Following the recent Anthem data breach, identity theft and online security are front of mind for many of our clients. Identity theft is becoming more and more prevalent and the consequences can be devastating. So what can be done to protect your identity? What steps should you take and what might be going too far?

First, let’s discuss common ways in which identity theft can affect you. Opening new lines of credit is probably the most common approach. The amount of potential damage depends largely on the amount of credit that is obtained—therefore, high-net-worth individuals may have a greater monetary value associated with their risk. The more your identity is worth, the more damage someone can do with it. With that being said, regardless of your income or credit, significant damage can occur when your identity is stolen.

Another common form of identity theft involves tax fraud, the filing of false returns. With the right information, someone could file state and/or federal returns with your name on them, request a refund based on invalid information and even collect refund payments and get away with the money, leaving you potentially on the hook with the IRS or state. That’s a position that no one wants to be in. While the IRS and many states are now proactively taking steps to find fraudulently filed claims for refund, ultimately the responsibility still lies on each individual to protect their self.

As for solutions, there are many identity protection services on the market. These services do have value, but you should be very careful not to assume that you are secure just because you have invested in a protection service. Many identify protection services are reactive. They notify you of a breach once it has occurred. This may provide a short window of opportunity to lock down your credit and prevent unauthorized activities.

What these services do not do is prevent identity theft in the first place. If you subscribe to an identity monitoring service, be sure to understand exactly what it does – and what it does not do.

Regardless of whether you use a monitoring service or not, there are some steps that you can take on your own to better protect your identity:

1. Check your credit reports regularly. You can rotate between the 3 credit bureaus to get the report free of charge
2. If you feel your identity may have been compromised, like in the case of Anthem, you can place a freeze on your credit with each of the bureaus. This will completely lock down your credit, but will need to request that the freeze be lifted each time you attempt to get credit yourself
3. Subscribe to large charge, international charge and charge without card present alerts on your credit cards and/or bank accounts
4. Be vigilant if you notice that magazine or other subscriptions are no longer coming to your house (this is one way a thief can begin to establish a new address for you)
5. Drop your outgoing mail in a public place, not in your home mailbox
6. Always shred your mail, placing account, credit and tax information in an unsecure location is a good way to have your identity taken
7. Don’t carry your Social Security Card with you unnecessarily
8. Protect your personal computers by using firewalls, up-to-date virus protection software, and secure networks
9. Don’t give personal information over the phone, through mail or Internet unless you are 100 percent sure who you are talking to
10. File your tax returns early if possible. If you file before a potential fraudulent return, you reduce their chances of success
11. Keep an eye out for any notices from the IRS that could indicate fraud has occurred – such as a notice that more than one tax return was filed.

If you have any questions regarding the security of your identity, don’t hesitate to call us at 317-398-9753 or email at [email protected].