Identity theft is a plague, but advisers can help

News that hackers have stolen — and published — sensitive financial details of high-profile individuals such as Vice President Joe Biden, first lady Michelle Obama and rapper Jay-Z serves as a reminder that no one is immune to having their identity stolen and credit wrecked.

Financial advisers can help prevent identity fraud by suggesting regular credit report checks, as well as recommending that clients purchase protection from services such as IdentityGuard or Lifelock.

CREDIT ALERTS

Lifelock, for instance, will send subscribers an alert when someone tries to use their financial or personal information to apply for credit from retailers, seek a car or payday loan, or even sign up for a cellphone. It also lets subscribers know if someone has tried to change their address or sell their private financial information to others online. For about $110 a year for basic service, Lifelock also takes care of canceling and replacing credit cards, driver’s licenses and Social Security cards if a wallet is stolen.

ActiFi Inc. chief marketing officer Sam Richter told advisers attending the Financial Planning Association’s Business Solutions conference in Chicago this month that even though these services don’t work perfectly, advisers should encourage their clients to get protection for themselves and for their children.

“When’s the last time you got your 14-year-old’s credit report?” he asked.

In fact, child identity theft is all the rage because criminals have realized that it takes longer to detect when they have used the private information of a 3-year-old to open accounts and go on a spending spree.

Officials say that it takes close to a year to identify most of these cases.

Clients also should be wary about listing their children’s Social Security numbers on school, health and other forms, and are wise to ask if they can use a substitute number, experts said.

Shredding financial and health documents is also important.

And Mr. Richter recommends that advisers help their clients monitor the privacy controls on their social-media sites, including Facebook.

These settings must be checked regularly because firms are constantly making changes, he said.

A criminal who hacks into a Twitter account can seek more-valuable financial information using similar passwords.

Last month, “60 Minutes” highlighted a government study that says about 40 million Americans may have credit report errors. In the story, correspondent Steve Kroft showed how time-consuming and expensive it can be for consumers to fix such errors.

Think how grateful clients will be to their adviser if they never have to find this out for themselves.

Related Topics: Practice Management