What do identity thieves and CPAs have in common? Tax season is their busiest time of the year!

As I type these words, it’s tax season, and you know what that means… all of your W2s, 1099s, property tax statements, and other tax forms are on their way to you via postal service. You know this, I know this, and identity thieves know this, which is why this is their busy season. This doesn’t mean it is the only time of year that identity thieves are lurking in the shadows gathering information about you, so whether you are reading this as soon as it is published, or months or years later, the tips I describe apply.

Prior to being a Private Wealth Manager at Fiat Wealth Management, I was a sworn law-enforcement officer and finalized my law-enforcement career as a Financial Crimes investigator. In this brief blog post, I will discuss some common forms of identity theft and ways to avoid falling victim to them.

Rest assured, in today’s age of information, it is not a matter of “if” but rather a matter of “when” your information will be compromised. However, staying informed and taking basic precautions will limit your exposure and limit the damage that can be done by identity thieves.

When we think about identity thieves, we tend to think of famous thriller movies where identity thieves literally take over the hero’s life and wreak havoc. In reality, it can be as simple as a stolen credit card number used for online purchases or an application for a line of credit under your name. More often than not this is done by a complete stranger to you. Here are some examples of what I saw as a financial crimes investigator:

Stolen Mail and Red Flagging

In the residential neighborhoods of the United States of America, turning the red flag up on your mailbox lets your USPS delivery person know there is outgoing mail inside the mailbox. It also is a way of letting everybody else know there is outgoing mail in your mailbox.

What are typical things we mail? Checks for utility payments and grandchildren’s birthdays are amongst the most common stolen checks I encountered as an investigator. A check can be washed with surprising ease, re-written, and used once. Alternatively, thieves with only slightly more sophistication can use the information on the check (your name, your address, your account number, and your routing number) to manufacture their own checks and use them multiple times until your account is depleted and/or you or your financial institution put a stop to it and close your account.

What Should You Do

Protect yourself by handing outgoing mail directly to your delivery person, driving it to the post office, or dropping it in a blue USPS box.

However, outgoing mail isn’t the only problem. As I mentioned at the start of this blog post, incoming mail, especially during tax season, can be just as damaging. Using the information on any of your incoming tax forms (name, address, date of birth, social security number, etc), identity thieves can file a fraudulent tax return in your name, open a line of credit, or sell your information on the internet for other thieves to use in one of those ways.

What Should You Do

Utilize USPS Informed Delivery so you know when/what to expect in the mail, and retrieve your mail from your mailbox as soon as possible every single delivery day.

Theft from Auto, Purse Snatchers, and Pickpockets

Nearly every single time I spoke to a theft victim, I heard works similar to “I didn’t think to not lock my car/not leave my purse unattended/not leave valuables in my parked car… I thought this wouldn’t happen here, this is a good neighborhood.”

Thieves that smash your car window to take the backpack they can see through the window, or snatch your purse from a shopping cart or hanging from your seat in a restaurant will typically take out all valuables and financial cards, and dump the rest. Then, within minutes, they will try to spend as much money as they can use your cards - typically to purchase gift cards or high-end electronics which they later sell for cash.

What You Should Do

If you don’t already, lock your car and leave no valuables behind. Similarly, don’t use the child seat in your shopping cart to carry your purse, and avoid putting your wallet in your back pocket.

Online Scams

The weekend before writing this I took apart my son’s loft bed, which he had outgrown, and posted it for free to the first person able to pick it up using Facebook Marketplace. I immediately got a response from an interested party, and after some back and forth they requested I switch to texting to set up the logistics of the pickup. I texted them, and immediately received a response with a link and instructions to click the link and arrange for receiving hundreds of dollars in cash for the bed I was giving away for free.

This is one of many forms of online scams. They can come in emails, via text messages, or through links and advertisements on less-than-optimally safe websites. Mine was considered “smishing,” which is the text message (SMS) form of email phishing, which also tries to get the recipient to click a link.

What You Should Do

If it sounds too good to be true, it is. Nobody is going to pay you cash for a bed you are giving away for free. If you need to go through unusual steps for any transaction (I will pay you $1,000 for your $300 couch, please send the remaining $700 to my relative in a foreign country), don’t proceed. Don’t click on any links sent to you from unknown sources, and confirm and re-confirm the sender’s email address when you think they are coming from someone you know.

Conclusion

If it hasn’t happened yet, at some point in your life your information will be compromised. When it happens, report it to your local law enforcement agency and follow their guidance to protect yourself from further damage and possibly recover damages. In the meantime, there are things you can do to protect yourself: lock your doors, be mindful of the information you share, and don’t click on anything you are unsure of in any way.

For more examples and an opportunity to listen to an old colleague of mine who is still active in the Minnesota Financial Crimes Task Force, make sure to listen to the newly released “Every Day is Saturday” podcast episode, where Brad and I chat with Minnesota Bureau of Criminal Apprehension Special Agent Rob Wilkinson!

Investment advisory services offered through Foundations Investment Advisors, LLC, an SEC registered investment adviser.

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