Education Center

Reduce the risk of identity theft

How to Respond to a Financial Information Data Breach

In the information age, identity theft has become a growing concern for individuals. With all of our information available online, it’s easier than ever for criminals to gain access to confidential information. Understanding what a data breach is and how you can best safeguard yourself from it can help you prevent significant pain in the future.

Knowing About Financial Information Data Breaches

Financial data breaches are identified as any instance where an individual’s identity is taken for the sake of monetary gain. These instances have rapidly become the most common form of identity theft. Every year, over $50 billion is lost to data breaches with each case averaging roughly $3,500 in individual losses. Over 15 million individuals are victimized per year, and approximately 7% of households have had a member experience a data breach.

While identity theft is illegal in every state, proving you’ve been a victim of a data breach and dealing with its effects on your credit and financial future can be a laborious process. The consequences can extend well beyond a simple financial loss. Victims often suffer from damaged credit as well, and convincing the credit tracking agencies to adjust your score to reflect the crime can be a frustrating and time-intensive experience.

How Thieves Find Their Targets

Before the rise of the internet, identity theft was a narrower crime and far easier to identify. Thieves generally had to make direct physical contact with their victim’s property by stealing their wallets, digging through their trash, or taking their mail. While this form of theft is still prevalent, it’s become grossly outpaced by new online forms of identity theft. As we put more and more information online, criminals have discovered ingenious new means to exploit their victims. Modern financial data breaches can target everything from credit cards and debit cards to bank and investment account fraud to mortgage and loan fraud. Any place you have money invested can be a potential weakness for criminals to exploit, and the means by which thieves target you can seem entirely innocuous.

Many scammers pose as professionals to find the information they need from their marks. Pretexting involves thieves researching their victims to bait them into giving away more sensitive information. Armed with information like a name, address, and phone number, thieves will often present themselves as a business or government official, baiting the subject into providing them with more confidential data.

Pharming is a more complicated form of theft by which thieves with a domain name mock up a website that looks legitimate and reroutes users from the site they intended to go to. The unwitting individual then enters their information onto the site believing it to be legitimate.

How to Secure Yourself Against a Data Breach

Given the variety of methods by which thieves can target victims, completely protecting yourself against identity theft can be difficult. The most important step is to be sure that you’re cognizant of your financial information. Setting up alerts with your bank and any other financial institutions you’re involved with can help you be aware of potential data breaches as soon as they happen. Registering with a site that tracks your credit score allows you to chart red flags as soon as they appear and have a greater chance of dealing with a breach before it becomes unmanageable.

Individuals should be aware of the threats that come online and via phone. Always be sure to verify the credentials of the individual or institution in question before giving away any sensitive information. This isn’t simply limited to your financial information but should also cover your physical address and phone number. Be careful about sharing personal details on social media, as this is a common platform by which identity thieves gather information.

There are a number of online resources you can use to learn more about data breaches and identity theft. Our Identity Theft Education Center is a great place to start.

What to Do If Your Information Has Been Breached

If you’ve been victimized by financial theft, it’s essential that you respond quickly to prevent further damage to your credibility. Start by putting a fraud alert on your credit score. This will let lenders and banks know to apply extra scrutiny to your account and take more thorough measures before extending a loan. Take an inventory of what exactly has been compromised, and get in contact with all relevant institutions. This could include your credit card company, your bank, and any businesses where your money has been illegally spent.

Once you’ve secured yourself against further attacks, you should investigate forms of recourse. Contact the Federal Trade Commission to file an identity theft report, then file a police report to alert the authorities of the situation. This will further bolster the credibility of your claim with your financial institutions and increase the odds that your thief will be found and prosecuted.

We welcome comments and questions in the section below, or share this with others if you think it’s helpful.

This article is provided for general guidance and information. It is not intended as, nor should it be construed to be, legal, financial or other professional advice. Please consult with your attorney or financial advisor to discuss any legal issues or financial issues involved with credit decisions.

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