1. Identity Theft Prepare. Protect. Prevent.
Soon we will have more older people than children and more people at extreme old age than ever before. With old age comes concerning health issues. Alzheimer’s being one of the top diseases they will face.
Financial advisers are starting to adapt to the needs of an older client base, but you have to go further and familiarize yourselves with the signs of diminished mental capacity and understand family dynamics.
Advisor’s older client base is faced with health concerns , while they are challenged with retaining assets. Wealth transfer is a significant concern for most advisors and the work of retaining assets starts well before a client dies.
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2. Identity theft is the fraudulent acquisition and use of a person’s private identifying information, usually for financial gain.
Identity theft, also known as identity fraud, is a crime in which an imposter obtains key pieces of personally identifiable information, such as Social Security or driver's license numbers, your mother’s maiden name, date of birth, account numbers, and addresses in order to impersonate someone else. The information can be used to obtain credit, merchandise and services in the name of the victim, or to provide the thief with false credentials. In addition to running up debt, in rare cases, an imposter might provide false identification to police, creating a criminal record or leaving outstanding arrest warrants for the person whose identity has been stolen.
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3. Identity theft is on the rise
2015
2016
$15.3 billion was stolen from million U.S. consumers
$16 billion was stolen from million U.S. consumers
[Read Slide]
2017 Identity Fraud Study; Javelin Strategy and Research.
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4. Identity theft is categorized in two ways
True Name
Account Takeover
The thief uses personal information to open new accounts.
The thief might open a new credit card account, establish cell phone service, open a new checking account to obtain blank checks.
The thief uses personal information to gain access to existing accounts.
Typically, the thief will change the mailing address on an account and run up a large bill. The ease of internet transactions has made this type of theft easier.
dentity theft is categorized two ways: true name and account takeover. True-name identity theft means the thief uses personal information to open new accounts. The thief might open a new credit card account, establish cellular phone service or open a new checking account in order to obtain blank checks.
Account-takeover identity theft means the imposter uses personal information to gain access to the person's existing accounts. Typically, the thief will change the mailing address on an account and run up a huge bill before the person whose identity has been stolen realizes there is a problem. The internet has made it easier for an identity thief to use the information they've stolen, because transactions can be made without any personal interaction.
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5. Types of identity theft
Tax-related identity theft
Medical identity theft
Child identity theft
Senior identity theft
Criminal identity theft
Financial identity theft
Identity cloning
There are many different examples of identity theft, such as:
Tax-related identity theft, where a thief files a false tax return with the Internal Revenue Service (IRS) using a stolen Social Security number.
Medical identity theft, where a thief steals information, including health insurance member numbers, to receive medical services. The victim's health insurance provider may get the fraudulent bills, which will be reflected in the victim's account as services they received.
Child identity theft, where a child's Social Security number is misused to apply for government benefits, open bank accounts and other services. Children's information is often sought after by criminals, as the damage may go unnoticed for a long time.
Senior identity theft, where a senior is the target of an identity thief. Seniors are often in contact with medical professionals and insurance providers, and may be used to giving out their personal information. They may also not be as aware of the scamming methods thieves use to steal their information.
Criminal Identity Theft – giving another persons personal identifying information to law enforcement in place of his/her own information.
Financial Identity Theft – using personally identifying information, such as an SSN to establish new lines of credit. They can apply for telephone service, credit cards or loans, buy merchandise or lease cars and apartments
Identity Cloning – using victim’s information to establish a new life, living and working assuming another person’s identity.
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6. Identity theft techniques
Dumpster diving
Shoulder surfing
Phishing
Spam
Trickery
Purse-snatching/Burglary
False advertising of a job opening or property rental
Electronic means/hacking
False representations
Although an identity thief might hack into a database to obtain personal information, experts say it's more likely the thief would obtain information by using old-fashioned methods. Dumpster diving, or retrieving personal paperwork and discarded mail from public trash dumpsters and the trash of businesses, is one of the easiest ways for an identity thief to get information. Recipients of preapproved credit card applications often discard them without shredding them first, leaving identity thieves free to attempt activating the cards and using them.
Another popular method to get information is shoulder surfing: The identity thief simply stands next to someone in a public venue, such the Bureau of Motor Vehicles, and observes as the person fills out personal information on a form or conveys it over the telephone.
Phishing and spam  are used as methods of tricking people into offering up their information to identity thieves masquerading as legitimate financial entities, a colleague the recipient trusts or an individual who makes monetary promises in exchange for information. The may contain attachments bearing malware designed to steal personal data or links to fraudulent websites where the person would be prompted to enter their information.
Thieves may also trick you into revealing information, or resort to purse-snatching.
It is also possible that a career opportunity or rental property is falsely advertised to gain access to personal information.
Individuals may leverage electronic means by hacking into servers containing customers’ or employees’ personal information.
Information may also be obtained through false representations -
Pretext calling, fraudulent change of address with the post office or a bank (pretext calling is a method of impersonation used to obtain biographical and account-related information)
False IRS form scams (W-8888 or W-9095 Application Form for Certificate Status/Ownership for Withholding Tax.)
