Ep 29: Stay A Step Ahead of Cyber Criminals. Protecting Your ID and Other Important Matters.
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Assume that your information is already out there. Your goal is to ensure that nobody misuses your data."
In this episode, we discuss the importance of protecting yourself from identity theft.
We provide practical steps and tips for safeguarding your personal information and financial accounts.
Key takeaways
Place fraud alerts on your credit and consider extended fraud alerts if your identity has already been stolen.
Place a credit freeze on your credit to prevent new accounts from being opened in your name.
Use a password manager to generate strong, unique passwords for each account.
Enable two-factor authentication on all your financial accounts.
Create a separate email address for your financial accounts, and be cautious of suspicious emails.
Monitor your account activities regularly and set up alerts for any unusual transactions.
Create a social security account to monitor your earnings and prevent unauthorized access.
Create an IP PIN with the IRS to prevent fraudulent tax filings using your social security number.
Take proactive steps to protect your identity before leaving the country.
The speakers' views and opinions discussed in this episode should not be considered financial, tax, or legal advice. Consult your advisor for any legal, cross-border tax, and financial advice.
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Speaker 1 (00:06):
Welcome to the International Money Cafe Podcast, the show where we filter out the noise on cross-border taxes, finances, and life in the us. I'm your host Jen, me from Certified Financial Planner, founder and owner of Elgon Financial Advisors,
Speaker 2 (00:21):
And I'm your host, man, Nadi, enrolled agent, owner and founder of Amman Tax and Business Services. Join us on this journey as we explore the unique challenges faced by inbound outbound families and businesses on taxes, compliance, and financial planning. Let's get to the show
Identity Theft and How to Protect Yourself
Speaker 1 (00:43):
And we are back with another episode of the International Money Cafe Podcast. Identity theft threatens your financial life and can absolutely ruin your life, your families, your friends. In the last couple of weeks, you've probably read about the massive data bridge that happened from National public Data where information for over 2.9 billion people was released into the dark web. The data includes data of people from the us, Canada, the uk, and a whole host of other countries, and it contains a person's full name, address, social security number, phone number, and alternate names. And so with all the recent data breaches that have happened over the last few years, the approach Manasa and I are taking is to assume that your information is already out there. Your goal is to ensure that nobody misuses your data. And so in today's episode, we are going to be talking about identity theft and how to protect yourself.
Speaker 3 (01:57):
Yes, and these are some of the steps that we are going to go over with you that Jane and I have already taken, and we definitely want to make sure that you can be protected and you take these steps and make sure that the identity theft to whatever extent will not happen to you.
Why Should You Be Concerned About Identity Theft?
But before we do that, why should you be concerned about identity theft? This is something you're wondered or if you're new to the country and you're thinking about, why is everybody talking about this? So things can go wrong when personal information gets into the hands of people who have various different ways of manipulating it. And they could take over your investment accounts, they could take over your bank accounts, your social security accounts, they could take over your insurance policies. God knows they could open new accounts in your name. This is the worst thing is they could file fraudulent tax returns with your social security number. And so if you ask around or if you read, you probably will hear of horror stories where it took victims years and years to get out of this identity theft crisis. Not to mention other impact that this can have on their lives. They could probably just put a hold on everything or most of everything that they can do until their identity is cleared and their credit is cleared.
How to Protect Yourself from Identity Theft
So we're going to go into a few things today about how to protect yourself assuming that your data is out there, right, Jane?
1. Place a Fraud Alert On Your Credit Cards
Speaker 1 (03:48):
Yes. And we'll also as we go through them, we'll include some caveats because this is something we've done and we found some interesting things as we kind of went through this that we'll be talking about. So the first thing you want to do is place fraud, all alert on all on your credit, a fraud all alert tells a potential creditor that they need to check in with you before extending credit. So anybody or company or anybody that says, you know how you get all these offers in the mail, they need to call you and check in with you. And the way to do it is you can call the credit agency or do it on each agency's website. Now these three agencies, main agencies is Experian, there's a Equifax and there's TransUnion. If you go to each one of these websites, you'll be able to place an alert on one of their site.
