How would you like to go home tonight and find that your pocket is $2,700 lighter – and it will take at least 30 hours of your time to resolve it? That is the average amount Americans lose to identity theft, and some people lose as much as $1 million, said Todd Feinman, CEO of security and privacy technologies firm Identity Finder.
A November 2007 Federal Trade Commission (FTC) report said that in 2005, 8.3 million Americans discovered they had been victims of identity theft. Tax season in particular is a time when guarding against identity theft becomes even more crucial. “Identity thieves aren’t going from Dumpster to Dumpster stealing one tax return at a time anymore,” Feinman said. “Hackers are now writing programs that can go out and steal this type of information from thousands of computers at a time.”
With increasing numbers of taxpayers using e-filing to take care of their duty to the IRS, there are a number of precautions that it is recommended they employ to ensure the sensitive information being transmitted and stored during tax season doesn’t fall into an identity thief’s hands.
The most important advice e-filers need to hear, said Feinman, is, “After you file your tax return online, there’s still a copy of it on your computer, and you should either password protect [it] or permanently ‘shred’ it from your computer,” which involves a process that ensures that recovery of the information is no longer possible. The password you choose should not be a word that is found in the dictionary, it should contain numbers and use mixed case, he said.
Identity Finder offers software to help taxpayers in these tasks. This software searches your computer — including hidden file systems and e-mails — and locates files that contain vulnerable personal information, including your Social Security number, credit card numbers and passwords.
“The purpose of Identity Finder is to help people weed out all of these places that their information is now being stored and make them knowledgeable that it exists,” said Feinman. Identity Finder then helps you shred the information or encrypt it, so it can be accessed in the future. This will keep your documents safe in the case of your computer being lost, stolen or hacked.
Another threat to your information may intersect with your love for music and movies: peer-to-peer networks. “Make sure your peer-to-peer file sharing programs don’t share your documents,” Feinman said.
“Many people don’t realize they could inadvertently open their entire computer up for people to download their forms,” including old tax documents. And the information contained in the forms would give someone enough information to open up a mortgage in your name.
Finally, beware of phishing e-mails claiming to be the IRS. These are prevalent right now, and often claim to be contacting you regarding a refund and will ask you to click on a link to a fake refund form and enter personal information. However, the IRS has stated on its Web site that it will “not send unsolicited e-mail about tax account matters to individual, business, tax-exempt or other taxpayers.”
Remaining vigilant in the ways described above will keep you safer from identity thieves, but if you feel your sensitive information has been compromised, there are a couple steps you can take immediately. First, obtain a copy of your credit report. If you find suspicious activity, contact your local law enforcement or the FTC. In the case of unauthorized charges to your credit or bank accounts, contact the institutions to dispute the charges. Then prepare yourself the time-consuming process of getting your money back.