Although tax time is nearly behind us for another year, it’s important to continue to safeguard your identity. In recent years, tax time has become synonymous with identity theft, as scams and cases of identity theft tend to spike during the first few months of the year.
But why?
Consider the amount of personal information that’s exchanged during tax season. Important and identifying documents, like W-2’s and Social Security numbers are out of the filing cabinet and on HR’s desk. For an opportunistic identity thief, it doesn’t take much to physically access your information during this time.
Scott Mitic, a security expert, recently sat down with The Huffington Post to discuss why identity theft soars during tax season. “Tax time is among the most vulnerable for consumers with all of their valuable personal information being compiled and shared. It’s the perfect moment for a consumer’s identity to be compromised,” he said.
But just because tax time is over, doesn’t mean that you are safe. After your home is burglarized, you usually find out straight away when you notice that the windows are broken and the tv has vanished. But identity theft is insidious because it can take weeks, months, and in some cases years before you realize that someone is defrauding you.
Instances of identity theft have always peaked around tax time, but since the emergence of the dark web, the number of victims has grown exponentially.
Back in the analog era, if you stole an identity it would be fairly useless to you unless you planned to use it yourself. Now, you don’t need to use someone’s identity in order to make a quick profit from it.
The dark web, a highly secretive area of the internet only accessible by using a special browser, has thousands of black marketplaces where an identity can be bought and sold for next to nothing.
The steady drumbeat of data breaches have also contributed to a year-round uptick in cases of identity theft, so just because tax time is over doesn’t mean you should get lax about identity protection.
5 Ways to Protect Yourself From Identity Theft
There are a few simple ways to protect your identity all year round, so you can focus on your financial health without worrying about identity theft.
1. Don’t Give Out Your Social Security Number
In the last three months, I visited a new chiropractor and a new dermatologist. When I arrived, I was handed a printed piece of paper to fill in.
I had to give out all the usual information — any medications taken, my address, my emergency contact — but what really surprised me was that both practices asked for my Social Security number.
This A4 printed document would now contain nearly all my personally identifying information, such as my address and date of birth, along with my SSN. To make matters worse, it would be stored with my health insurance information. Health insurance information is another juicy target for scammers on the dark web.
I don’t mistrust either my chiropractor or my dermatologist, but I had to wonder, how is this information stored? Is it secure? Who has access to it? And why is it necessary?
One form even asked for my driving license number!
I declined to write down any information that I deemed excessive or unnecessary, and I still received my treatment as normal.
Adults aren’t the only ones who are the targets of identity theft. An especially lucrative target is young children. The Social Security numbers of children are extremely valuable on the dark web because children have no prior credit history.
This means that any name and date of birth can be paired with an unused SSN. Additionally, identity thieves may be able to use a child’s SSN for years while avoiding detection.
Keep that in mind when filling out any forms for your kids. After-school activity clubs, sports teams, even study groups occasionally ask for SSNs.
If it’s not absolutely imperative you hand it over, don’t do it.
2. Opt Out of Prescreened Credit Offers
Prescreened credit offers are no good! They block up your mailbox, end up in the trash, are a waste of environmental resources… and are gold to identity thieves.
How secure is your mailbox? It can be tempting to keep the mail key in an easy-to-access location, like under a plant pot or the doormat.
But should a prescreened offer fall into the wrong hands, someone else could apply for a loan or credit card in your name.
Even if your mailbox is totally secure, a thief can still rummage through your trash can to find tantalizing details about your identity — and a prescreened offer does most of the hard work for them.
Save your credit, and save the environment, by opting out of prescreened offers. It’s super easy to do and puts an end to annoying junk mail.
You can choose to opt out for five years, by visiting Opt Out Pre-Screen online or calling 1-888-5-OPT-OUT.
You can also choose to permanently remove yourself from prescreened offers by visiting the same website and returning a signed Permanent Opt-Out Election form.
3. Check Your Credit Report Regularly
If you know your credit score, do you really need to check your credit report? As for checking the credit report of your kids, why would you? They don’t have credit yet, right?
Here’s a pro-tip. Pull your own credit report, and the credit reports of your children, every year.
Young children should have no credit reports, so if something comes back, it’s a solid sign that their identity has been compromised.
Review everything on your credit report, and make sure that it’s legit. If you see anything that looks unfamiliar, report it immediately.
4. Pay Attention to Your Bank Accounts
With multiple credit cards and an addiction to Amazon, money can fly in and out of your bank accounts like Golden Snitches from Harry Potter!
Like the fabled Golden Snitch, catching a fraudulent transaction can be tricky — especially if you don’t check your bank accounts frequently.
Start a good financial habit of checking in with your bank balance on the reg. Make sure that those Amazon payments align with what you’ve actually purchased, and follow up with every unknown purchase until you can trace it back to its origin.
Credit card fraud is one of the most common forms of identity theft. The good news is that most banks will reimburse you for any fraudulent purchases if you report it within 24-hours.
Which is why you should check your bank account every day!
If you’re not already signed up for internet banking, go ahead and do so. Most major banks have mobile apps, which makes checking your accounts easy-peasy.
5. Don’t Throw Away Sensitive Data
If you have any memories of your dad feeding buckets of paperwork to his trusty shredder, you are probably a 90s kid! But sometimes dad really does know best.
Although identity thieves have had undergone a high-tech makeover, sometimes the old tricks are most effective. We touched on it briefly before — going through the trash.
There’s a reason why paparazzi have been pawing through the trash cans of celebrities for decades. They’re full of secrets!
Don’t throw anything in the trash that has personally identifying information on it. Personally identifying information can include:
- Your first and last name
- A date of birth
- A Social Security number
- Driving license, passport, or immigration numbers
- An address
- Details of bank accounts, store cards, and credit cards
- Telephone numbers
In general, there are several documents that you should never throw away. These include:
- Canceled and voided checks
- Correspondence from banks or creditors
- IRS documents
- Travel documents
- Usernames and passwords
- Anything containing your child’s information
- Junk mail
The last one might surprise you. Unfortunately, a clever crook can scan the barcode associated with your junk mail to reveal more information about you. Remember, it may only take a crook a few seconds to steal your identity, but the consequences are long-lasting and can put a strain on more than just your finances.
Err on the side of caution, and invest in a Dad-approved trusty shredder.
My husband has another unique way of destroying this data — we keep it in a trash bag with our camping equipment. The next time we light a bonfire under a starry sky, the kindling is none other than a few months worth of sensitive paperwork! Who knew copies of old tax returns could be so romantic?