Speaker 1 (04:42):
And here's a nice thing, it's going to be forwarded to the other two sites, so you only need to do it on one. Now when you place this all alert, it's only good for one year, but what that means is you are also removed from pre-screened credit and insurance offers for six months. There's another kind of all alert called an extended all alert. So if you, identity has already been stolen and you can actually prove it. So you need to go to the website identity theft.gov to report. So actually show that your identity is out. You'll be able to get an extended a lot, and that can actually last for up to seven years. If you are on active duty, especially if you're outside the country, your Allah will last for two years. For most people, the annual Allah will suffice. And one of the things I want to call out is, so you've already gone out. These are very practical step. Make sure you do it today. Do the following. Two things.
Remind Yourself to Update Fraud Alerts after a Year
After you place the allot one, create a calendar reminder to come back and update it after one year, you want to make this a yearly ongoing thing. Two, as part of the service, they'll offer to give you a free credit report. You're entitled to one anyway, go ahead, download a copy and check to see if there are any issues that you can then take care of.
2. Place a Credit Freeze on your Credit
Speaker 3 (06:11):
Yeah, I totally am on the ball with the one that where you have to set up that reminder to make sure that you are renewing that alert because that's something that most of us forget, right? The next important thing that you need to do is place a credit freeze on your credit. So a credit freeze or a security freeze is the best way to help prevent new accounts from being opened in your name. So it's free to freeze unfreeze or temporarily lift a freeze on your credit. And this will not affect your credit score. And this is something that we've had to do recently where we forgot that we had put a freeze, but then we had to call and temporarily lift the freeze on our credit so that our credit history could be checked for something. So unlike the credit alert though, this credit freeze needs to be done individually on each of these credit reporting sites.
Speaker 3 (07:17):
So you have to go to each of the sites that we just said, the TransUnion, the Experian, and the Equifax site. And there is a place where you can put this freeze and you definitely need to do it and make sure that it's done correctly. Of course, you can also do the credit freeze over the phone, but we would prefer that you do this online to make sure that it is properly taken care of. We will provide you links in our newsletter to the credit agencies and you can look for that. But again, while you are placing these credit frees though, be careful not to sign up for any extra services that the credit agencies would be offering to you. And this is something you may probably want to look out for because sometimes if a credit monitoring service is, they may offer you an ID theft protection or they may offer you a different type of a service, but it might involve payment. But remember, a credit freeze is free and you should not confuse it with a credit lock. So a credit lock is different from a credit freeze, right? Jane, you want to talk about that a little bit first?
Credit Lock vs. Freeze
Speaker 1 (08:47):
Yeah, because when I did it, I noticed they tried to sell me the credit lock. So I don't need a credit lock right now. I don't need to pay for a monitoring service. Maybe in future I do, but right now I don't. So I don't need to pay for that. The other thing I noticed that you call out is when I did it on Experian, I noticed that somehow they opted me into various credit card offers, loans, and all kinds of things. And so as soon as I put my freeze on, I started getting a whole bunch of marketing emails like literally almost every day if I was to go ahead and apply for it. Not that I will, I would have to unfreeze my credit and apply for the offers, which literally face the purpose of what I have to do. So what I've had to do is go back into my account on Experian now that I did it online and unsubscribe from all kinds of marketing emails.
3. Monitor Your Credit Report
Speaker 1 (09:43):
I don't need to get anything from them. And then another thing you want to do is obviously keep monitoring your credit report and you can get free credit reports every year from the official site, annual credit report.gap. Be careful because there's some fake sites out there. You want to go to annual credit report.gap on top of that. Also put a lots and freezes for your family. If married, encourage your spouse to do the same thing, especially if you share account, you can do it for them, but it's a pain because you have to prove your relationship to them. You can do it online, you have to do it via mail. So it's better if you just sit there with them and say, okay, let's go through this same process that I just went through. If your kids are over 18, do the same thing with them.
