Apple Growth Partners

Protecting Your Financial Identity

By Mark Lapikas, CPA | Principal, Tax

With a previous break of Equifax, an estimated 143 million Americans’ information was compromised. In 2015, Anthem was breached compromising personal data of roughly 80 million Americans. Criminals are constantly seeking new ways to obtain your data which begs the question, “How do I protect my personal information?”

Ways to Protect your Financial Identity

One of the most effective ways to protect your financial identity is to place a credit freeze with the three major credit bureaus. In order to place a credit freeze, you should contact the following companies:

  • Equifax = 1-800-349-9960
  • Experian = 1-888-397-3742
  • TransUnion = 1-888-909-8872

The automated credit freeze systems will require that you supply you name, address, date of birth, and Social Security number. The fee to place a credit freeze ranges from $5 to $10 depending on where you live. 

How a Credit Freeze Adds Protection

A credit freeze restricts access to your credit report, which makes it more difficult for identity thieves to open new accounts in your name. The reason being, is that most creditors want to see your credit report before they approve a new account. If a creditor is denied access to your credit report, it is unlikely they would extend credit. 

If you need access to your credit report, you can temporarily lift the credit freeze for a specified period of time. Once the time period has expired, the credit freeze will go back into effect. In order to temporarily lift your credit freeze, you’ll need the unique PIN issued to you at the time you placed the credit freeze. 

With the Equifax breach, you can still place a credit freeze which will limit access to your credit report which should protect you from new credit being issued in your name. However, personal data such as your Social Security number, date of birth, and other information may have been accessed which could cause a tax refund or Social Security problem. 

Tax Refund Fraud

With your Social Security number, criminals can steal your tax refund by filing a fraudulent tax return with bogus income and deductions prior to you filing. You are not liable for the fraud, but it can take months to resolve.

If you are the victim of tax identity theft, you should complete and file IRS Form 14039 – “Identity Theft Affidavit.” Filing the Identity Theft Affidavit will notify the IRS of the theft and start the process to investigate and resolve. Once the identity theft is resolved, you will be issued a unique Identity Protection PIN which you can use for future tax filings. 

Unfortunately, you can only get an Identity Theft PIN if a fraudulent tax return was previously filed using your Social Security number and the IRS determines that you were a victim of identity theft. If you live in a high identity theft area, such as Washington D.C., Florida, or Georgia, you may be able to preemptively apply for an IRS Identity Theft PIN.

Social Security Fraud

Criminals could use your Social Security number in an attempt to collect your Social Security benefit. The Social Security Administration allows individuals to create an online account providing benefit or future benefit information.

To avoid issues with your Social Security benefit, you should consider registering online to view your benefit: By registering, this will make it more difficult for a crook to use your personal information to gain access to your Social Security benefit.

We live in a digital world and many companies have access to our personal information. No matter how many security measures are put in place, data breaches continue to occur creating the need for us to be proactive in protecting our personal information. 

For more information, please contact your Apple Growth Partners advisor to discuss measures to protect your identity.