How to prevent identity theft

Are you doing all you can to prevent identity theft? A few simple steps can help. The term “identity theft” encompasses a variety of activities whereby a criminal uses another’s personal information to conduct fraudulent transactions.

Although the number of incidents continues to rise, thieves are getting less. According to Experian, a major credit reporting agency, the dollar amount has fallen from $47 billion in 2004 to $21 billion in 2013. Thieves are getting less because people are learning how to better prevent identity theft and detection is getting stronger. Most incidents are bogus charges to credit cards, followed by fraudulent cash transfers from a bank account.

How Identity Thieves Get Your Information

In order for you to protect yourself and prevent identity theft as best you can, you should understand how thieves get your information and make yourself less vulnerable.

So how do identity thieves get your information? Three common ways are physical theft, duping the victim, and online account access.

The number one source for obtaining personal information is still the physical taking of documents or credit/debit cards. 

How To Prevent Identity Theft Offline

The number one source for obtaining personal information is still the physical taking of documents or credit/debit cards. “Dumpster diving” – going through your trash is particularly popular. Also high on the list is mail theft, stealing documents, wallets, or devices from cars, and sadly, fraud by relatives or friends.

Some transactions occur from “skimmers”– card readers placed in slots of automated machines like gas pumps. Others result from “shoulder surfing,” where someone looks over the shoulder of one entering a PIN, then steals the ATM card and uses it to get cash.

To prevent physical theft, shred documents with sensitive information after use. Our clients are welcome to use shredders at either of our offices. Send and receive documents via secure electronic methods, like our Client Vaults, rather than traditional mail.

Avoid carrying your Social Security card with you and never leave documents, wallets, purses or devices in your car or where anyone could easily see them. When you swipe your credit or debit card in a machine, take a moment to look for a skimmer or anything odd.

In addition to physical theft, many incidents stem from people being tricked into divulging information that is then used to access various accounts. Don’t respond to any unsolicited emails or phone calls asking for personal information such as Social Security numbers or account numbers. Financial institutions already have this information and will not ask you for it. Anyone who legitimately needs your information will understand and respect your desire to verify their request independently.

How to Prevent Identity Theft Online

Online theft, such as the one which occurred at Target, gets a lot of attention but electronic systems are more secure than ever. Nonetheless, there are steps one can take to be more secure online. For any site on which you intend to conduct a transaction or give personal information, look for https:// in the address bar of your browser (the “s” is the key). When finished, always log off before closing your browser.

Keep your anti-virus/anti-malware software up to date. Be smart about what information you put on social media profiles. Check privacy settings on your devices, on apps, and on social media sites.

Encrypt your devises and your wi-fi network, and use good passwords. The most common password is some version of 123456. A password which mixes numbers, upper and lower case letters, and symbols like #@%*^ are good. For instance, p3@c0cK is better than Peacock. The longer the password, the better. Experts also advise using a different password for each important site and changing them every few months.

Unfortunately, remembering these can be a challenge. One way around this is to use a password manager. KeePass, Roboform, and LastPass are three well regarded password management programs. These will generate and store a large number of strong passwords. All you have to do is then create and remember one strong master password to use the manager program.

How To Create Strong Passwords You Can Remember

We’ll share two techniques to consider when choosing a password. One is to use a phrase, not a word, and make minor alterations to it. To turn the phrase “There’s no place like home” into a good master password, take out the spaces, strategically misspell in places, and capitalize a few letters. For instance:  “tHheirsnOpLacelIkehOaM.” Even if someone knows you use this phrase, they’d be hard pressed to guess there are no spaces, which words are misspelled, or that the second letter of each word is capitalized.

The second technique uses several short words that don’t seem to connect but mean something to you. A large man dresses as Santa every year, loves to play piano, drink beer, and often replies “can’t hold a candle to it” when describing something he likes.  Santapianobeercandle is a good password on its own. To help remember it, create an image in your mind of Santa playing a piano with a candelabra and a beer on top of the piano. Adding numbers and characters, or substituting numbers and characters for certain letters, makes it even stronger. Something like: S@^t@pi@^ob33rc@^dle. Try these techniques and test the password strength at

Identity thieves are making off with less money because fraudulent transactions are being caught more often and more quickly than before. Review your bank, credit card, and other statements. If something looks off, call the institution and ask questions. Consider paying for a credit freeze or a credit monitoring service. Security experts agree that even if you do everything right, there is always a possibility fraud can happen. But, by employing some of these practices, you can make it harder for a thief and may prevent identity theft.

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Moisand Fitzgerald Tamayo, LLC is an Orlando, Tampa and Melbourne, Florida based fee-only financial planner serving central Florida and clients across the country. Moisand Fitzgerald Tamayo, LLC specializes in providing objective financial planning, retirement planning, and investment management to help clients build, manage, grow, and protect their assets through all phases of one’s life and the many transitions in between. If you have any questions or would like to discuss anything further, please give us a call or send us a note. If you are not a client and wish to receive emails notifying you of new posts – no more than once per month – fill out the subscription information in the sidebar to the right. For more frequent updates, follow us on FacebookLinkedIn, or Twitter.  

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About Dan Moisand

Dan Moisand is a fee-only financial advisor with Moisand Fitzgerald Tamayo, LLC. He is a regular contributor for multiple outlets, including Florida Today, MarketWatch, and The Wall Street Journal. His writing and financial advice have also been featured in Financial Planning, Investment Advisor, Wealth Manager/Advising Boomers, Forbes, Smart Money, and The New York Times, among other publications. He is the only two-time winner of the Journal of Financial Planning’s “Call for Papers” competition and has been named a top financial planner and advisor by multiple publications. Investment News named Dan one of the “twenty most influential men and women” in the history of financial planning. He currently serves on the Board of Directors for the CFP (Certified Financial Planner) Board.


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