Speaker 1 (10:39):
Go through the same process with them. If they're working and earning and they end up earning below the standard deduction threshold, there's a tendency not to file taxes. So they may not know that the information has been misused for filing fraudulently, so you really want to make sure you do it for them. If they're below 18, you should still do it on their behalf. The only thing is the agencies have to create a credit report or a credit file for them. So again, it does involve a lot of sending IDs and doing all these things via mail, but it's probably absolutely worth it. Again, assuming their data is out there, and we are going to take a quick break for a very important message, but don't go away. Come back because on the other side we'll talk about other things you can do to protect yourself online.
Speaker 2 (11:38):
Hey, dear I'm C listener. Let me tell you a little story. Coincidentally, when I started my practice, it was the same year in which FATCA was passed into law. FATCA stands for Foreign Account Compliance Act. The government started to crack down on those who had financial assets overseas and were not compliant in disclosing these funds to the US government. The FinCEN Fbar filing requirement has been around since 1970, since the Bank Secrecy Act was passed. Well, even though it has been more than 10 years since these laws were passed, we still have many, many US taxpayers who may have the filing requirement but are completely unaware of it. I'm talking about that joint account with your dad with over 10 K back home. So this is in fact our most frequently asked question. We've put together a comprehensive free ebook, which goes over the most important compliance requirements for overseas financial assets. And we want you IMC listener to have this ebook completely free. All you need to do is go to our website, www the im cafe.com, and scroll to the bottom of the homepage and enter your first name and email address and you will be able to download this handy ebook. Now, hurry, go get your free and fabulous download.
4. Opt for a Password Manager
Speaker 3 (13:25):
Hey, welcome back. So here's what we are going to talk about, a whole bunch of stuff that you can do to protect yourself online. So let's start off with one that I think already a lot of people know about this, but we want to talk about this is a password manager.
What’s a Password Manager?
So what's a password manager? A password manager is a software that saves all your passwords so you don't have to remember them when logging into different accounts. So there are few issues that a password manager will solve. One is that I think that what most people have observed, that when you come up with passwords, your passwords either tend to be very simple or it can be somehow connected back to you. So the password manager helps mitigate that. And of course, hey, I used to be guilty of this reusing the same password on many different sites.
Speaker 3 (14:27):
So of course now I've stopped doing that. But the password manager will help you do that because that's what they do. They generate random passwords for you. So no two sites will have the same password. And a good password manager will also scan your database and let you know if you have weak or reused password. So you need a super, super strong master password, which is the only thing you need to remember in order to access this password manager. A good password manager will cost you some amount of money per year. I think what Jane and I have seen is it goes anywhere from 50 to $60 every year. Most of them will work on your laptop and your phone. There are a few examples. We don't endorse these, but we're just throwing this out there for you to use if you'd like. There's Dashlane bit Warden nor Pass, et cetera, et cetera.
Speaker 3 (15:29):
There's a whole bunch of them out there. Please do your research and when you are there going through the password manager, change all your passwords and also plan to change them every quarter. I know it's a pain, believe me, I can understand my tax software company makes me do this. So you have to change it every quarter, but it's better, way better than having to deal with your information in the wrong hand. So password manager. And then the second thing that I totally believe in is the two factor authentication. And Jane will second me on this.
5. Enable Two Factor Authentication on all Accounts
You should enable a two factor authentication on all your accounts, especially your financial accounts. And basically this means that you need two forms of authentication. When you log into a system, there will be the password and then there's a one time code generated and that's sent to either an authenticated app or to as a text message to your phone number. You get a call to your phone number, but definitely please set up two-factor authentication on all your financial accounts, I think, right, Jane, do you agree?
Speaker 1 (16:49):
Yeah. And the one thing I've actually noticed with Schwab, which is where elgon financial advisors custody or clients' money, they will allow you to set up a verbal password on your account. So this extra layer ensures that you are genuinely the one logging in even if your information has been stolen. So that's sort of going over and beyond the two factor authentication. And now that I mentioned show up, let's actually talk about your specific financial accounts. What are some other things that you can do? So when the recent at and t breach happened, it exposed data including personal emails. And so one of the things we've noticed is people tend to use the same email address everywhere.
6. Create a New Email Address for Financial Accounts
So what we are recommending is know that email address is out. So you should go out and create a new email address. And this email address is to be used only for your financial accounts or your bank.
