Over 50? 12 Critical Tips to Protect Yourself from Financial Fraud and Identity Theft

Last week it was broadly reported that the credit reporting agency Equifax suffered a major cybersecurity breach that put us all at a greater risk of financial fraud. Experts estimate that hackers stole the data — Social Security numbers, birth dates, addresses, driver’s license numbers, credit card information and more — of 143 million people. Financial fraud is a major problem for everyone.  However, it is especially concerning for people 50 and over.  According to the AARP, older Americans lose $3 billion each year due to financial fraud and the average victim loses $120,000.  What’s more concerning is that one out of five older Americans are victims of financial exploitation and seniors don’t usually have the resources to recover from major fraud.

What is Equifax and Why is this Security Breach So Concerning?

Equifax is one of the three major consumer credit-reporting agencies. They have data on 820 million consumers.  Credit reporting agencies — also known as credit bureaus or credit reporting companies — are agencies that collect financial information about people and issue credit reports based on that information. The main concern is that the data that hackers accessed in the Equifax security breach could be used by criminals to apply for credit cards or loans, access bank accounts or establish phony profiles online. Ack.  Will you be a victim?  Is it already you?  Not knowing is extremely worrying. Do these 12 things now to protect yourself from this credit breach and other sources of identity theft and financial fraud:

1. Add Fraud Alert to Your Credit Report

It is advised that you contact the three biggest credit reporting agencies — Equifax, Experian and TransUnion and establish credit alerts.  This will insure that the credit agency will contact you if someone tries to apply for credit in your name.

2. Really Worried About Financial Fraud? Consider Freezing Your Credit

A credit freeze insures that ONLY companies who already have your information can access your report.  This means that if a hacker tries to apply for credit or a loan in your name, they will not be able to attain a credit report and therefore will not be able to proceed with their application. It may cost around $10 to freeze reporting with each credit reporting agency.  (It will probably also cost an additional $10 anytime you want to temporarily unfreeze reporting to allow someone to access your report.) You can freeze your credit reports as follows:

3. Check Your Credit Report

You are entitled to one free credit report from each of the three major agencies each year. NOTE:

• You should refrain from getting a report more than once a year since it could impact your credit score.
• And, ideally you spread out getting the three reports, securing one every four months.

Request credit checks here. Look carefully at each report for any suspicious activity and make this activity part of your routine.  Set quarterly reminders.

4. Keep an Eye on All Credit Card, Bank and Loan Statements

Something else that should be part of your routine each month is carefully reviewing all credit card, bank and loan statements.

• Review each item and make sure you remember all of the transactions.
• On credit cards, look not just at charges but also any prenotes or pre-authorizations.  (Sometimes legitimate businesses like hotels will check to make sure that a card is valid, but they are not charging anything.  However, identity thieves might also do this.)
• Contact the bank or credit card issuer immediately if you notice anything suspicious.

5. Pay Attention: Make Sure You Receive Your Social Security Benefits

Someone who has your personal information, especially your Social Security number can contact the Social Security Administration and ask that your benefits be sent to a different address or have it wired electronically into a different account. Therefore, it is best that you know the date when you are supposed to receive your benefit and carefully monitor to make sure that your money is received.  Contact Social Security right away if you do not receive your benefit.

6. Guard Your Medicare Card and Monitor Your Explanation of Benefits

If you are already enrolled in Medicare, you probably know that the program uses your Social Security number as your identification number.  Because of this, you will want to guard your Medicare card carefully and only show it when you really need to. Also, you should carefully monitor your monthly “Explanation of Benefits” statements.  Make sure you recognize all of the services that are listed to be sure that someone is not stealing your identity. Luckily, Medicare is revamping their cards next year.  The new cards will no longer reveal your Social Security number.  However, the transition to new cards and the mailings to distribute these cards represent more opportunities for fraud — be careful.

7. Enlist the Help of a Trusted Family Member

No, you don’t need to give up all control over your money, but enlisting a trusted family member to look over your shoulder and help with your finances as you age is a good idea. This also goes for keeping your spouse involved. Both people need to be on the same page about the household finances to help protect each other in the case that someone gets sick or can no longer make financial decisions.

8. Keep an Eye on Family Members

While it is a good idea to get help from a trusted family member, it is also important to be somewhat wary. You might be shocked to learn that, according to a MetLife study of elder financial abuse, 34% of reported elder financial abuse is perpetrated by family, friends and neighbors.

9. Know and Track Your Finances in a Written Secure Document

You can not know what is missing if you don’t know what you have.  It is very important that you keep a written list of your accounts (not necessarily account numbers, just institutions) and approximate balances.  Let’s face it, our memories sometimes fail as we grow older and it is a good idea to have a written document to help you remember what to check and what should be there. Some people use their Boldin retirement plan to help track this information.  (No account numbers or other specific information about the accounts are necessary, but you can document and maintain the broad strokes of your finances.)

10. Be Careful About Phone Calls

If you receive an unsolicited phone call, email or letter and they ask for any account numbers, be very careful — even if they say they are with an institution you are associated with. You can always hang up and call back the company using the number found on your statements or via the company web site.

11. Work With Trusted Resources

Only use financial institutions you trust and do a thorough background check on anyone you might hire to come into your home or to work with you and your finances.  Ideally you get a referral from someone or an institution you trust.

12. Report Any Suspected Financial Fraud As Soon As Possible

If you believe that you have been a victim of fraud, there are resources for reporting it. The United States Department of Justice lists this essential contact information: Fraud can happen to anyone at any age. But seniors are targeted, and unfortunately, many fall prey to con artists. Some victims have lost thousands of dollars, and some have lost their life savings.