There are several ways an individual taxpayer can minimize their risk of becoming an identity theft victim during the tax filing season.

Every individual needs to remember that their tax filing documents from employers, financial institutions, financial services firms, healthcare providers, insurance companies and others are often sent via the U.S. Post Office and email. Every time you or someone on your behalf mails a document with your sensitive information, dozens of eyes and hands come across your information before it is processed – thus increasing your vulnerability to theft. Even if you take precautions to guard your information, not everyone will be. This is often how theft occurs.

This allows identity thieves to steal your personal information from your mailbox, the U.S. Post Office, or your personal and business email accounts.

Consequently, the IRS has provided the below tips for taxpayers while they implement new methods to protect taxpayers and help victims of identity theft.

• Don’t carry your Social Security card or any documents that include your Social Security number (SSN) or Individual Taxpayer Identification Number (ITIN).
• Don’t give a business your SSN or ITIN just because they ask. Provide this information only when required.
• Protect your financial information in locked cabinets.
• Check your credit report every 12 months.
• Don’t email documents containing your private information.
• Protect your personal computers by using firewalls and anti-spam/virus software, updating security patches and changing passwords for Internet accounts.
• Don’t give personal information over the phone, through the mail or on the Internet unless you have initiated the contact or you are sure you know who you are dealing with.

If you believe you are an ID Theft victim you can take the following actions:

1. Contact the IRS Identity Protection Specialized Unit at 800-908-4490, extension 245.

2. Complete the IRS Identity Theft Affidavit, Form 14039.

3. Report incidents of at www.consumer.ftc.gov or the FTC Identity Theft hotline at 877-438-4338

5. File a report with the local police – it must be your local precinct!

Contact the fraud departments of the three major credit bureaus:

• Equifax – www.equifax.com, 800-525-6285
• Experian – www.experian.com, 888-397-3742
• TransUnion – www.transunion.com, 800-680-7289

6. Read Taxpayer Guide to Identity Theft — http://www.irs.gov/uac/Taxpayer-Guide-to-Identity-Theft

7. Place a security freeze with each of the 3 bureaus (we provide this as a simplified service called Credit Block)

 

 

Divorce is almost always a painful process for all involved. While your clients do their best to deal with emotional anguish, custody battles, and legal complexities, they may also be leaving themselves particularly vulnerable to an unseen danger: identity theft.

The Prevalence of Identity Theft

Every two seconds, another American falls victim to identity theft. It’s even happened to Michael Jordan, Bill Gates, Tiger Woods, and Beyoncé. But the real surprise is the way many people get their identities stolen: according to one study, 38% of victims discover a family member or relative was responsible for the theft, while 18% were victimized by a friend or neighbor.

During and after a divorce, ex-spouses often have more than enough ammo to commit fraud—as do their friends and family members. Consider some of the most common security questions: mother’s maiden name, what city you were married in, where you were born. Your clients’ ex-spouses would certainly be privy to that information and more.

Protecting the Children in a Divorce

It’s not just your clients’ identities that may be stolen—children whose parents are undergoing a divorce are also at risk. Whether the parent or family member covets the child’s clean record or he or she is simply being vindictive makes little difference—stealing a child’s identity can wreak havoc on their credit in adult life and may not be noticed for up to 18 years.

If your clients suspect their child’s identity was compromised, it’s best to pull their credit report from each of the three major bureaus. However, advise your clients to tread carefully: pulling the child’s credit report establishes a report record, making it easier to steal his or her identity in the future, as an unexpected request will now raise fewer red flags.

How to Defend Yourself From Identity Theft

First and foremost, your clients should close any and all jointly held accounts they may share with the ex-spouse. Secondly, they should pull their own credit reports and review them carefully for any fraudulent charges; federal law allows consumers to receive up to three free reports a year from AnnualCreditReport.com.

