5 Ways To Protect Yourself From Familiar Fraud

Don't Let Someone You Know Steal Your Identity

5 Ways To Protect Yourself From Familiar Fraud
January 20, 2017

Identity theft is bad enough when it comes from some faceless hacker halfway across the world. It can be positively devastating when it is committed by someone you know — perhaps a close friend, or even a family member.

Familiar fraud is more common than you might think. In a 2014 fraud report by Javelin Research and Strategy, approximately 0.35% of adult American consumers were victims of familiar fraud in 2013 — equivalent to 847,000 fraud victims nationwide.

Substantial damage can be done through familiar fraud, simply because it is more difficult for victims to believe that their trust has been betrayed. The fraud can go undetected for years, especially in cases where parents are creating fraudulent accounts under their children's name.

How can you protect yourself against familiar fraud? We offer some helpful hints to prevent you from falling prey to this insidious crime.

1. Monitor Your Accounts – Review all of your accounts regularly for any sign of unusual activity. Perpetrators of fraud often start with smaller purchases or withdrawals to see if you are paying attention. Be sure to be comprehensive in your review and don't forget about credit card accounts that you use sparingly. Check your credit report periodically to make sure fraudulent accounts have not been opened in your name. You can check your credit report and your credit score for free within minutes using Credit Manager by MoneyTips.

"It's about checking your credit card statement as often as possible; checking your online bank statement as often as possible; checking your credit report," says CompareCards.com Chief Industry Analyst Matt Schulz. "Even though we all go to Facebook, Twitter, Instagram... dozens of times a day, we all think that it's way too much to ask to go to your bank website once a week, and the truth is, it doesn't take that long to check and make sure that nothing funky is going on."

2. Protect Your Sensitive Documents – Never leave bank or credit card statements, identification documents, tax returns, medical records, or other sensitive documents out where they can be read by any visitor to your home. Consider a lockbox for your most important documents. Do not leave your purse or wallet in the open where your driver's license and other information may be easily accessed. It may seem like overkill, but remember that anybody perpetrating familiar fraud already has a level of trust with you and greater natural access to your information.

3. Guard Your Mail – It makes sense to protect sensitive documents, but why keep an eye on your junk mail? Because your mail contains information that can be useful to thieves, and if you leave it in a pile somewhere in the house, you are increasing the chances of familiar fraud. Shred and dispose of junk mail, and protect anything worth keeping as advised above. "Everyone should have a shredder," says Adam Carroll, Founder and Chief Education Officer of National Financial Educators. "Every single credit card application, every single bank statement, every single thing that comes in that has even your address on it should be shredded."

4. Use Password-Protection and Encryption – Some people see no reason to apply password protection and encryption to devices and files within the secure confines of their homes, but our homes are not quite so secure when it comes to familiar fraud. Use encryption whenever possible, and choose passwords and security methods that are not easily guessed or deduced by others. Do not protect everything only to write all your passwords down in an easily accessible place (password books sitting in the open by the computer are all too common).

5. Don't Share Information – You may not be able to stop familiar fraud from a parent or sibling who knows your personal information, but you can prevent extended family members and good friends from defrauding you by keeping your personal information away from them. That extends to sharing documents that contain important information such as passports and drivers licenses — and, by all means, do not share your credit card with anyone who is not an authorized user. Why provide that level of temptation to anyone?

Nobody wants to believe that he or she can be cheated by friends or relatives, but it does happen. You can take simple steps to make that fraud less likely. Protect yourself against familiar fraud, and you won't have to give friends and relatives any extra scrutiny.

Protect your credit – protect your identity – protect yourself with a free MoneyTips trial.

Photo ©iStockphoto.com/designer491

  Conversation   |   4 Comments

Add a Comment

By submitting you agree to our Terms of Service
Nancy | 12.19.16 @ 19:46
In addition to discovering that you are a victim of Familiar Fraud is the complexity of the decision to prosecute it. When it's a child or family member, it can be difficult to make the choice. I'm sure there are more cases than reported.
Zanna | 12.20.16 @ 02:08
This is something I need to be more aware of now that the kids are bringing home friends that I don't know well. Our laptops are usually out and open, and easily accessible. I need to be more secure!
Chrisitna | 12.20.16 @ 19:25
I use a password keeper and have found it helpful to make sure I'm not using the same password - that way if one account gets compromised, the rest aren't in as much jeopardy.
jesus | 07.15.18 @ 06:18
This is so much material to remember, but I am a quick learner and up for the challenge. Thank you for your guidance.
$commenter.renderDisplayableName() | 12.04.20 @ 11:04