Ten Tips for Safeguarding Your Financial Information

More than 70 million Americans were affected by identity theft and fraud from 2012 through 2017, according to research from Javelin Strategy & Research. Over this time period, fraudulent acts resulted in more than $105 billion in losses. From online hacking to phone scams to document stealing, criminals are increasing the repertory of tricks they use to separate consumers and investors from their money.

Even if you totally “go off the grid,” pay cash for everything and keep your money under your mattress, there’s still no guarantee that you’ll be immune from scammers and criminals.

But there are a number of common-sense steps you can take to safeguard your financial information both at home and online. Here are ten suggestions to get you started.

1. Secure your key financial documents

It’s tempting to keep your bank, credit card and investment account statements and tax returns in a filing cabinet or desk drawer. But if anyone comes to your home when you’re not there, it won’t take much work for them to find and steal your confidential information.

Instead, keep all of your printed statements in a fire-proof safe or in boxes in a location where would-be thieves will have a hard time finding them. A dark corner of your attic, maybe under the holiday decorations, might be a good spot. 

And don’t think that you’re protected if you’ve “gone paperless.” Hackers can get access to all of the electronic statements and tax returns you store on your computer. Move them to external hard drives or flash drives. or even a reliable Cloud storage provider, and delete them from your devices.  You can always restore them later.  And keep these backup devices in a safe or somewhere that’s hard to find.

2. Dispose of documents safely

Believe it or not, many neighborhoods are plagued by identity thieves who regularly go through curbside trash barrels and recycle bins looking for old credit card and bank statements and tax returns. Safely dispose of these documents either by shredding them or cutting them into ribbons before you bag them.

3. Write the full year on checks and documents

Okay, this might sound a bit obsessive, but if you’re like most people, you sign the last two digits of the current year on a check or dated document (i.e., “1/23/20”). But someone bent on causing financial chaos could change that “end of date” to a past or future year, such as “2017” or “2021.” To avoid this risk, get in the habit of writing out the full year—i.e. “2020”--on these documents.

4. Defend your online accounts against “password stuffing”

“Password stuffing” is a new strategy criminals are using to hack into online accounts. It starts when they steal your user ID and password from a particular web site. From there they use automated bots to enter that same ID/password combination on many different sites, reasoning (often correctly) that many people use the same login credentials on many sites.

To reduce this risk, try to use unique passwords for every site. If it’s too hard to remember them all, try varying a core phrase a bit. For example, if you normally use the password “love2shop!” on many sites, consider creating variations that add random characters before or after it (or both), such as “1Alove2shop!” or “Ulove2shop4I! Or consider using a secure password manager (see #5 below) to enter them automatically. 

5. Use a password manager

Who doesn’t have trouble keeping track of the dozens of passwords we use every day? A reputable online password manager can alleviate this burden. These web or smartphone applications can store all of your user names and passwords and automatically enter them for you when you visit a web site. The only password you need to keep track of is the one you use to log in to the password manager. Once you install the application, you can use it with multiple devices. Best of all, many of them are free. 

If you don’t want to use an online password manager, there are also a number of portable password vaults that let you take your login credentials wherever you go.

6. Use multi-factor authentication with critical logins

Many banks, brokers and online retailers either require or allow you to use multi-factor authentication when you log in to prevent unauthorized access. Generally, once you log in from a computer or smartphone the site will send a one-time code to your cell phone or email account, which you’re required to enter before you get full access to your account.  

If you can, add multi-factor authentication to all of your critical account logins. And get in the habit of logging out of banking, financial, credit card and online retailer sites when you’re done using them.

7. Erase your browser history

Many web sites allow you to remain logged in to your email or online accounts, leaving you wide open to unauthorized access. Instead, set up your browser to automatically erase your browsing history—including cookies—every time you exit the application. You’ll have to manually log in to each site every time you return, but this is a fair tradeoff for added protection.

8. Never store credit card information on an online retailer web site.

One of the main ways hackers gain access to credit card accounts is by stealing the credit card numbers and security codes many customers save online. If you’ve done this, make an effort to remove this information, and only enter it when you make a purchase.

9. Don’t turn “away time” into burglary opportunities

When you’re on vacation, it’s tempting to post photos from your trip on Facebook, Instagram or Twitter. But when you do this, you’re letting everyone in your social network know that you’re far away from home. Savvy burglars scouting for empty homes can find ways to manipulate your “friends” to gain access to your posts. Resist the urge to publicize your absence while you’re away, and don’t post those selfies until you’ve returned home. 

Likewise, if you’re using an “out of office” message at work, only mention that you’re currently away from the office. Never say that you’re on vacation or out of town. Burglars have been known to send blast emails to lists of work addresses simply to collect “out-of-office” responses that that mention vacations, weddings, or other away-from-home events.  

10.   Protect your credit reputation

Sometimes you may not know if your credit card information has been stolen—or new cards have been opened in your name—until weeks or months have passed. Be proactive in protecting your credit-worthiness by requesting any or all of the following from the three main credit reporting agencies:

  • A free annual credit report;
  • A credit freeze, which can help prevent new bank and credit accounts being opened in your name; and
  • Fraud alerts, which require creditors to take extra steps to verify your identify before opening new accounts.

Implementing these strategies requires a commitment of time and may be inconvenient. But in a world where scammers and identity thieves are constantly thinking up new ways to rip people off, it’s up to you to eliminate opportunities for these criminals to make you their next victim.

 

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This article was written by Joelle Spear, a financial advisor and Partner located at Canby Financial Advisors, 161 Worcester Road, Framingham, MA 01701. She offers securities and advisory services as an Investment Adviser Representative of Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser. She can be reached at 508.598.1082 or [email protected]

 

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