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7. How stolen information is misused
Type of Identity Theft Fraud
Percent
Employment fraud
34%
Tax fraud
29.2%
Credit card fraud
32.7%
New accounts
25.6%
Other identity theft
16.0%
Phone or utilities fraud
13.1%
Bank Fraud
11.8%
Loan or lease fraud
6.8%
Government documents or benefits fraud
6.6%
dentity theft is categorized two ways: true name and account takeover. True-name identity theft means the thief uses personal information to open new accounts. The thief might open a new credit card account, establish cellular phone service or open a new checking account in order to obtain blank checks.
Account-takeover identity theft means the imposter uses personal information to gain access to the person's existing accounts. Typically, the thief will change the mailing address on an account and run up a huge bill before the person whose identity has been stolen realizes there is a problem. The internet has made it easier for an identity thief to use the information they've stolen, because transactions can be made without any personal interaction.
Federal Trade Commission; 2016.
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8. Identity theft warning signs
You notice withdrawals from your bank accounts that you did not make
You no longer receive bills, financial statements, or some other important pieces of mail containing sensitive information
You find false accounts on your credit report
You are rejected from a health plan because medical records indicate a condition you do not have
You receive an IRS notification that a duplicate tax return was filed in your name
You are notified of a data breach at a company that stores your personal information
Your credit is uncharacteristically denied
You receive calls from debt collectors for debt that is not yours
You receive notification about an account in your minor child’s name
You don’t receive a new or renewed credit card
Here are some warning signs that you may be an identity theft victim:
READ SLIDE
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9. The hidden cost of identity theft
Legal fee
Late fees, penalties, and higher interest rates
Long-term credit score
Insurance
Credit consulting services
Emotional distress
Time
Creditor “harassment”
The reality is that the identity theft recovery process is long and arduous, and you could end up losing much more money in the process than you thought. You could lose money to:
Legal Fees: Many identity theft victims will hire an attorney to help investigate and resolve your identity theft case. The estimated cost to hire an attorney can easily be at least $2,500.
Late Fees and Penalties: If your bank account was emptied out by a cyber criminal, there’s a chance that you could miss a payment on your credit card, monthly rent, and a number of other expenses. For example, if you pay your credit card bill just one day late, you could pay$25-$35 with the possibility of incurring more debt each day. Identity theft can also impact your credit long after the incident has occurred. For example, your interest rates could increase to an annual percentage rate (APR)
Insurance: Identity theft victims would want to take every precaution possible to make sure an incident never occurs again. One such precaution is purchasing identity theft protection and insurance. After people have become a victim of identity theft many spend around $25-$60 on insurance every year to protect their credit cards and accounts.
Credit consulting service: To restore any damage to your credit score had on your loans, housing, employment, and other financial situations, victims may also consider hiring a credit consulting or restoration service. Identity Theft restoration experts will spend around $5,000 to return an identity to pre-theft status and will look for all potential misuses of a person’s identity including checking government records, the black market, criminal databases, and DMV records. Victims who subscribe to identity theft restoration programs typically pay around $100 per month out of pocket for at least 12 months in order to improve their credit scores. Restoring your credit with a credit consulting service could cost you over $1,200!
It could cost you thousands of dollars to recover from identity theft, but victims also face non-monetary costs as well:
Emotional distress: Imagine the embarrassment, anxiety, and fear of telling your friends, family, or coworkers that you’ve become a victim of identity theft from a cyber attack, that you are hundreds or even thousands of dollars in debt, that you’re struggling to get a loan, or even struggling to make ends meet. Victims also reported having significant problems a work or school or having significant problems with relationships between family and friends. The emotional distress victims experience can be more damaging and long-lasting than the monetary losses.
Time: Between filing police reports, checking credit reports, calling banks, working with law enforcement, phone calls, sending and replying to s, and other time-consuming processes, it should come as no surprise that identity theft recovery takes time, and lots of it.
Harassment from Creditors: Once a victim is in debt, they could be harassed by creditors and their agents. About two percent of identity theft victims experienced credit or banking problems, and about three percent experienced problems with debt collectors.
The Hidden Costs of Identity Theft that You Didn’t Know; Nicholas; 2016.
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10. Victims of identity theft spend an average of one day to 9 months to repair the damages associated with identity theft. This translates to an average of $2,000-$15,000 of lost wages.
You have a right to a free credit report every 12 months from each of the three nationwide credit reporting companies.
Stagger your requests so that you order one report every four months.
To order, go to annualcreditreport.com or call
Cost of Identity Theft; IdentityTheftFacts
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11. Protect your personal information.
Regularly check credit reports
Pay attention to billing cycles
Destroy unsolicited credit card applications
Watch for unauthorized charges on credit card accounts
Avoid carrying Social Security cards or numbers
Do not give out personal information to an unsolicited requestor
Do not over share on social networking sites
Shred personal information before discarding
Sign up with an identity theft protection service
Limit posting personal information on websites
File taxes early
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12. You have the right to obtain a free credit report once a year.
Did you know?
You have the right to obtain a free credit report once a year.
You have a right to a free credit report every 12 months from each of the three nationwide credit reporting companies.
