Digital Security 101: Protect Yourself

Data breaches and digital theft have become a harsh reality in today’s world. In 2005, the United States experienced 157 data breaches. This number grew to over 3,200 in 2023, highlighting the growing threat to personal and financial information.¹ Every piece of data stolen, from Social Security numbers to email addresses, poses a significant risk, potentially leading to identity theft, financial loss, and emotional distress. With data breaches becoming increasingly common, it’s crucial to know how to protect yourself and mitigate the potential damage.

Secure Your Credit

1. Credit Alert
   A credit alert is an excellent first step in safeguarding your identity. By placing an alert on your credit file, you will be notified whenever a new account is opened in your name or a credit inquiry is made. A credit alert doesn’t stop new accounts from being opened, but it does prompt creditors to take additional steps to verify your identity. Essentially, it acts as an early warning system, giving you the chance to take swift action if something seems amiss. Most credit bureaus offer this service for free, making it a no-brainer for anyone concerned about identity theft.
2. Credit Lock
   A credit lock provides a more robust level of protection. Unlike a credit alert, locking your credit prevents lenders from accessing your credit report altogether, effectively stopping any new credit accounts from being opened in your name. The process of locking and unlocking your credit is quick and can often be done through a mobile app provided by credit bureaus, offering you both security and convenience. However, it’s worth noting that a credit lock is only effective with the bureau you’ve locked; you’ll need to do this with all three major credit bureaus—Experian, Equifax, and TransUnion—for comprehensive coverage.
3. Credit Freeze
   The most stringent option is a credit freeze, which offers the highest level of protection by completely restricting access to your credit report without your explicit permission. A credit freeze is free by law, and it remains in effect until you manually lift it. While this measure is highly effective at preventing identity theft, it can also be a hassle when you need to apply for new credit yourself. You must unfreeze your credit each time, which can take a few days depending on the bureau. For those who have already experienced a breach or are at high risk, the peace of mind a credit freeze provides is often worth the inconvenience.
4. Consider Freezing Children’s Credit
   Children’s Social Security numbers are attractive targets for identity thieves because they can be used to establish a clean slate for fraudulent activity. These types of breaches often go undetected for years—sometimes discovered only when the child is old enough to apply for credit themselves. Consider freezing your children’s credit with all three major credit bureaus to protect their financial future. This process is straightforward and can be invaluable in preventing long-term damage to their credit profiles.

Secure Your Electronics

1. Antivirus Software
   Choose a reliable antivirus software that provides real-time protection and regular updates. Popular options like Norton, Bitdefender, or McAfee offer comprehensive tools that help detect and neutralize potential threats before they can cause harm. Keep your antivirus software up to date to defend against the latest threats.
2. Enable Automatic Updates
   Software vulnerabilities are one of the most common entry points for malware. Regularly updating your operating system, browsers, and other meaningful software can reduce another variable involved in data protection.
3. Virtual Private Network (VPN)
   A VPN is a great tool for general online privacy, particularly crucial when connected to public Wi-Fi at cafes, airports, or hotels. A VPN will encrypt your internet connection and hide your IP address, making it harder for hackers to steal information or track your online activity.
4. Password Manager
   A password manager is another vital tool in your security arsenal. This software not only helps you generate strong, unique passwords for each account but also stores them securely. Beyond just organizing passwords, a password manager encourages best practices:

a. Password Organization: Keeping your passwords in one secure place reduces the likelihood of forgetting them or storing them insecurely.

b. Password Strength: Many password managers suggest or generate strong passwords that are difficult for hackers to crack.

c. Dual Authentication: A good password manager will support or even require two-factor authentication (2FA) for additional security. Addressing the elephant in the room, one might ask, “What if my password manager falls victim to a data breach?” This is where an account-level two-factor authentication becomes key. If your passwords were to ever become breached, account-level dual authentication would require either a numerical code or acceptance via a personal device to proceed. Above all, be sure that you implement this additional protection with any financial institutions or accounts where your payment information has been stored.

 Additional Steps to Further Increase Security

1. IRS Identity Protection PIN (IP PIN)
   With tax-related identity theft on the rise, another critical step is to place a fraud alert with the IRS. Thieves who have access to your Social Security number could potentially file a tax return in your name and claim a fraudulent refund. The IRS Identity Protection PIN (IP PIN) program allows you to secure your tax filings with a unique code that must be used when submitting your returns. This step is particularly important if your sensitive information has been compromised in a breach.
2. Choose Credit Cards Over Debit Cards (With Care)
   While it might seem counterintuitive, using credit cards instead of debit cards can offer an extra layer of protection against fraud. Credit cards often come with better fraud protection policies than debit cards, including zero liability for unauthorized transactions and quicker resolution of disputes. Debit cards, on the other hand, are directly linked to your bank account, meaning any fraudulent charges can immediately affect your available funds. Of course, the key is to use credit cards responsibly by paying off balances in full each month to avoid interest charges. Leveraging credit wisely allows you to benefit from added security without the downside of accumulating debt.
3. Review Your Insurance Coverage
   Considering the growing prevalence of data breaches, it’s also essential to review your insurance policies—especially any that cover identity theft or data breaches. Some homeowners’ or renters’ insurance policies include provisions for identity theft coverage, which may help offset the costs of legal fees, lost wages, or other expenses incurred while restoring your identity. Additionally, consider specialized insurance for cybersecurity or identity theft, particularly if you handle sensitive information for your business or have substantial assets to protect. The peace of mind that comes from knowing you are covered in the event of a breach is well worth the potential cost.
4. Premium Identity Protection Services
   If you’re looking for more comprehensive protection, consider premium identity protection services. These services offer a variety of features, including dark web monitoring, credit monitoring across all three bureaus, and insurance for identity theft. Some employers even provide identity theft protection as an employee benefit, which could make it more accessible and affordable. These services provide an extra layer of security and professional help should you fall victim to a breach.

Summary

The reality of living in a digital world is that data breaches are not a matter of “if,” but “when.” By proactively taking steps to secure your information, you can dramatically reduce your risk and gain peace of mind. Remember, the cost of being proactive is always less than the cost of being reactive when it comes to protecting your identity and financial health. Don’t wait for a breach to hit close to home.

1 – https://www.statista.com/statistics/273550/data-breaches-recorded-in-the-united-states-by-number-of-breaches-and-records-exposed/

The opinion of the author is subject to change without notice and must be considered in conjunction with relevant regulation, as well as subsequent changes in the marketplace. Any information from outside resources has been deemed to be reliable but has not necessarily been verified. Each individual has unique circumstances to which this information may or may not be relevant. Under no circumstances will this information constitute an offer to buy or sell and it does not indicate strategy suitability for any particular investor. Past performance is not indicative of future results.