7 Simple Measures That Can Help Protect Against Internet Fraud

For years we have been hearing about major internet fraud schemes. The question is, are you taking some simple steps to protect yourself? Security breaches are not going away anytime soon, so it’s critical that you take some measures to secure your finances. The following checklist provides easily implemented preventive measures that you can take now, followed by a list of tips.

1. Do you use complex passwords?

Best practice – Passwords should not be words and should always include numbers and keyboard symbols. Passwords should be at least 10 characters.

2. Are you checking your credit report at least annually for inaccurate information?

Best practice – Check your credit every four months with a different credit bureau. Each of the three major credit bureaus is required, by law, to provide you one free credit report annually.

3. Do you keep your passwords in a safe place?

Best practice – You should not store your passwords on your device.

4. If available, do you use two-step verification?

Two-step verification is a process that involves two authentication methods performed one after the other to verify that someone requesting access is who they are declared to be. It adds an additional layer of security to your account. The first step is your password. The second step involves receiving a security code via one of a variety of ways depending on the option selected by the user, including text message, email or phone call. The security code is then entered as a second password.

Best practice – Always use two-step verification if it is offered. It only takes an additional 20 seconds and it is well worth the “inconvenience” of an additional login step.

5. Do you have a freeze on your credit reports?

Effective September 21, 2018, credit bureaus can no longer charge for credit freezes. Under the new law, Equifax, Experian and TransUnion will be required to let consumers freeze and unfreeze their credit reports free of charge. They must also implement procedures to make it easier for consumers to do this.

Best practice – Keep your credit reports frozen at all times. Unfreeze them only when you know a third party will be requesting your credit reports.

6. Do you get alerts from your bank and credit cards for transactions over a certain amount?

Transaction alerts are instantaneous, so if you see an alert for a purchase or transaction that you didn’t make, it’s easy to contact your bank or credit card company and shut down the fraudulent activity. Alerts can be received via text or email.

Best practice – Set up alerts with a low threshold so you can monitor your banking and credit card transactions for unauthorized use.

7. Do you shred documents that contain your ID?

Best practice – Use a simple home base shredder on a regular basis. If your community offers shredding days, take advantage of this service.

Here are some additional tips to reduce the likelihood of internet fraud:

1. Use complex passwords.
2. Do not trust cloud password storage sites. You might want to keep all passwords on a handwritten ledger in a secure place. Keep a second copy at another location in case of fire or theft.
3. Always use two-step verification when available.
4. Get texts from your bank and credit cards for all transactions over $10 and other alerts. Doing so will significantly increase the likelihood that you will quickly identify any fraudulent transactions.
5. Shred all your ID documents on a regular basis using a basic shredder.
6. Freeze all your credit reports.
7. Thoroughly review all your bank and credit card statements for unauthorized transactions.
8. Change credit card numbers at least every other year.
9. Never answer unknown phone calls.
10. Never open unsolicited emails. Don’t click on links from unknown email sources for fear it is a bogus email trying to get personal information.
11. Install anti-virus software on your computer.
12. Never use a third-party WI-FI (hotel, restaurant, etc.) to conduct financial transactions.
13. Use passwords for your cell phone and tablet.

As a society we are becoming more and more reliant on the internet. At the same time, internet fraud is becoming even more prevalent. Therefore, it is imperative that you are proactive in securing your financial information—don’t simply rely solely on third-party controls (which have failed in the past and will fail again in the future – just ask Equifax, Target or K-Mart).

If you have any questions about this please contact your ALL tax advisor or call us at 617-738-5200.