Speaker 1 (17:54):
Let's say your brokerages. Don't mix it with your everyday other emails, but in the meantime, if you receive funny looking emails or something as we say doesn't pass the smell test or just seems a little off, please, please, please don't click on them. Instead, send them to your delete folder, play it safe, be cautious and vigilant at all times. And then while you are in there, we now have a new email address. Monitor your account activities constantly. This is one that you can actually automate where you set up a lot to be notified with certain transactions or kind in your bank or brokerage account, for example, withdrawals above a certain amount or get weekly balances. And again, this will ensure that if something is off, you'll get ahead of the situation and being automated means it's less work for you. Again, while you are in there, ensure your phone number has an account pin.
7. Ensure Your Phone Number has an Account Pin
Speaker 1 (18:51):
One of the most sophisticated ID theft ideas we've had is where a thief will go out, get your number and port it out. So change your number and move it to another phone number, set up a pin with a phone company. So if anyone wants to put your number out, they cannot do so without that pin. And as part of that, one of the things I really not even talk to the kids about, if you get calls from numbers you don't recognize, please don't answer the phone. Go ahead and block them. If it's a friend or somebody genuine, they'll probably leave a message and you can always call them back.
8. Don’t Click on Random Links
Speaker 3 (19:31):
Yeah, yeah. Also, while we are talking about phones nowadays, you get a whole lot of text messages which have links in them. So I think we should also say, don't click on those various links that you get from a random person in a text message or a WhatsApp message or whichever. And I would also definitely advise our listeners to create a social security account. Definitely go to login.gov, LOGI do gov. You can create an account and when you are on your social security account, you will see all of your Social security earnings are listed, and you can make sure that in fact all of your Social security earnings are listed. And if there's anything missing, you can reach out to those employers or reach out to the Social Security administration and let them know. You can also kind of check in on what your social security estimated payments will be, depending on how close you are to retirement or to the age of the full retirement age, et cetera.
Speaker 3 (20:48):
So that's one thing. And also creating a social security account means that you can ensure that nobody else can claim your account and make sure that that's protected. So definitely that's a big one. And also if you live overseas sometimes, and this is the only way that you can log in and check if your checks have been mailed and what's going on with your social security benefit payments. So definitely create a social security account.
9. Create an IP Pin
Now, the other big thing that I tell all my clients, and I would definitely like our listeners to know is to create an IP pin. IP is an identity protection pin, which you create every year on the IRS's website. So go to the irs.gov and you can download an IP pin. This is to be done every year, and this basically puts a stop on anybody else who's trying to file taxes under your social security number because nobody can file a return on using your social security number unless they know your five digit IP pin. And this is something that people discover as after the fact because they will file a return and they'll get an error rejected. It'll say that somebody else has filed their taxes before they did.
Speaker 1 (22:26):
Quick question.
Speaker 3 (22:27):
Yeah.
Download your IP Pin Every Year
Speaker 1 (22:28):
So when you say create the IP pain, are you doing it every year or so you're getting a different pin every year, or does IRS mail to you? I'm not clear on that.
Speaker 3 (22:40):
You have to go and download this IP pen yourself every year. Now, the IRS might send you a new IP pen every year, but that is mailed to you. So that is a letter that you have to keep. There is a little bit of, we will need to go into this a little further now, if you have created an IP pin and downloaded it online, then you have to go back and do it every year and download an IP pin every year. And either if you're doing your taxes yourself, then you use that or you give it to your tax professional to use. Now, I have had instances where an IP pen has been requested from the IRS, but they do not have an account with the IRS, which we can talk about next. But because of that, the IRS then mails them a letter every year with the five digit IP pin, which I is not the most safe way, but there are people who do not have access to computers or they're not able to access computers or various different reasons why the IRS might send them this letter. And we can go into that a little more maybe on another episode, but
Speaker 1 (24:07):
Okay.
Speaker 3 (24:07):
Yeah.
