If you’ve never given much thought to the security of your personal information — both on and offline — then you may be at an elevated risk for identity theft.
Luckily, there are a number of steps you can take to protect yourself and ensure that you have a plan in place to respond quickly if you do become a victim. But before you do anything, it is important to understand some basic terms that are commonly used when discussing the issue of credit fraud and ID theft . This will put you in a better position to address it head on.
Here are eight important terms that you should know:
- Data Breach: You’ve probably heard about data breaches before, though you may not know exactly what it means. Simply put, a data breach is when someone gains unauthorized access to a company’s data, which can often include employees’ and consumer’s personal and financial information.
- Malware: Malware — short for “malicious software” — is an illicit program that steals your personal information if installed on your computer or mobile device. Malware can find its way onto your device through spam emails and even dummy versions of your most-visited websites.
- Phishing: When you go fishing, you try to trick a fish to chase after the bait on your line. When thieves go phishing, they try to trick their targets into clicking on links in fake emails or text messages. These links are designed to encourage people into sharing sensitive personal information, which can be used to commit identity theft.
- Skimming: Skimming refers to the practice of attaching an electronic device to an ATM or gas pump that will scan the magnetic strip of a credit or debit card during a purchase. Unbeknownst to the customer, this information can then be transferred to thieves offsite, who can then use it to make purchases in your name. An alternative method of skimming is to use hidden cameras to capture PINs as customers type them in.
- Credit Reporting Agency (CRA): Three CRAs keep track of credit records: Experian, Equifax and TransUnion. If you need to know something about your credit history, they will have the information you require.
- Fair Credit Reporting Act (FCRA): The FCRA is a federal law that dictates how credit reporting agencies use consumer credit information. Under the law, those who believe they have become victims of identity theft may place fraud alerts on their credit files and access copies of their credit reports.
- Fraud Alert: A fraud alert lets CRAs know that someone may be trying to steal your personal information and use it for financial gain. If you place a fraud alert on your credit reports, every effort to obtain credit going forward will be scrutinized. This makes it easier to put a stop to fraud.
- Security Freeze: A security freeze is a step beyond a fraud alert. Once this is put in place, no one — not even you — can open a new account in your name until the freeze is lifted. This is a useful tool if you are certain that someone is trying to steal your identity.
Now that you have a basic understanding of these terms, you can start thinking about how to react to ID theft. Be sure to invest in a credit monitoring service, which can notify you of certain activities that may indicate fraud. This can give you much-needed peace of mind as we navigate this new world in which data breaches and identity theft are daily occurrences.