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Last week, hackers obtained Social Security numbers, salary information and other personal data from more than 80 million customers of the major health insurance company Anthem Inc.

In the aftermath of this disturbing situation, which led to a FBI investigation, it’s helpful to learn the different steps you can take to protect yourself from a similar fate.

One of the best first moves you can make is to set up a fraud alert with the three major credit agencies: Experian, Equifax, or TransUnion.

Fraud alerts are free, protected under the federal Fair Credit Reporting Act, and include notifications on credit reports stating lenders must call or take other special precautions before obtaining credit in someone's name.

While this is a good place to start, unfortunately, the three aforementioned credit agencies have made it increasingly difficult to set up fraud alerts.

Such alerts have limited protections as they usually last just 90 days, after which you must contact the agency to renew them. It’s ironic that in this day and age, when we automate everything from paying bills to renewing subscriptions, fraud alerts still require a conscious, manual effort. That’s why you should consider setting calendar reminders on your phone, or notifying the professional that handles your accounts to pay special attention to when you need to renew your alerts.

Even with proper reminders and action, however, it’s still not always an easy process. According to bloomberg.com, People who try to renew their fraud alerts online are sometimes told they must submit documentation via mail instead.

“Or they're told they must register for accounts with the credit bureaus before proceeding, which subjects them to heavy-handed upselling,” Bloomberg explained.

An additional option is to set up a seven-year fraud alert, but you must first provide police-verified proof that your personal information was compromised.

Fraud alerts still serve a purpose for people who don’t want to pay for an identity theft protection service, which can range from $75-250 per year and can be subject to numerous restrictions and limitations. Unlike identity theft protection, which only protects you after a breach of information has occurred, fraud alerts can stop threats before they happen.

In the aftermath of the recent Anthem situation, the insurance company has offered free credit-monitoring services for victims of its breach, a common step companies now take after accounts have been hacked.

According to Bloomberg, Experian and TransUnion say they don't have a service to automatically renew fraud alerts and advise customers against repeatedly renewing on their own.

“Security alerts are intended for people who are or have reason to believe they may be fraud victims,” Experian said in a statement. “They are not designed to be used as a fraud-monitoring service.” TransUnion spokesman Clifton O'Neal said: “A 90-day alert is intended as a temporary protection for consumers who suspect, but are not certain, that they are at risk of identity theft.”

Unlike those agencies, Equinox now offers a renewal service of its own. Customers of the company’s credit-monitoring products, which start at $16 per month, get access to automatic fraud-alert renewals. The company does not allow third parties to renew fraud alerts on consumers’ behalf, however.

The bottom line is shielding yourself from identity theft—no matter what avenue you decide to take—is a vital step in your financial security. You’ve worked hard to achieve your assets and identity, so shouldn’t you work hard to protect them?

Ron L. Brown, CFP®

Author Ron L. Brown, CFP®

Ron is a CERTIFIED FINANCIAL PLANNER™ and president of R.L. Brown Wealth Management. He specializes in retirement, estate, and business planning for professionals and entrepreneurs. Ron assists his clients with creating a financial plan to ensure they are able to live their ideal lifestyle during retirement and leave a strong legacy for their family. Ron has been featured in The Wall Street Journal, US News, Yahoo Finance, Investopedia, and numerous other high profile financial publications.

More posts by Ron L. Brown, CFP®

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