njcpafirm.com: Protecting Your Financial Privacy

How to Protect Your Financial Privacy

The Internet has changed everything with respect to personal privacy. "Ten years ago, most Americans wouldn’t think of giving out their Social Security number or credit card number to anyone they didn't know," says Paul C. Brush, CPA, of Toms River. "With Internet use now an integral part of our lives, it’s become commonplace to provide your most confidential information such as bank account and credit card numbers, and even your Social Security number. Protecting your personal information today is more difficult – but it’s still critically important," Brush says.

What steps have you taken to keep your financial information and personal records confidential? You may be surprised to learn how many honest – and dishonest – people could have access to the details of your financial life. If you want to maintain better control over your privacy, the New Jersey Society of Certified Public Accountants (NJSCPA) offers these tips on how to safeguard your information:

Fend Off “Phishing”
According to the Federal Trade Commission, identity theft is the top consumer complaint it receives. One of the most common tricks that identity thieves use is “phishing.” In a phishing scam, the criminal sends emails that appear to be from a financial institution, a popular online retailer or even federal agencies, such as the Internal Revenue Service. The email asks the recipient to supply personal information – such as a bank account number or Social Security number – that is later used to make fraudulent transactions or commit other crimes.

As a general rule, legitimate organizations never ask you to supply personal information in emails. If you receive a message asking for private data, do not reply or click on any links in the message.

CPAs caution that these scams are not limited to the Internet. The telephone has been used to commit fraud for generations. Criminals pretend to be a bank or other legitimate organization and call their intended victims, claiming to be an employee who needs to “verify” financial data. Never provide any information when you receive a call, no matter how authentic it seems. If you believe it could be a legitimate request, end the call, look up the organization’s phone number and call back to verify that the requested information is legitimate.

Privacy Protection
While identity theft is a serious concern, there are other issues that threaten one’s financial confidentiality. Under federal law, banks, insurance companies and other financial institutions must inform you about their privacy policies. That includes revealing what kind of information they collect about their customers, how they protect that information and whether they share your data with other businesses.

The law allows these institutions to reveal or even sell your personal information to other businesses unless you “opt out” by specifically telling the organization that you don’t want them to share your data. The information they are allowed to reveal can include your name, address and Social Security number, as well as your assets, income – including child support payments – outstanding debt, mortgage payments and more.

Once a year, financial institutions are required to send you a notice that details their privacy policies and offers you the chance to opt out of their information-sharing practices. Review these notices when you get them, and let the organization know that you would like to opt out if you’re uncomfortable having your personal data transferred to other businesses. If the privacy notice tells you that the organization does not share information with third parties, then you don’t have to take any steps to opt out.