Credit Freezes, Fraud Alerts and Best Practices

Jun 28, 2022 | Asset Protection, Everyday Finances

The thought of becoming a victim of identity theft or other financial scams can be stressful. Thankfully there are preventive actions you can take to help protect yourself. Here we discuss credit freezes, fraud alerts, and best practices that can help shield you from theft or lessen the impact if you have personal information stolen from you.

 

 

 

Warning Signs Your Identity Might Have Been Stolen

The goal is to avoid having your identity compromised; but if it is, there are several warning signs that should trigger your action.  Examples include:

  1. Your statements show purchases and charges that you didn’t complete.
  2. You see small charges on your account, sometimes for less than a dollar, representing small fraudulent “test” charges.
  3. You apply for a new credit card or loan and you’re denied.
  4. You’re no longer receiving paper statements that normally come in the mail.
  5. You receive a notification about problems pertaining to your tax payment(s) or tax return(s), or your tax return filing is rejected.
  6. Your credit card or other company notifies you of suspicious activity.

Fraud Alerts

A fraud alert allows creditors to access your credit report. However, they must contact you to verify your identity before establishing a new account, loan, credit card, etc. Fraud alerts are particularly useful if you’ve had your wallet lost or stolen, or if your personal information has been exposed by a data breach.

Key Facts:

  1. You can initiate a fraud alert if you suspect potential fraud.
  2. To implement fraud alerts you must contact 1 of the 3 credit bureaus – (Equifax, Experian, and TransUnion).
  3. A fraud alert is free to initiate, lasts for one year, and can be renewed.
  4. If you have already been the subject of identity theft, you can place an extended fraud alert which lasts seven years.
  5. You can easily remove the fraud alert by contacting one of the credit bureaus.
  6. A fraud alert does not affect your credit score.

A fraud alert only helps prevent new fraud. You should remain vigilant in monitoring all existing accounts, credit card bills, and insurance policies for fraudulent transactions.

Credit Freezes

A simple and effective way to protect your credit from being used is a credit freeze.  A credit freeze locks your credit by restricting access to your credit report. Simply put, it makes it harder for you or others to open a new credit account under your name.

Key Facts:

  1. You can initiate a credit freeze at any time, including as a preventive measure even if your identity has not been stolen.
  2. To implement a credit freeze you must contact all 3 credit bureaus – (Equifax, Experian, and TransUnion).
  3. A credit freeze is free to initiate and lasts indefinitely until you remove the freeze.
  4. You will be given a PIN or password when you initiate the freeze which can be used later to pause or suspend the freeze.
  5. A credit freeze does not prevent you from using your credit cards. However, you’ll need to remove the credit freeze if you wish to apply for a new credit card, obtain a mortgage or utilize your credit in other ways.
  6. A credit freeze does not affect your credit score.

A preventive credit freeze can be beneficial for many individuals, especially if you are not actively opening a new credit card or applying for a loan. However, it is important to understand a credit freeze is not an infallible way to protect against identity theft. Staying alert and aware of your bank account activity, credit card statements, and other assets is essential to protect you and allow you to act quickly in the event your personal information is compromised.

Best Fraud Protection Practices

While credit freezes and fraud alerts can be beneficial tools to help protect you, we highly recommend incorporating the following suggestions into your daily life:

  1. Create strong passwords for all of your accounts and change them on a frequent basis.
  2. Create a secure list of all emergency phone numbers for every financial institution you work with so that in case of theft or suspicious activity, you can contact them immediately.
  3. Keep your anti-virus and computer security features up to date.
  4. Check your credit report on a regular basis. You can get a free report every 12 months from each of the three major credit bureaus.
  5. Monitor your credit card, bank, and other financial accounts for any suspicious transactions. Regardless of the dollar amount, report any unusual activity using the phone numbers on your emergency list.
  6. Shred any documents with sensitive financial or personal information.
  7. Avoid clicking suspicious or unknown links in emails, texts, or online.
  8. Avoid allowing remote access to your computer.
  9. Avoid answering unknown phone calls (they will leave a message if it’s important).
  10. Enroll in dual authentication when possible. When you log into your account, you will receive a text, email, or phone notification. If someone steals your password, you will receive notice that they’re trying to log in.
  11. Trust your instincts: if you think it may be a scam, it probably is. Never give your personal information over the phone.
  12. If you receive a phone call from someone claiming to represent your credit card or financial institution, hang up and call the official phone number on your emergency list. If the issue is legitimate, they will be able to help you then.
  13. Consider using an identity theft protection company such as IdentityForce or Identity Guard. [1] These companies offer varying levels of service such as Social Security number monitoring, credit line activity, dark web monitoring, identity theft insurance, identity theft resolution and more.

While all of the steps noted above are important, SageVest does recommend utilizing an identity theft security system as an added layer of protection.  It’s a wise investment relative to risks and time that identity theft entail.

SageVest Wealth Management goes above and beyond the services of traditional investment and financial advisors. Our true wealth management approach means that we are always looking at the broad picture of your finances, including the safety and security of your assets. Contact us to find out how our personalized services can help you reach your life objectives.

Note:  SageVest Wealth Management is not affiliated with any identity theft protection companies or organizations noted in this article, nor does SageVest endorse any of these companies or organizations.  Readers should carefully consider the scope of services, costs, and other variables before working with any organization.

References

[1] https://www.usnews.com/360-reviews/privacy/identity-theft-protection

Prepared by SageVest Wealth Management. Copyright .
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