The Best Shield For Protecting Your Identity? Try Adopting 4 New Habits
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The dark web. Hackers. Your identity for sale. Fraudulent credit card accounts. Unfortunately, last week’s news of the mammoth data breach of the consumer credit reporting giant Equifax and the reported millions of individuals’ social security numbers and personal data at risk is just the latest example of the ongoing dangers associated with today’s digital age.
Worried yet? Ok, clearly, me too. It’s obvious we’re all going to need to take charge of protecting ourselves as the Equifax news provides the latest reminder that we shouldn’t assume financial privacy and security. The scope of this data breach should serve as a catalyst for embracing a regular method for guarding against financial fraud or identity theft into the future.
Insights from the field of behavioral economics, which blends an understanding of both economics and cognitive psychology, demonstrates our tendency to overvalue what’s pressing now — the present — over what can wait — the future. This idea of present bias may be inconsequential when it comes to everyday tasks, but when you’re talking about being vigilant about monitoring your credit and watching out for financial fraud, it could put you and your family at risk. So while the Equifax scare is top of mind, (and maybe you’ve already taken steps), make a plan for the future. And make it a new, automatic habit.
Freeze your credit and schedule ongoing credit monitoring
If you haven’t already done so, sign up with Equifax, Experian and TransUnion. Meanwhile, put yourself on a schedule to check your credit for free. Create calendar reminders to monitor it every few months. Such ongoing credit review was always prudent, but now more necessary than ever if the latest reports of credit card fraud spikes last month is any indication of the ongoing risks.
Add extra layers of security
Create a plan to change passwords — and stick to it. Even making use of an online calendar to remind you to change passwords will prevent forgetfulness. Pick a schedule — monthly or quarterly — simply “repeat” that schedule into the future. Or use a password manager. (Here are some good tips for doing so.) With existing credit cards, consider adding a verbal password. (Having personally experienced the theft of my credit card points recently, I benefitted from some excellent advice to add a new, verbal password that would prevent any potential thief from impersonating me online when they clearly already had sufficient security information to transfer accumulated points to another account.) Establish email alerts too, notifying you of any change of email accounts or phone numbers associated with your accounts.
Avoid maintaining a large balance in a checking account
An experienced banker shared this tip with me: though your deposits are guaranteed by the FDIC (up to $250,000 per depositor and per account) a thief who manages to breach your account would have immediate access to your funds, even if you reclaim the money later. Save yourself any worry by scheduling automatic transfers from other accounts before regularly scheduled bills are due.
Use pre-paid credit cards or a digital payment service like PayPal
If you’re really paranoid about online security, this approach creates even more distance between you and your charges.
Does it all sound extreme? Perhaps. It could turn out all these efforts to protect yourself will be like having an insurance policy it turns out you never really needed. But that’s the best possible outcome right now. Today’s litmus test for whether to add some extra protections is a simple one: how much do you trust your information is secure?