4 steps to avoid financial fraud in 2022


It’s easy to think of financial fraud as the kind of thing that happens to other people, not you. But even if you are a smart consumer, it is quite easy to fall victim to criminal activity. Unfortunately, financial fraud can take many forms and come with a world of unwanted consequences.

If someone steals your identity and accumulates charges on a credit card in your name, it could cause significant damage to your credit score. And if your credit score takes a hit, it could become difficult to borrow money when you need it or rent a house when your lease is up.

That is why it is worth doing all you can to avoid financial fraud in the New Year. Here are four important steps to follow.

1. Invest in a shredder

Many banks and financial institutions allow account holders to sign up for paperless statements. But even if you go this route, you might still receive documents in the mail that contain sensitive financial data. If you simply throw these documents away, a criminal could retrieve them and use them to initiate fraud.

That’s why a shredder is a really smart investment. For around $ 50, you can buy a machine that will make your sensitive documents unreadable even to the most persistent con artist.

2. Regularly check your credit report

If a criminal obtains your Social Security number, they can use it to open a credit card or line of credit in your name. But if you regularly check your credit report, you could spot this fraudulent activity and nip it in the bud sooner rather than later.

Normally, you are entitled to a free copy of your credit report once a year from each of the three reporting bureaus – Experian, Equifax, and TransUnion. In 2022, however, credit reports will be free on a weekly basis until April.

If you check your credit report early in the year and don’t see anything suspicious, you probably don’t need to review it the following week. But he is a good idea to check your credit report every three months to make sure nothing is suspicious.

3. Keep essential financial documents in a safe place

You may have some financial documents that you need to keep handy and don’t just have to shred them. But it is important to secure these documents as much as possible. Consider investing in a safe or consider renting a safe from your local bank.

Additionally, if you have old credit cards that you don’t really use but keep open to preserve your credit score, you may want to consider keeping them in a safe deposit box rather than in your wallet. This way, if your wallet is lost or stolen, criminals will potentially have one less account to access.

In this sense, do not take your social security card with you. It’s not something you need on a daily basis, but you could be in great pain if this number fell into the wrong hands.

4. Know how to spot scams by phone, email or SMS

Those annoying spam calls you sometimes get on your phone? Often these are criminals looking for information.

It is important that you do not respond to unsolicited emails, texts, or phone calls asking you to confirm your bank details or social security number. If you do, you could end up making a criminal’s life very easy – and yours very difficult.

Likewise, don’t be afraid to provide this information if you receive a call threatening to garnish your paycheck. This is a tactic that crooks will often use, but your wages cannot be garnished unless you owe back taxes from the IRS or a creditor gets a judgment against you in court (which you know).

Also, be aware that agencies like the IRS and Social Security Administration won’t call you, text you, or email you out of the blue asking you to verify your personal information. These agencies will only contact you by mail, so if you get a call asking for your bank details to process your tax refund, hang up.

Financial fraud can be a miserable thing to deal with. Take these steps to avoid being a victim in the coming year.

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