Thursday, October 5, 2017

How to be Vigilant in the Aftermath of the Equifax Hack: Part 2 (Insurance and Income Taxes)


In last week’s post, I noted that your personal identification information (PII) is now basically “out there” in perpetuity. In addition, proactive measures such as fraud alerts on credit cards and credit freezes will not deter non-credit related frauds such as tax refund identity theft and health insurance fraud. For that, we are simply told to “be vigilant,” probably for the rest of our lives. Hacked data can remain dormant for years before it is actually misused so you can’t let down your guard. Below are five vigilant practices to follow for insurance and taxes:

 

  • File Your Income Taxes Early- Beat fraudsters to your tax refund. They now have the name, address, and Social Security number of 143 million Americans, which is everything needed to file a fraudulent tax return.
  • Avoid Over-Withholding- Adjust your tax withholding, using a new W-4 form, to get a smaller refund or no refund; you’ll have little or no money stolen if someone uses your PII to claim a fraudulent tax refund.
  • Look for Suspicious Activity- Beware of “red flags” for tax ID theft such as a tax notice from an unknown employer. If you receive such a notice, contact the employer to explain that someone stole your identity.
  • Beware of Phony IRS Pretexting- Remember that the IRS rarely contacts taxpayers by phone and never by e-mail. Remember, the Equifax frausters have lots of information to sound convincing. Delete or hang up.
  • Review Medical Bills and Explanation of Benefits (EOB) Statements- Scrutinize bills and EOBs to look for medical services that were not received by you. Medical identity theft is very serious and can potentially lead to death if a fraudster’s medical history (e.g., blood type and allergies) is co-mingled with a victim’s.

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