Attention Target and Neiman Marcus shoppers. If you got a
security breach notice, you’d best take it seriously. The latest comprehensive
study on identity fraud found that the threat of a crook using your stolen data
has soared.
If your data had been stolen three years ago, you only had about a 10 percent chance of falling
prey to identity thief. Today, one-third of those
who are affected by a security breach become victims of identity theft,
according to Javelin Strategy and Research, which has done comprehensive annual
studies of identity theft since 2006.
If your debit card information was stolen, the chance is
even higher – 46 percent of consumers with a breached debit card in 2013 became fraud
victims in the same year, according to the Javelin study.
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Worse, the risk is not isolated to fraudulent charges being
made on the card that was lost. Increasingly, identity fraud is moving to
“account takeovers” where the crook will change the address, password or phone
number on anything and everything from your utility bills to your PayPal
account, running up charges while locking you out.
And one successful fraud can spread like a cancer for two
reasons. First, U.S. industry relies heavily on “knowledge-based verification,”
says Steve Schwartz, president at Identity Guard, an ID theft monitoring service.
And the knowledge that serves as a key to your account is frequently the type
of information that’s shared openly on social media sites like Facebook. For instance,
your bank’s security questions might be the name of your best friend; your dog;
your favorite book or song. Sound familiar?
Secondly, if a criminal is able to hack in and nab one
password, they may have the keys to the rest of your password-protected
accounts, including your eBay, Amazon, email and bank accounts, too. The
reason? As you open more online accounts that require passwords,
it becomes increasingly difficult to keep track of them all, so we humans
respond by using one password for everything. Thus, if you can figure out the
password to someone’s email account and you may have the key to their credit
card and banking relationships too.
What can you do to protect yourself?
First, if you were a victim of a security breach and were
offered free account monitoring, take it. This will take some of the onus for
meticulously monitoring your accounts off of your shoulders. But make sure you
continue watching your accounts even after the free monitoring period expires.
Also consider putting a fraud alert – or even a credit
freeze – on your credit file. The fraud alert requires companies to contact you
before opening a new account in your name. A credit freeze stops anyone
(including you) from opening a new account based on your credit file. The
freeze is obviously a severe course, but may be appropriate for those who have
no immediate need for additional credit.
The fraud alert, meanwhile, is temporary but can at least make you a
less attractive victim by making it inconvenient for a criminal to take over
your credit identity.
Choose your passwords carefully and make sure that they’re not all the same.
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It is also important to pay attention to the type of data
you’re sharing publicly. Your close friends know your favorite song. The rest
of the world doesn’t need to. Take it off your Facebook account, or review your
privacy settings to make sure that data isn’t going out to any crook who might
be tempted to focus on you out of the millions of consumers in their vast
database of stolen information.
Opt in for two-factor authentication, where possible. In
many cases, your bank will offer the option of being contacted via email or
text anytime there’s movement in your account. That gives you the ability to
monitor fraudulent activity in real time and stop it before it gets out of
control.
Finally, ask for an identifier that’s not linked to your Social
Security number, suggests Al Pascual, senior analyst of security risk and fraud
at Javelin. The vast majority of banks and credit card companies use your
Social Security number is a primary identifier, allowing anyone with this
number access to your account. But Social Security numbers are too easily
stolen, he says. Ask to block your SSN as a form of identification and set up
something that is known only to you.