Money management: Protect your financial privacy

2008-08-11 08:00:00

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 Minnesota Society of CPAs 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 that the agency receives. One of the most common tricks that identity thieves use is “phishing.” The scammer sends e-mails that appear to be from a financial institution, a popular online retailer or even federal agencies, such as the Internal Revenue Service. The e-mails ask 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.

It’s important to keep in mind that, as a general rule, most legitimate organizations do not ever ask you to supply personal information in e-mails. If you receive a message asking for private data, you should not reply, nor should you click on any links in the e-mail.

CPAs advise that these scams are not limited to the computer. Some fraudsters pretending to be a bank or other legitimate organization may send text messages to your cell phone asking for personal information. Others call their intended victims, claiming to be a bank employee who needs to “verify” financial data. If you are uncertain about how to respond, the best idea is to call the organization directly to find out whether the request is legitimate.

To learn more about identity theft, the FTC Web site has information at

Privacy Protection

While identity theft is a serious concern, other issues may threaten your financial confidentiality. Under federal law, banks, insurance companies and other financial institutions must tell 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. Be sure to review these notices when you get them, and to let the organization know that you would like to opt out if you’re uncomfortable having your personal data passed on 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.