Protecting Your Savings from Identity Thieves

29 February 2016

For many Canadians, a list of their most valuable assets would include retirement savings. However, when protecting their identity, many focus their efforts on insulating themselves from credit fraud, ignoring the security of their more long-term accounts.

One reason priorities so often stack up this way is the threat ID thieves can pose to a person’s credit health and borrowing ability by running up debt or opening new lines of credit in the victim’s name. These actions can cripple a person’s financial independence in the short term, so protecting against these actions is often in a person’s immediate best interest. However, with a similar set of information fraudsters use to impact their victims’ credit, they could also go after their savings accounts.

Taking proactive steps to secure your savings accounts is not only crucial because of the sheer importance or even total of their funds, but because they are typically far less visible than your checking account or credit file. As a result, once an ID thief gets access to your savings account he or she may be able to levy significant damage over a longer period of time before any fraudulent activity is detected.

By employing the proper precautions and smart habits, you can rest assured that your savings accounts are well-protected from identity theft and that even if your accounts are breached, you will be prepared to freeze the fraudsters out of your accounts and recoup your losses. Here’s how you can get started:

  • Get to know your fraud protection policies: Whether you keep your retirement savings in a bank account or with a financial institution that specializes in retirement investing, you will typically be covered by its in-house fraud protection policies. However, your level of protection can be dependent on your ability to first protect your account up to the standards outlined in the policy. Familiarize yourself with these policies by reading through them or speaking with a representative from the institution itself. Be sure to take note of the fine print!
  • Watch your accounts: With savings accounts, it can be easy to set up a direct deposit or automatic transfer function when you first set up your account and then never check it again. Make it a habit to review your account a few times a month, if at the very least to make sure your money is still there in the amount you’re expecting. That way, if there is a problem where someone does have unauthorized access to your account, you’ll be able to catch it right away.
  • Create strong login credentials: As with any account that contains sensitive personal information, it’s critical your login credentials are strong. Not only should you choose a unique password, but your security questions must be equally difficult to guess. Remember, the answers to questions like “What is your mother’s maiden name?” or “What was your high school mascot?” might be easy to find with a quick internet search or review of your social media profile. Don’t let your security question compromise a strong password!
  • Don’t share your login information: Once you’ve come up with a complex password and answers to security questions only you can answer, make sure never to share them with anyone, even your financial advisor. If you give your credentials to anyone who then processes a transaction without your knowledge, it may still be considered authorized access and therefore not covered by the institution’s fraud protection policy.
  • Spread out your funds: If you’re using several different programs to save for retirement, consider keeping them in separate accounts with different financial institutions. That way if one is compromised, the others may still be secure.

While these strategies can go a long way toward protecting your savings accounts from the effects of identity theft, it is impossible to stop the crime altogether. Working with a credit monitoring company, however, can help you maintain your peace of mind, by keeping an eye on your accounts and notifying you when it identifies certain activity that may indicate fraud. To learn more, contact Identity Guard today!