There are two main types of financial identity theft:  new account fraud and account take over.

New account fraud is when someone gets your social security number and starts opening new lines of credit in your name, credit cards, even car loans.  You start getting calls from collection agencies wanting their money.

Account takeover is the most common form of ID theft.  This is when someone hacks your bank account or gets your credit card number.

New account fraud is easier to prevent.  Making sure your devices are protected from spyware and being careful where you give out personal information will go a long way in preventing it.

Account takeover is harder to avoid.  Every time you hand over your credit card to pay for something, it can be stolen.  The best thing to do is to monitor your bank and credit card statements for unauthorized transactions.

There are new technologies coming that can help prevent ID theft.  Chip and pin are long overdue in the States.  It’s been standard in Europe for years.  We will get it in October 2015.  The magnetic strips will be replaced by the chip and pin which are harder to hack because the chipped data is encrypted.

NFC technology is in the offing too.  This is tap and pay or wave and pay technology.  Apple Pay uses NFC.

The best way to stay safe is to use multiple layers of protection.  Use Mint, check your statements, some banks and credit card companies allow you to set your alerts to be notified of every transaction.  Amex is the gold standard for this.

You have sixty days to refute a charge on a credit card.  You have two days to refute a fraudulent debit card charge.  This is why we advocate always using a credit card rather than a debit card.

If you use Cloud storage, Robert recommends mulit-factor authentication. Otherwise, all your naked pics will end up on Reddit, The Fappening II.  Are you willing to risk it?

Don’t use one password for more than one account.  I know this is a pain in the ass but sorting out ID theft is worse.  At least don’t do it for anything connected to your finances.

Get a credit freeze.  It locks down your credit report. In order to “thaw” your report, for legitimate applications for credit and loans you’ll receive a one time PIN.

I’ve had both my checking account and a credit card hacked and it is annoying to have to sort out so get your security measures in place now.

Show Notes

ID Theft Security:  Robert’s site that will teach you how to safeguard your private details.

Mint:  Alerts you to unusual activity on your account.

Best ID Theft Companys:  ID protection companies ranked.

LMM Financial Rant Hotline:  Call 856-818-3738 and rant about anything finance related.