For ongoing protection, they should actively monitor their credit—the sooner they catch something wrong, the smaller the damage will be. More intensively, a credit block will put a hold on your clients account which requires explicit permission to be lifted. Both of these measures can be done by the individual, but they take time and expertise; a credit management advisor may be an ideal solution.

What To Do If Your Identity Has Been Stolen

Credit monitoring and blocking are great preventative measures, but what should your clients do if the deed has already been done? Pull a copy of their credit report immediately and review all inquires from the last 120 days. Once they’ve identified the instances of fraud, contact the creditors in writing to notify them of the identity theft. While many banks will often forgive fraud, they usually require it to be identified within 90 days or so.

Your clients should also write a letter to each of the three credit bureaus and place a fraud alert on their account—while this alert won’t stop a thief like a credit block would, it does encourage creditors to be extremely vigilant for a period of three months.

Finally, advise your client to complete and notarize an identity theft affidavit, file a police report, and send both to each of the credit bureaus along with a copy of their credit report with fraudulent items circled. Your clients may also call the Federal Trade Commission’s identity theft hotline at (877) 438-4338 (877-IDTHEFT) to contact other government agencies for further action.

Divorce is always complicated—many of your clients are probably too distracted to notice identity theft when it happens. By advising them to be prudent, vigilant, and intelligent about the facts, you can help prevent identity theft before it happens.

 

Take a moment to think of all the institutions that have access to your sensitive information:

• Credit card companies
• Mortgage providers
• Insurance companies
• State and Federal Government
• Past landlords
• Past and current employers
• Professional Licenses
• Utility companies including cell phones, cable, electricity, etc.
• Internet credit card transaction
• Department stores
• Family and friends
• And so on and so on……

Now realize that if any single one of them were to suffer a data breach your information is in the hands of a thief to open tradelines and wreak havoc on your personal life.  Your life is subject to the security procedures of every single entity that has ever obtained your information.  Ever.  And that’s a long time.

The odds aren’t in your favor, and that’s why armies of people are gathering in places like Russia, China, Nigeria and countries without the ability to hunt them down.  They are working round the clock to hack your favorite department store as you read this.

After seeing countless people from famous entertainers to accountants to billionaires  hire our firm to recover from theft; we designed a service that blocks every single entity from accessing your credit report.  So go ahead, be like the guy in that tv commercial that put his social security number on the side of a bus, we’ll make sure the thieves can’t use it.  Oh, and that guy wasn’t a client of our service and has had his identity stolen at least 13 times.

It’s happened to Michael Jordan, Bill Gates, and Beyoncé; every two seconds, another American falls victim to identify fraud—and affluent individuals are 43% more likely to have their identity stolen.

As a high-net-worth individual, you need to be extremely vigilant about protecting your credit. Your wealth makes you a tempting target for would-be identity thieves and phishing scammers. Add high-tech hackers to mix, and it’s easier than ever for the bad guys to ruin your credit.

Fortunately there are two powerful tools to prevent such issues: credit monitoring and credit file blocking.

Credit Monitoring Keeps an Eye on Your Activity

The sooner you catch something wrong, the smaller the damage. By closely watching all your credit activity on a daily basis, credit monitoring allows you or your advisor to spot fraud and keep your record clean.

With almost 13 million people falling victim to identify theft every year, credit monitoring is effective, but it’s can’t provide 100% protection. For that kind of security, you’ll need our next tool.

Credit File Blocking Keeps Identity Thieves Out

Imagine a medieval castle’s drawbridge. When a friend wants to come in or out, the bridge is pulled out and access is allowed—but when an enemy tries to enter, the bridge is drawn up and there’s no way in.

That’s basically how credit file blocking works: your advisor places an impenetrable hold on your credit report with the three major agencies. Don’t worry: this won’t affect your day-to-day use of credit cards or ongoing loans.

When it’s time to take out a new loan or line of credit, your advisor simply removes the block for a moment, then puts it back once your loan is secured.

Reach out to Regal Financial to learn more about we can effectively implement credit monitoring and credit file blocking.