reality check: Monitor your finances to protect against identity theft
Protect your passwords. Shield the PIN pad while using an ABM. All great advice. But in a world where personal finances are hurtling almost exclusively toward the digital realm, how can you protect yourself from identity theft with any degree of certainty?
“The truth is that an individual can’t really prevent identity theft,” says David Feller, founder and CEO of Mogo Finance Technology Inc. “Bitcoin is just another example of how the world is going digital, and while we enjoy the benefits of services like Uber, Amazon, Netflix, and Airbnb, we are also exposing ourselves to greater risk for identity theft and identity fraud, as more and more of our data is stored and transmitted by third parties.”
The Canadian Anti-Fraud Centre logged more than 20,000 victims of identity theft in 2014 alone. Victims that year reported more than $10 million in losses. That may just be the tip of the iceberg. The centre estimates that only five per cent of all frauds are reported.
Stories about identity fraud victims make news daily. Even if banks and their insurers make good on stolen money, the lives of fraud victims can be derailed. They can be held up in years of legal wrangles and damaged credit ratings and are often forced to put their life plans on hold as mortgage applications and other loans are denied.
Even Canadians who try to avoid a digital banking footprint are at risk, as criminals register fraudulent loans and mortgages against their homes and other assets.
“Even if you only have a bank account, your personal information is already out there in credit bureaus,” says Feller. “In all likelihood, some of your personal data has already been hacked. Although we can all do things to minimize the risk of identity theft, the reality is there’s almost nothing we can do to really prevent it as we engage in this digital world. One of the best things we can do to minimize the risk of becoming a victim of identity fraud is to actively monitor our credit bureau for new credit inquiries.”
Mogo’s solution is MogoProtect, a new digital service designed to help consumers protect themselves against identify fraud. It’s available to Mogo members at $8.99 per month, roughly half the price of comparable monitoring services.
“We pushed MogoProtect up the line as the fifth product on our Mogo app, because we believe that identity fraud is one of the greatest risks to the financial health of consumers,” says Feller. “Our research indicated a major gap in an affordable mobile-first solution, and we developed MogoProtect to bridge this gap.”
MogoProtect monitors the Equifax credit bureau on an ongoing basis and notifies members enrolled in the service by push notification and email when a company makes a new credit inquiry. That could be triggered by anything from consent to a credit check while opening a new bank account to completing an application for credit.
“If it’s an inquiry you expected, there’s no harm done,” says Feller. “If it’s an inquiry you didn’t expect, MogoProtect will guide you through the next steps to help prevent you from becoming a victim. An alert from a mobile app is key as you’re far more likely to notice and take action.”
In cases of fraud, time is critical. Fraudsters often cast a wide net, leaving a history of failures before striking gold. However, the failures can generate a trail of credit inquires that allow individuals to set up road blocks before it’s too late.
Feller recounts the recent news story involving a Toronto woman whose identity was stolen. Thieves registered two mortgages totalling $500,000 against her home, each with a different lender.
“She investigated her own case and found out that the thieves had tried at a number of financial institutions,” he says. “Ten said ‘no’; two said ‘yes.’ A solution like MogoProtect would have alerted the homeowner within 24 hours of each of those lenders having reported an inquiry to Equifax. Given the time it takes to close something like a mortgage, she most likely could have prevented this from happening — not to mention avoiding the time and hassle it can take to resolve something like this if it does happen.”
Ride-sharing service Uber recently admitted the company tried to hide a major security breach that exposed data on 57 million users. The news underscores the risks Canadians face as they enjoy the benefits of the digital world, and also the importance of protecting their financial health against identity fraud.
“We believe that in this new digital world every Canadian needs a solution to help protect themselves against identity fraud,” says Feller.
“The risks seem to increase with every new hack and the impact to consumers can be significant, in many cases derailing important financial goals like buying a home, until the fraud is resolved. We believe MogoProtect is a great solution, but it’s simply important that they do something to protect themselves.”