An identity is stolen every two seconds in this country.
Yeap, you read that right. Every TWO seconds. Yeah… that’s a lot. That means that either you or people you know in Chattanooga have fallen victim to identity theft.
It’s the #1 type of complaint received by the Federal Trade Commission (FTC), and state Attorneys General are also flooded with such issues. It’s so prevalent in fact that trying to stop it is like putting duct tape over a break in the dam and expecting it to keep the water from bursting through.
So, what can YOU and other identity theft victims in Hamilton County do about it? Well, there’s an entire industry promising you a solution to this problem, promising identity theft protection plans that will keep you from suffering financial setbacks resulting from identity theft.
We have more on this, but first, an update from the IRS …
Let’s talk about something good coming out of the dumpster fire of last year: refunds on unemployment compensation. Thanks to ARPA, if you or others in Chattanooga in the same situation last year received said compensation, the first 10,200 of those unemployment benefits are being retroactively made tax-free, regardless of whether we filed an amended return for you.
What’s that mean for you? It means the IRS is automatically issuing refunds to many people, and those refunds will start going out very soon.
More good news… this adjustment also impacts eligibility for several other tax credits, such as the Earned Income Tax Credit and the Premium Tax Credit for health insurance. The IRS is able to automatically make adjustments for simple tax returns, but if you have a more complex tax return, we may need to file an amended return for you in order to capture this new benefit.
Give us a call to see what you’ll need to do (if anything): (423) 870-2440
With that said, let’s have “fun” talking about identity theft protection plans…
Do Identity Theft Protection Plans Work? John and Wanda King’s Tips for Chattanooga Friends
“Most people have the will to win, few have the will to prepare to win.” – Bobby Knight
Virtually every day the news carries yet another story about a data breach from some company that holds your personal information. (Remember the Equifax breach of 2017 where over 143 million people’s personal data was put at risk?)
In this digital era, you end up sharing more personal information with strangers and companies than your parents ever did.
Passwords, account numbers, Social Security numbers, dates of birth, the name of your first pet, employment history, ring size of your left big toe… It’s all being passed into our cellular telephones, tablets, computers, and other gadgets all day, every day. Thus, it’s easier than ever for that information to get stolen.
In the wake of that, a completely new industry has grown up in the last two decades — one that promises to protect you and your information from identity theft. With a variety of solutions, products, and price points, it’s easy to get lost in the minutia of what identity theft protection plans are right for you, and if you even need one.
What Kind of Identity Theft Protection Plans Do Companies Actually Offer?
As a general rule, ID theft protection companies have three basic product levels with increasing levels of theoretical protection to offer Hamilton County residents. While each company might call this something unique, they all boil down to these core offerings:
Monitoring: Essentially, this level is simply doing the work you should be doing anyway, such as regularly reviewing your credit reports, looking for discrepancies and new accounts opened in your name that should not be linked to you. Some monitoring services can even be free, such as those offered by credit card companies and identity protection businesses as a way to acquaint you with their services.
Alerts: While many banks now offer some version of this for free to account holders (we’ve all gotten that call from our bank informing us that someone in London was attempting to buy a pair of shoes), identity theft protection companies also have the ability to send instant alerts or simply monthly documentation of any activity on your account — or all your accounts via an aggregation service. Again, these services are often free with certain credit card companies, banks, and credit bureaus. For example, Experian offers a free monitoring and alert service as part of enticing you to sign up for paid plans.
Recovery: This is where the real work begins. Once your ID has been stolen and you’ve had some sort of issue, it can often feel impossible to get your life back. Recovery represents the hardest part of identity theft, because of the seemingly endless amount of work and documentation involved. Fortunately, the companies that offer these services – generally only available to users who had contracted with them before the breach — can do the grunt work for you. To a lesser extent, these types of companies also make the services available – at a far higher price point – to folks who come to them after the fact.
Can’t You Just Do It Yourself?
Absolutely! What identity theft protection companies are really selling is convenience, just like Starbucks. Sure, you could make that latte, but it’s far easier to have your favorite Chattanooga barista whip it up, right?
To handle monitoring on your own, you really just need the discipline to actually do it (like hitting the gym on the regular). For example, you should monitor your credit reports at least once a quarter and any bank, credit card, or investment accounts at least weekly. Be on the lookout for unexpected transfers and charges you don’t recognize.
In addition, it’s a good idea to use a password manager on your electronic devices. Products like 1Password, LastPass, Dashlane, and Keepass will help make sure that you have unique passwords for all sites. These tools will also help you create complex passwords that are almost impossible to crack. At the same you’re replacing weak passwords with stronger ones, make sure you enable two-factor authentication (2FA) for all financial accounts. There are different types of 2FA, so take the time to read about what options are available from your financial institution.
With each Hamilton County financial institution you do business with, be sure to sign up for any account alert options they offer. For example, most brokerage accounts have an option to send you an email and a text message whenever money is about to be transferred out of your account. You definitely want that turned on. Same goes with your credit cards. Set alerts for even small transaction amounts, as fraudsters often test a stolen credit card with tiny dollar amounts to see if the card still works.
Lastly, you have the ability to freeze your credit files at the big three credit bureaus (Experian, Equifax, and TransUnion). When you do this, hackers and thieves simply can’t “get” to your available credit because new accounts can’t be opened.
Suspected cases of identity theft can be reported to the federal government at IdentityTheft.gov, and any worries about individual accounts or credit worries can be communicated to the entity by you. Even though they probably can’t do much about it, be sure to also report such cases to the Chattanooga police department, as having a police report is often a requirement for recovering any losses.
Vigilance is the Key
Unfortunately, all the monitoring in the world isn’t enough to prevent all ID theft. If your identity is stolen, monitoring and alerts won’t tell you your information has been used to claim Social Security or Medicare benefits, a refund on your taxes, or unemployment benefits. Over the past year, these types of crimes have skyrocketed.
If you suddenly receive mail that you weren’t expecting from one of these government agencies, you’ve got to ask why and look into it. Also, if you have an online account with such an agency (like a mySSA account with Social Security), be sure to login into it a few times a year to make sure it hasn’t been hijacked and that everything is as it should be.
What about the IRS?
Tax-related ID theft is a unique problem unto itself. We can help you with monitoring your IRS accounts if you’d like. Ask us about our account monitoring service, and we can get a Form 8821 on file that allows us to do this for you.
Starting this year, the IRS has also opened up the IP PIN program to all people for the first time. Previously, this was only available in certain states or to confirmed victims of ID theft. An IP PIN can help prevent a criminal from filing a fake tax return using your Social Security number. To get one, you’ll need to go through an identity verification process with the IRS on their website.
While going to such great lengths to protect ourselves from shysters and hackers just plain sucks, it’s the reality we live in.
To getting things done,
John and Wanda King