How to Protect Your Financial Identity

How to Protect Your Financial IdentityAccording to the Veda Australian Debt Study of March 2012, around one in five Australians have encountered some type of identity theft. Identify theft can be costly for the victim and time consuming to deal with. Learning to protect your financial identify to reduce the risk of identity theft happening to you.

Types of identity theft and fraud

Identity theft or fraud occurs if a third party uses your personal information to participate in fraud. They can use this information to make purchases, apply for loans, or commit some other type of financial fraud. One common type of fraud is when a third party uses your credit card to make unauthorised purchases. Another is when they steal your personal information to apply for a loan.

Check your statements

Check your credit card, bank and debit card statements carefully. Look out for any unauthorised transactions. Contact your financial institution immediately if you see any unauthorised entries.

Use identity protection services

Some credit reporting agencies now offer paid identity protection services. These are usually subscription based. These types of products include credit reports, alerts and ongoing monitoring of your credit profile.

Practice safety online

Be vigilant about protecting your personal and financial information online. Whether you’re banking or shopping online, take all necessary measures to safeguard your private information. First, make a habit of changing your passwords regularly. Change your passwords at least once a month.

Second, clear your browser data and make sure you log out after each session. This reduces the risk of someone else accessing your session to make an unauthorised transaction.

Third, check the protective tools offered by your financial institution. For example, your bank might offer more protection for online fraud on your credit card than for a debit card. If so, shop with your credit card rather than your debit card.

Fourth, be aware of common scams such as phishing emails. Avoid clicking on links in unexpected emails, even those that appear to be authentic. Always check the authenticity of websites before you type in your personal information.

Safely dispose of sensitive documents

If you have paper statements, shred these before recycling them or disposing of them in the trash. Shred any other documents that contain your personal details, such as utilities bills and mobile phone bills. Identity thieves have been known to steal recycling material or rubbish to obtain personal information.

Fraud alerts and credit freezes

Some credit reporting agencies and financial institutions offer fraud alerts and credit freezes. Fraud alerts remind lenders to review any credit applications that are made in your name.

Credit freezes stops organisations from accessing your credit file unless you already conduct business with the organisation. You can ask your bank or a credit agency about these types of services if you need you could benefit from having them.