Wednesday, March 4, 2009

Tax Season Alert - The 3 Big Myths That Can Make You a Victim of Identity Fraud

The continued popularity of electronic tax filing has made this annual burden incredibly simple for many taxpayers. As a result, these individuals mistakenly equate ease-of-use with safety. This assumption too often leads to the #1 most-committed crime in the world - identity theft. The opportunities for your personal information to unwittingly fall into the hands of thieves wanting to commit fraud has grown exponentially along with the explosion of online tax return submissions. Do not falsely presume that your identity is protected.

Here are the 3 biggest myths that risk your identity during tax season, as well as important security tips to avoid the time, money and hassle related to identity theft.

Myth #1: Documents, PDFs and personal information used in the creation of your tax returns are safe just sitting on your computer.

Truth: Hackers may access your computer in various ways at ANY time via viruses, Trojans and Botnets. Confidential information on PDFs is NOT safe.

· Password-protect all tax returns that you print to PDF from your tax software so that Social Insurance Numbers are secure. Permanently shred unsecured documents on your computer that contain personal information used to prepare your tax return.

· Configure all peer-to-peer file sharing programs to disable the sharing of your personal folders so identity thieves can't download your tax return.

· Install the latest updates to your operating system to prevent known Windows or Mac vulnerabilities from being exploited by hackers.

· Don't save your password in your web browser when accessing payroll services, employers, banks and other institutions that keep your personal information because it could easily be stolen.

Myth #2: It's safe to electronically transmit confidential data to an accountant, employer, or the CRA.

Truth: Your personal information is at the greatest risk when it is en route from one location to another. Hackers and thieves have the ability to eavesdrop or spy on it when it is unprotected.

· Encrypt supporting tax documents you plan to email to your accountant to prevent anyone from snooping on your network and gaining access to your financial information.
· Create strong passwords when registering to download your CRA forms, and other personal tax documents from your employer so that they are not easily guessed by strangers.

Myth #3: Paper copies of your important tax documentation are always safe since they are in your control and are not accessible to electronic hackers.

Truth: Identity thieves are incredibly creative and will attempt to access your confidential information for their own personal gain however and wherever possible, especially when you least expect it.

· When you postal mail your tax return to the CRA, send it from a secured location, like the post office or an official Canada Post collection box; do not let it sit in a box overnight as it could be stolen. For added security use certified mail.
· If making photo copies of your financial documents, make sure the photocopier does not store images of them in memory.
· Using a traditional paper shredder, destroy the printed documents used during tax preparation that you no longer need.

The government takes your tax dollars on April 30th. Do not let a thief take your identity too. Employ a multi-step approach in the prevention of identity theft that includes awareness, changes in behavior, and security tools. Doing so will secure your personal information this tax season and allow you to rest easier on May 1st and after. One final tip:

· Monitor your credit report regularly.

adapted for Canadian use originally posted at eZine Articles

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