Protecting against financial ID theft
March 14, 2013 by Liz Skinner
News that hackers have stolen — and published — sensitive financial details of high profile individuals such as first lady Michelle Obama, Vice President Joe Biden and rapper Jay-Z serves as a good reminder that no one is 100% protected from having their identity stolen and credit wrecked.
But financial advisers should be helping clients have some peace of mind.
Advisers concerned with thier clients’ financial well-being should be guiding clients to be proactive in defending against identity fraud. In addition to regular credit report checks, one step that advisers can do is recommend clients purchase protection from services like Lifelock or IdentityGuard.
Lifelock, for instance, will send subscribers an alert as soon as someone has used their financial or personal information to apply for credit from retailers, seek a car or payday loan or even subscribe to a cell phone. It also lets subscribers know if someone has tried to change their address or sell their private financial information to others online.
For about $110 a year for basic service, Lifelock also can make the distressing circumstance of losing a wallet easier. It helps to cancel and replace credit cards, drivers’ liscenses and Social Security cards, among others.
Actify Inc. chief marketing officer Sam Richter told advisers attending the Financial Planning Association’s Business Solutions conference in Chicago last week that even though these services don’t work perfectly, advisers should have their clients get protection for themselves and for their children.
“When’s the last time you got your 14-year-old’s credit report?” he asked.
In fact, child identity theft is all the rage because criminals have realized it takes longer to detect cases when they have used the private information of, say, a three-year-old to open accounts and go on a spending spree. Some officials say it’s close to a year before most of these cases are identified.
Clients should be extra wary of giving out Social Security numbers of their children on health, school and other forms — and even ask if they can use a substitute number, experts said.
Shredding financial and health documents is also important.
And Mr. Richter recommended advisers help their clients monitor the privacy controls on their social media sites, including Facebook Inc. These settings must be checked regularly because firms are constantly making changes, he said.
A criminal who successfully hacks into a Twitter account could then seek more valuable financial account information using similar passwords.
Last month, “60 Minutes” highlighted a government study that says about 40 million Americans may have credit report errors. In the story, correspondent Steve Kroft effectively showed how time-consuming and expensive it can be for consumers to fix such errors.
Think how grateful a client will be to their adviser if they never has to find this out for themselves.
