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Most of us enjoy the convenience and flexibility of the rapidly expanding suite of financial services available to us online and via mobile devices. Yet while consumer use of mobile banking and credit apps increases, credit and identity scams are multiplying faster. According to the Federal Trade Commission, identity fraud incidents jumped 45% from 2019 to 2020 and appear to have surged in 2021 as well. The FTC estimates identity fraud cost Americans $56 billion last year.

That is why it is important to take the simple steps available to minimize the risk of identity theft and credit scams. Here are some of the most important actions to consider.

- Review your credit reports. The Fair Credit Reporting Act, consumers have the right to order a free copy of their credit history once every 12 months. Visit AnnualCreditReport.com to request a copy from each of the three major reporting agencies, Transunion, Experian and Equifax. The law also requires credit bureaus to timely correct any inaccurate information once you notify them.

Unknown to many people, there is another agency you should contact as well. Innovis maintains similar consumer credit history and primarily furnishes reports to banks and insurance companies to identify prospects for pre-screened offers for credit cards and insurance products. Contact Innovis.com to request their report.

- Freeze your credit. One of the most effective precautions you can take is to freeze your credit reports. A credit freeze prevents the agencies from providing consumer data or credit reports to any potential new lender or other third party without your express permission, subject to some exceptions. This is essential if you suspect there may have been a breach of your data or an attempted fraud, but it is a prudent step for everyone to take as the risks continue to increase. Equifax itself suffered a breach in 2017 that exposed the personal information of 140 million people, so no one is immune. Contact each of the four agencies directly via their websites to initiate the freeze. You can easily lift it temporarily or permanently when you wish to apply for a loan or a job.

- Opt out of prescreened offers. Many of us are accustomed to the constant influx of pre-authorized credit card offers clogging our mailboxes. Each of these offers originated when a credit agency sold your history to a marketer, increasing the possibility of data escaping in the process. You have the right to cut down the junk mail and prohibit firm offers of insurance or credit by visiting OptOutPrescreen.com or calling 888-5-OPT-OUT. The process covers all four of the agencies already mentioned, and you can choose to block solicitations for five years or permanently and also unblock at any time should you miss the joy of shredding.

- Stop your bank from sharing. Financial institutions are afforded wide latitude in sharing your personal information for marketing purposes, both in-house to offer additional products, and with unrelated companies under a marketing agreement. The law requires those institutions to send you an annual disclosure describing their information sharing policies, but the burden is on you to act. You can contact your bank directly to find out how to limit sharing of your data, especially with outside unaffiliated companies (again with some exceptions).

- Consider credit monitoring. In general, you can do almost anything a credit monitoring service can do. However, some people may prefer to outsource the whole process to a company that watches over their files for them. Credit monitoring cannot prevent fraud, but will review your records more closely and aid in restoring your identity should a theft occur. Services range from no-cost basic tracking to more expensive bundled offerings between $20 and $40 monthly including ID theft insurance. Note as well that identity theft insurance is also available for a nominal cost under most homeowner's policies, and that these policies do not make whole the financial loss but cover expenses incurred in restoring your record.

Financial technology has revolutionized our interactions with financial services, but convenience comes at a price. The new year is a good time to take a few easy steps to reduce the odds of a major headache later.

Christopher A. Hopkins is a chartered financial analyst in Chattanooga.

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