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10 Tips to Protect Your Online Financial Identity

Photo of author, David Nolan.
David Nolan
Senior Investment Strategist

Whether it’s risky stocks in your investment portfolio, having enough savings for retirement, long-term care needs for loved ones, unforeseen medical costs, climate change, or uncertain policies out of Washington, D.C., there are MANY things in today’s world that can keep us up at night if we are unprepared.

An even scarier thought is that, in our overly “connected” society, all our personal information that is stored on the “cloud” may be subject to theft by mysterious, unscrupulous hackers. These hackers, many of whom are from foreign countries, prey on weaknesses in personal and corporate internet security to extort money from unsuspecting victims. They sometimes hold confidential information hostage to ransom demands and give no assurances that the information will be returned even if payment is made.

Identity theft — the electronic theft of key personal information such as your Social Security Number, banking information, and PIN or credit card numbers — is another real concern. Once in possession of such information, an unauthorized party could use it to obtain credit products fraudulently, like loans or credit cards, or to assume other types of financial responsibility in your name.

In response to this problem, scores of companies have come out with their own products and services aimed at protecting customers against ID theft. Even though paying for these professional security services can be an effective measure, there are also some free and easy steps you can take to help safeguard your private financial information from online predators.

Jonas Elmerraji, a contributor to numerous business and investment publications such as Entrepreneur and TheStreet.com, offers ten tips for keeping your financial identity safe when you're online. It’s a worthwhile read. Here's a summary of his recommendations:

#1 Only Make Purchases on Trusted Sites
You could wind up a victim of identity theft when you make purchases on websites that aren't secure. Stick with trusted, well-known online retailers, or smaller sites that use reputable payment processors like PayPal or Google Checkout. Always make sure to look for the padlock icon on the bottom of your browser to verify that the page is safe.

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#2 Order Your Credit Report
Your credit report is your window into your ID security. You can get yours at AnnualCreditReport.com, a website run by the credit reporting agencies. Your credit report allows you to see whether someone has opened new accounts under your name.

#3 Know How to Spot Phishing
Elmerraji explains phishing as “a technique used by identity thieves to get your sensitive information by pretending to be a site you trust. Phishing schemes are successful because you believe that you're just signing into your bank or credit card account, when it's really a ploy to get your important information.” So essentially, if a site is asking for your social security number and address, beware! Always check the site URL to verify you’re at the correct address.

#4 Secure Your Network
If you have a wireless network at home or at work, make sure that you secure it. All wireless routers come with instructions about passcode locking and encryption.

#5 Can the Spam
Some "spam" (or junk email) can contain computer viruses if opened. Be sure to install spam-filtering software on your computer, or ask your email provider about adding spam-filtering to your account.

#6 Don't Store Sensitive Information on Non-Secure Websites
There are many apps and online tools out there to help you keep your life organized, but most are not secure websites. Avoid storing any personal information on them, like passwords and account numbers.

#7 Set Banking Alerts
Work with your financial institution to set up email and text message alerts to you if for account unusual account activity (e.g. a credit/debit card purchase over $1,000). That way you find out about unauthorized access as soon as possible.

#8 Don't Reuse Passwords
It’s a really good practice to use a different password for every account you access online. It will minimize the damage if there is unauthorized access to one of your accounts.

#9 Use Optional Security Questions
Set up optional security questions to log into your accounts. Elmerraji suggests choosing questions that don't have answers available by public record -- for example, choose "What was the color of your first car?" vs. "What city were you born in?"

#10 Don't Put Private Information on Public Computers
If you're accessing a private account on a public computer such as at a hotel business center, city library, or cyber café, make sure to log out completely from your accounts, and never choose to "save login information" (like your username or password) on these computers.

Elmerraji's tips are important for all of us to remember. While there are some parts of our lives over which we have little control, most of our online financial dealings do allow for some forms of protection if we proactively plan. Whether it’s identity theft or other parts of our financial life, we can make things a bit less scary by educating ourselves and thinking ahead!

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