Speaker 1 (24:08):
So the key thing, I think what I'm hearing you say is you have to create the account first. That's a key thing. Yeah, exactly. Okay, gotcha. Thank you for that explanation. Yeah. Okay, that's great. Okay.
10. Create an Account with the IRS
Speaker 3 (24:19):
Yeah, exactly. And yeah, so now talking about creating that account, please create an account with the IRS. So you go in, it'll ask you questions to authenticate who you are, and once you have authenticated that you go to id.me is the website. And when you go to the IRS's website, it kind of leads you down there and you will create an account and basically creating this account lets you do a lot of things with the IRS online. And you can also look at your estimated payments and you can get your account transcripts and all of that. And yes, you can also get your IP pin when you are there. There's another question that I'm asked from time to time, and this is if you have relocated overseas, can you create an IRS account with a foreign address at this time? It's hit or miss. Some people have said that they are able to create an account with a foreign address, but you may need to have a US address to create this account to be sure that it is created and it exists. So putting this out there. So yes, create that online account on the IRS website and make sure that you have the IP pin to prevent people from filing taxes using your social security number. And that is a fraudulent way of using your social security number.
Speaker 1 (26:02):
That's scary, but I'm glad we're talking about it. So I know you've been filing taxes for a long time. Have you ever seen anybody's staff get rejected because maybe somebody had already filed their taxes?
Speaker 3 (26:18):
Oh yeah. Oh no. Yeah, thankfully not as much because we put into place a lot of protocols in order to make sure that client data is protected. But it does happen from time to time, whatever reason, for other reasons, somebody's social security number might have got compromised. And that's the scariest thing to see is when you file a return and it comes back with an e-file reject code that says this primary social security number has been used already or somebody has already filed a return. So yeah, that's definitely not something you want to hear in February, March or April because you now have to do all of these things and now start to put all of the things into place. If you go to the IRS's website, there's actually, the IRSs has taken a lot of pain in putting together this steps that a person can do if their identity has been compromised, or in this case somebody else has already used it and filed a return. And you can kind of put a stop to that by taking all those steps and filling a certain form and doing that. And I've had to help out a few friends this past year who had this problem and it's very ugly.
Speaker 1 (27:45):
I can't imagine. As soon as you say that, I think my heart just, yeah, that's scary. And maybe we should actually, that particular website where if your id, your social security number has been compromised, maybe. You know what? Let's put a link on the show notes as part of that just in case somebody finds themself in this situation. Yeah,
Speaker 3 (28:06):
Sure, for sure, for sure. Yeah, I know. Anything else you can think about, Jane, if what happens to social security numbers and data when somebody leaves the country or,
Protecting your Identity when Leaving the Country
Speaker 1 (28:18):
Yeah, yeah. I'm like, oh, I got to say this. I got to say this. So thanks for the prompt. If you are leaving the country, we typically tend to work with people who are, okay, I'm about to leave the us, what are some of the things I should do? And we'll talk about your accounts and addresses and all that stuff before you leave the country. Please, please, please take some time to put all this in place. The alert, the freezes, the two factor authentication, the password manager, the I ppp, and all the things that we've talked about. Because as Manasa pointed out, sometimes it's really difficult to be able to do these things when you have a foreign address. And we actually haven't seen a way where, especially when they have to send you something where you'll be able to do this. So before you leave the country, the last thing you should do is lock down your identity. That's what it comes down to. And with that, man, is there anything else or are we good to wrap this up?
Speaker 3 (29:18):
Yeah, I think we really aligned out quite a few things that people can do to protect your identity. So if you have listened to this episode and this has sort of given you many good pointers on what you should do, please forward this episode to all of your friends and all your family and let them know what they can do and the steps they can take. Because in this day and age, this is something super, super important. So having said that, thank you for listening. And when you get a chance, please go to our new website, our brand new spanking new website, and check it out. And while you're there, sign up to be notified when new episodes drop. Stay tuned. We'll be back with more.
Speaker 4 (30:07):
Thank you for listening to the International Money Cafe podcast. The content is for informational and educational purposes only, and should not be used as a substitute for professional advice. Seek the advice of your qualified service provider with any questions you may have regarding your cross order finances and tax needs.