Combatting Identity Theft and Protecting Wealth From Fraud
By Nancy Anderson, Senior Financial Planner, Key Private Bank
Identity theft is one of the fastest growing crimes in the United States. Data shows that more than 15 million consumers were victims of identity fraud in 2016, representing the largest surge in identity fraud since 2003 and about $16 billion in losses, according to Javelin Strategy & Research.
Additionally, the latest statistics from the U.S. Department of Justice (DOJ) highlight that identity theft is a complex, invasive issue:
- The most common type of identity theft is the unauthorized misuse or attempted misuse of an existing account
- Two-thirds of identity theft victims report a direct financial loss
- Victims who spent more than a few months resolving the associated problems are more likely to experience problems with work and personal relationships, as well as severe emotional distress, than victims who resolved the problems relatively quickly
- The number of victims over 65 has increased the most
- More women are victimized than men
To best protect themselves from identity theft and fraud, high-net-worth (HNW) and ultra-high-net-worth (UHNW) consumers should first understand what comprises identity theft.
What is identity theft?
The DOJ defines identity theft and identity fraud as all types of crimes in which someone wrongfully obtains and uses another person’s personal data in some way that involves fraud or deception, typically for economic gain.
Consumers might see this when they get a bill on a credit card and there is a charge for a purchase in New York City at a time when they were home in Cleveland. Perhaps they’ll receive calls from a collection agency for a loan they never applied for.
The information that identity thieves typically target
- Name and address
- Birth date
- Social Security number
- Financial account numbers
- Personal identification number (PIN)
- “Credentials” for logging into online accounts, such as username, password, and answers to security questions
How identity thieves steal information
Personal information, including the items listed above, is all around, all the time. The internet is easily searchable; mail is left in mailboxes; and who has not used a credit card and then read or heard of data being stolen in a store’s security breach?
Some common methods identity thieves use to get access to your information
- Spying in public, such as looking over your shoulder at an ATM, eavesdropping on personal conversations, watching you enter phone numbers and listening to credit card numbers given over the phone
- Scanning cards given to them as servers
- Placing card scanners on public or unsecured, private ATMs
- Mining mail and paperwork that was thrown out, but not shredded or destroyed, such as pre-approved credit cards
- Email “spam” or “phishing”
- Large computer and storage data breaches
There are certainly many ways consumer information can be lost to identity thieves, putting wealth at risk, but each person can and should help to reduce this risk of loss. There are risk protection products, similar to auto, life, and home insurance, as well as personal habits that require more effort to build.
How to deal with identity theft and fraud
Victims of identity theft can take actions to start to repair the damage and limit the ongoing impacts to their wealth, emotional health, and families’ security
- To help prevent identity theft before it happens, consumers should establish safe habits and behaviors. Review the ID Theft Prevention & Wealth Protection Checklist for a list of dos and don’ts.
- Create a checklist of digital assets that you can regularly audit for your own protection and check with your property casualty insurance agent to look into identity theft prevention and protection services
- Consumers should report identity theft attacks to their local police—the financial institution will likely require it as part of their investigation.
- In the event of a data breach, consumers should also be sure to contact the company and insist on credit monitoring, at a minimum.
- To track potential identity theft and fraud, use identitytheft.gov and consumer.ftc.gov—identity theft and fraud is such a pervasive problem that there are multiple government sites addressing consumer concerns, such as the Postal Service, if mail is involved.
At Key Private Bank, security is paramount, so Key Private Bank offers clients a safe and secure personal wealth site—Key Wealth Direction®. The platform aggregates clients’ wealth information, so they can more easily keep track of information to prevent or spot identity theft. It offers clients a cloud-based “vault” where they can store important documents or information. With 256-bit Secure Socket Layer (SSL) encryption, clients have the highest level of encryption currently available, firewalls, intrusion detection and more.
With the Key Wealth Direction® platform, clients have a tool to help them manage their finances in a safe and protected environment. The platform is available on all devices and uses SSL security functions across each.
For more information, please contact your Key Private Bank advisor.