Protecting Your Finances Through Credit Monitoring
24 April 2016
If you want to keep your bike from getting stolen, it’s no secret you should make sure it’s locked up when you’re not riding it. To keep your laptop out of a thief’s hands? Never leave it unattended when you get up to grab a cup of coffee. When it comes to protecting our physical possessions, we usually know where to start. But what if I asked you how to protect your finances from fraudsters? Far fewer people are prepared to answer that question, despite it being far more important.
Covering Their Tracks
Unlike physical theft, credit fraud often leaves no obvious trace. While it’s true a thief could attempt to dip into your bank account using information from a stolen pay stub or debit card, there are countless other ways cybercriminals can gain access to your accounts without ever laying a finger on your property. Whether they’re hacking into your online banking profile or e-commerce account with a malware attack or gaining direct access to your computer’s hard drive over public Wi-Fi, fraudsters are well-versed in using technology to cover their tracks.
This is especially glaring in cases of identity theft. When ID thieves use stolen data to apply for entirely new lines of credit, they usually already have enough information to make sure their victims aren’t notified. When creating a borrowing profile, ID thieves can simply insert their own contact information rather then their victims’. If the creditor requires the contact information to match what’s on existing accounts, a simple survey of their victims’ social media profiles will give ID thieves the data they need. Once the account is created, they can simply change the contact information again. Then, even if the creditor sends emails following up after a new line of credit is opened or letting account holders know about late payments, the warnings would never reach their intended audience.
In order to combat an invisible crime like credit fraud, consumers need a way to see in the dark. Although they might not be able to detect evidence of a malware attack in time to block an ID thief from accessing their data, consumers can take steps to spot the effects of financial fraud, giving themselves a chance to halt the fraudster in his or her tracks and redeem lost funds.
The easiest way to do this is to keep a vigilant eye on your financial statements. Whether you receive your bank and credit statements in the mail or digitally, take the time to go through them item by item every month. It might take a few minutes to complete, but could prove the difference between spotting a fraudulent charge and letting it go unnoticed.
Likewise, you should make sure to take advantage of your free annual credit reports. Because every Canadian has two credit reports (one with Equifax, one with TransUnion), you can either choose to monitor your credit at the same time once every 12 months, or check in one at a time semiannually. Whichever frequency you choose, take care to look for unexpected activity, such as late payments, unusually high credit balances or unfamiliar lines of credit.
Upping the Ante
To keep an eye trained on your accounts even when you can’t, consider signing up for a credit monitoring service. Credit monitoring companies can serve as the eyes in the back of your head, monitoring information on your credit files in search of certain activity that may indicate fraud, and notifying you so that you can take the necessary steps to limit the damage.