Online Fraud: Keeping Your Finances and Identity Safe on the World Wide Web

Online Fraud and Identity Theft

In today’s modern age of digital currency and intangible possession, identity theft can occur swiftly and silently, thousands of miles away from your location. Gone are the days of fending off thieves with a well-placed kick and a baseball bat, as crimes in the digital age, including online fraud, occur behind the anonymity of a computer screen and are directed at unlawfully obtaining an individual’s identity/financial information and exploiting it for economic gain.

Identity theft can have lasting consequences far beyond the initial loss of liquid funds (checking and savings accounts), as fraudsters can take out loans and lines of credit in your name, maxing limits and failing to make payments.

With each hard inquiry, 10-20 points are deducted from your score, and that coupled with a ratio increase of debt/available credit can cause your individual credit rating to plummet, taking months of effort to restore and making large purchases (home, auto) nearly impossible.

Without proper education, protection, and vigilance, the odds of any person becoming a victim of online fraud is unfortunately increasing, with an average of 15 million U.S. residents each year suffering from fraudulent identity profiteering, creating over $50 billion in total losses.

In the case of identity theft, prevention is the best offense as adopting online (and especially e-commerce) safety habits can ensure that you able to browse and shop worry-free.

Staying Safe Online

While these basic skills are neither time consuming nor require an extensive tech background, they are crucial to the safety of your financial health and the integrity of your identity.

  • 2-Factor Authentication (2FA) – An extra layer of security beyond the standard username/password portals for many online banking, credit card login, and e-commerce websites (Amazon, eBay, etc.) which prevents easy access for criminals. This “multi factor” authentication included a piece of information that the user (and ONLY the user!) would know/have on their person.
  • Changing all passwords on a regular basis. This is particularly useful in the event of a widespread data breach.
  • Use anti-virus software and a personal firewall, while checking their status regularly.
  • Use caution when downloading software and clicking on links from unknown sources/email addresses. Criminals often set up fake sites that look identical to secure sites (mirrors of banking websites, credit card sites, etc.) or send emails meant to harvest personal information. This attempt at obtaining such private and sensitive information is known as phishing.
  • Double check the presence of the security lock located to the left of a website’s address in the URL bar. Double click on the lock to display the website’s security certificate, and make sure that the name on the certificate and the website’s address match – if they do not, navigate away from the site and do not enter any personal information.

How Do You know if Your Identity Has Been Stolen?

While the above mentioned safety tips greatly lessen your susceptibility for online fraud, nothing is foolproof if you control your finances even partly from behind a computer screen. In the unlikely but still possible event that your information is stolen and your identity is compromised, it is best to know of the breach before being denied a line of credit, loan, or major purchase. To closely monitor your financial health, it is imperative that you are proactive in protecting your credit score by frequenting the numerous sites that offer both credit scores and reporting, keeping a close on any unusual activity/changes.

For almost all credit card companies and banks with online access, you can set up transaction alerts with unique purchase and balance thresholds. If your total account balance falls below a certain number or if an expensive purchase is made, the financial institution will contact you for secondary approval.

With the convenience offered by online shopping and banking, it is unrealistic to assume that even the prevalent risk of online fraud will turn consumers away completely. By staying informed, cautious, and alert you can protect your identity and your financial health while still enjoying the accessibility offered by the world wide web.