Stagger your requests so that you order one report every four months.
To order, go to annualcreditreport.com or call
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13. Secure your Social Security Number
Before giving your SSN, ask:
Why do you need it?
How will it be used?
How do you protect it?
You have a right to a free credit report every 12 months from each of the three nationwide credit reporting companies.
Stagger your requests so that you order one report every four months.
To order, go to annualcreditreport.com or call
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14. Protect your computer Do not respond to spam email
Use anti-virus software, anti-spyware, and a firewall
Create strong passwords
Keep your computer’s operating system, browser, and security up-to-date
Set security systems to update automatically
Encrypt data
Be wise about wi-fi
Lock your computer and any devices when not in use
Read all privacy policies
Keep records of your digital footprint
Create strong passwords that mix 10 or more letters, numbers and special characters. Don’t use the same password for more than one account.
Use anti-virus software, anti-spyware software, and a firewall on your computer. Protect against intrusions and infections that can compromise your computer files or passwords by installing security patches for your operating system and other software.
Set your computer’s operating system, web browser, and security system to update automatically.
Encrypt your data. Keep your browser secure. Use encryption software that scramble information you send over the Internet. A “lock” icon on your browser’s status bar means your information will be safe when it’s transmitted.
Be wise about wi-fi. Public wireless networks are in a coffee shop, library, hotel or other public place. Before you use a public wi-fi network, see if your information will be protected. If you use an encrypted website, it protects only the information you send to and from that site. If you use a secure wireless network, all the information you send on that network is protected.
Keep your laptop safe. Keep financial information on your laptop only when necessary. Don’t use an automatic login feature that saves your user name and password, and always log off when you’re finished. If your laptop is stolen, it’ll make it harder for the thief to get your personal information.
Read privacy policies. Yes, they’re long and complex but they tell you how the site maintains accuracy, access, security, and control of the personal information it collects, how it uses the information, and whether it provides it to third parties. If you don’t see a privacy policy, consider doing business elsewhere.
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15. Before purchasing online, check the site.
Secure pages will begin with “https” and will often display a small lock icon on the browser window.
How To Manage Your Risk
Before purchasing online, check to see if the site has a secure server to encrypt your transaction.
Secure pages will begin with “https” rather than “http” and will often display a small locked lock on the browser window (location varies amongst browsers).
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16. If your identity is stolen, act fast to limit the damage.
Step 1 Place an initial fraud alert on your credit report
Step 2 Order your credit report from each of the three credit reporting agencies
Read them carefully and correct any errors
Step 3 Create an Identity Theft Report
File a complaint with the FTC
File a police report
If Your Identity is Stolen... Flag Your Credit Reports
Call one of the nationwide credit reporting companies, and ask for a fraud alert on your credit report. The company you call must contact the other two so they can put fraud alerts on your files. An initial fraud alert is good for 90 days.
Order Your Credit Reports
Each company’s credit report about you is slightly different, so order a report from each company. When you order, you must answer some questions to prove your identity. Read your reports carefully to see if the information is correct. If you see mistakes or signs of fraud, contact the credit reporting company.
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17. Important information
Credit reporting companies
Equifax:
Experian:
TransUnion:
FTC
1-877-IDTHEFT
ftc.gov/complaint
Create strong passwords that mix 10 or more letters, numbers and special characters. Don’t use the same password for more than one account.
Use anti-virus software, anti-spyware software, and a firewall on your computer. Protect against intrusions and infections that can compromise your computer files or passwords by installing security patches for your operating system and other software.
Set your computer’s operating system, web browser, and security system to update automatically.
Encrypt your data. Keep your browser secure. Use encryption software that scramble information you send over the Internet. A “lock” icon on your browser’s status bar means your information will be safe when it’s transmitted.
Be wise about wi-fi. Public wireless networks are in a coffee shop, library, hotel or other public place. Before you use a public wi-fi network, see if your information will be protected. If you use an encrypted website, it protects only the information you send to and from that site. If you use a secure wireless network, all the information you send on that network is protected.
Keep your laptop safe. Keep financial information on your laptop only when necessary. Don’t use an automatic login feature that saves your user name and password, and always log off when you’re finished. If your laptop is stolen, it’ll make it harder for the thief to get your personal information.
Read privacy policies. Yes, they’re long and complex but they tell you how the site maintains accuracy, access, security, and control of the personal information it collects, how it uses the information, and whether it provides it to third parties. If you don’t see a privacy policy, consider doing business elsewhere.
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18. Keep track of your important papers with MainStay’s LifeFolio Checklist
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19. MainStay Investments is a registered name under which New York Life Investment Management LLC does business. MainStay Investments, an indirect subsidiary of New York Life Insurance Company, New York, NY 10010, provides investment advisory products and services. The following registered trademarks of New York Life Insurance Company are used with its permission: New York Life • MainStay Investments • Wealth Matters For Your Life
Not FDIC/NCUA Insured | Not a Deposit | May Lose Value | No Bank Guarantee | Not Insured by Any Government Agency
FOR REGISTERED REPRESENTATIVE USE ONLY. NOT TO BE USED WITH THE GENERAL PUBLIC.
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