Identity protection, security and monitoring is a hot topic these days. You can buy identity theft insurance. You can also pay for monitoring services designed to prevent a third-party from using your name and credit for their financial gain. I am skeptical of the need and benefit of a lot of this. I prefer a low cost, pro-active approach. In no particular order, these are the ID protection steps we have taken:
1. Almost all of our recurring bills are delivered electronically and paid on-line. This has dramatically reduced the amount of paper in circulation that contains information about our financial affairs. It is a lot easier to steal confidential information from paper than it is online.
2. I monitor each of our three credit reports yearly, using the free service from annualcreditreport.com. I did this last week, looking for any strange credit accounts or inquiries.
3. I receive email alerts from our primary checking account and from our single credit card account when there is any transaction in excess of $100. These are typically sent to me within minutes of the transaction occurring. If I don’t recognize the transaction immediately, I investigate. This has happened several times. In each case, my investigation has revealed that my memory isn’t as sharp as it used to be!
4. I receive daily and weekly account balance emails from our primary checking and savings accounts. If a balance looks suspiciously low, I will investigate immediately. This hasn’t happened yet.
5. I maintain all of our user names and passwords in an encrypted password vault using a free online password manager (LastPass.com). This allows me to use very strong passwords for all of our accounts because I don’t have to remember them. I only have to remember the master password for LastPass. That encrypted password would take years to crack. I back-up all of the LastPass information in a local file that is encrypted using LockNote.exe. This self-executing file is protected by another very strong password. Every account has its own password. I do not use the same password on different accounts.
6. We have an “identity restoration coverage” rider on our homeowner’s insurance policy. This is of limited value because, like most insurance of this type, it only covers up to $25,000 in costs to associated with identity “restoration.” It does not cover any consequential financial losses caused by fraud, etc. That is why the coverage costs only $30/year.
Do any of you have any suggestions for other steps I could be taking?