify tax returns, purchase properties, or break the law under false identity.  In this time of social distancing, there has been a rise in cyber security breaches attributed to the increased use of electronic signatures and online activity.

If you become a victim of identity theft, it can be very cumbersome to fix and can affect your ability to use your credit in the future.

There are a couple key ways to proactively protect yourself from identity theft.  The first is to sign up for a credit monitoring service.  While we have no affinity to a particular company, LifeLock and Complete ID are two we are familiar with and have used.
Identity protection services can help provide peace of mind and monitor the following:

• Dark Web Surveillance
• Financial Account Takeover
• Non-credit identity monitoring
• Social security number/identity monitoring
• Payday loan monitoring
• Criminal record monitoring
• Mail change alerts
• Child monitoring

In addition to the monitoring and notification of an attempted breach, one of the most important benefits to utilizing a service is that identity restoration agents can work with you to help resolve issues.  This is a major time saving factor to consider.  Furthermore, there is potential for reimbursement of stolen funds.

A second identity theft protection option is to consider placing a security freeze on your credit report with the 3 major credit bureaus - Equifax, Experian, and TransUnion.  This makes it more difficult for identity thieves to open new accounts in your name because most creditors need to see your credit report before they approve a new account.  If they can’t access the information, they may not extend the credit.

Placing a credit freeze on your report does not affect your credit score or your ability to request your free annual credit report from AnnualCreditReport.com.  It also does not prevent you from opening a new account, however, to open one, you will need to contact the credit bureaus online or over the phone to lift the freeze temporarily.  The credit bureaus usually assign you a pin or password in order to contact them and there is no cost to lift the freeze or put it back in place.

While a freeze is a significant help, it does not protect against all types of identity theft.  As an example, in the event your credit card number falls into a fraudster’s hands, a credit freeze will not prevent financial loss.  The good news is that most credit card companies will work with you in the event of a breach or unauthorized use.  In general it is recommended that you use a credit card for transactions as opposed to a debit card that is linked to your bank account due to the increased protections that are in place and limit of loss.

In order to place a freeze on your credit reports, you will need to contact the three nationwide credit bureaus:

      Equifax:   https://www.equifax.com/personal/credit-report-services/credit-freeze/
      800-685-1111

      Experian:   https://www.experian.com/freeze/center.html
      888-EXPERIAN (800-397-3742)

      TransUnion:   https://www.transunion.com/credit-freeze
      888-909-8872

We have all heard stories of people we know whose identity has been compromised, and the nightmare it was to resolve.  In our opinion, the benefits of using identity protection measures and services well outweigh the cost.

We are happy to discuss your specific situation or address any questions you may have.  Please feel free to contact us.

Your Black Diamond Planners Team,  

John Duckworth, CFP®
Brandy Harrington, CFP®
Chris Joyce
Joel Riley, CFP®
Jeanne Thomas

This commentary was created by Black Diamond Planners and is for informational purposes only. The commentary herein does not constitute investment advice, tax advice, or legal advice.