Portrait of an Identity Theft

E-mail “phishing” is becoming more and more common

The e-mails come in from a reputable financial institution or a well-known Web site like eBay, looking very official. They tend to report a small breach of your security that requires immediate attention, or a long-forgotten account. And they ask you to go to a professional-looking site, where you need enter only your name, a password, and maybe an account number.

It’s called “phishing,” and before you know it, your identity has been stolen. Such e-mail thievery is becoming more and more common, unfortunately, as more consumers fall for its tricks. Thieves can also steal your identity from out of your mailbox, or they can take it wholesale from places that hold your financial data.

It’s in the latter case that the numbers get scary. The credit bureau ChoicePoint has been looted, and BankAmerica announced that 1.2 million credit records had been tampered with. According to one estimate, over 50 million credit records have been exposed to thieves. And the well-to-do are particularly at risk; one enterprising thief (now in prison) made it his goal to steal the identities of every person on the Forbes 400. He got through more than a hundred of them before he was caught.

Fighting Back

The most obvious way to detect an identity thief, of course, is if unauthorized charges start showing up on your credit card bill, or withdrawals from your investment or bank accounts. Or if you receive bills or statements from accounts you did not open.

But that’s not the only way to tell. As identity thieves grow more sophisticated, they’ve learned to change the address on your credit card accounts so that the bills get sent elsewhere. If you miss a monthly statement from any of your accounts, notify the financial institution immediately. You can also order a free copy of your credit report once a year. Click on www.annualcreditreport.com to find out how to make sure nothing untoward has been happening to your credit record.

Keep a watchful eye on your personal information

The best defense, of course, is to keep from having your identity stolen in the first place. To that end, be careful which e-mails you respond to, and never enter a password or an account number into a Web site you’re unfamiliar with. Treat your Social Security number like another password, which in a sense it is. Other than your annual IRS payment, it doesn’t need to appear on any of your checks.

Changing passwords and keeping track of several different ones for all your varying accounts can be a nuisance, but using a hard-to-guess password, consisting of random words or letters, isn’t much of a bother. (Although if you suspect one password has been compromised, you should change them all.)

If you drop off payments at the post office, thieves won’t have a chance to take the checks from your mailbox. Similarly, you can arrange to pick up fresh checks from your bank rather than having those put in the mail. Finally, invest in a shredder, if you don’t have one already. We are all receiving tons of unsolicited credit-card and mortgage-refinance offers these days, and it only takes one of those filled out by a thief to create havoc with your finances. (For more information on preventing identity theft, the Federal Trade Commission [FTC] has a helpful site at www.consumer.gov/idtheft.)

The First Steps

File a police report if you are a victim of identity theft

If you do find yourself the victim of an identity theft, there are a number of steps you should take. First of all, don’t forget that this is a crime, and file a police or identity theft report with your local police or sheriff’s department as quickly as possible. This will also make clear to any financial institution that you’re not responsible for any fraudulent charges. You should also report the violation to the FTC, which maintains a secure online database—Consumer Sentinel—to help other law enforcement agencies catch identity thieves.

In addition to contacting creditors and financial institutions for any accounts that may have been breached, you should also notify the three major credit bureaus (you can do so through www.annualcreditreport.com). Tell them to flag your file with a fraud alert, and let them know that creditors should get your permission before opening new accounts in your name. If it’s relevant, you can also alert the United States Postal Inspection Service, the United States Secret Service, and the Social Security Administration; these organizations will pursue the thieves.

Keeping Your Money Safe

Protecting our clients’ wealth and well-being is the primary goal at Bernhardt Wealth Management. Our Strategic Client Consulting Process™ is designed to address all the aspects of a person’s financial life, from investment goals to personal security. It’s what we call a holistic approach to wealth management.

Would you like to learn about the benefits that this holistic approach can bring to you? Contact Bernhardt Wealth Management at www.BernhardtWealth.com, or give us a call at (703) 356-4380. Or you can e-mail me directly at Gordon@BernhardtWealth.com.

Just don’t include any passwords in the e-mail.

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