With all the other priorities that you have to tackle, shredding your financial documents probably ranks low on your "to-do" list (if it's on there at all). However, shredding documents is one of many ways to secure all the wealth you've gained over the years.
When an identity thief accesses a bank account by finding personal information in the mail, trashcan, or dumpster, the result can be a significant financial loss. It can also be time-consuming and frustrating to work with fraud departments to recoup your funds. Shredding your documents keeps your confidential and financial information away from the eyes of anyone who cares to look.
Many businesses invest in document shredding services because companies store financial and network data and confidential employee information. Individuals can also benefit from shredding documents with their personal and financial information. Let us help you secure your finances by showing you five reasons why you shouldn’t overlook shredding your financial documents.
Prevent Identity Theft
Identity theft is devastating and affects millions of Americans each year. It’s defined as any fraud associated with using someone else's personal information. When someone has your personally identifiable information (PII), they can apply for and open up credit cards in your name, take out loans, and withdraw money from your bank account. GIACT, a leader in identity fraud prevention, reported that in 2020, 47% of Americans fell victim to financial identity theft, 37% experienced fraud application, and 38% experienced account takeover.
Equifax stated that one of the many ways that financial identity theft may occur is through identity thieves digging through the mail and trash, searching for:
- bank and credit card statements
- preapproved credit card offers
- tax information
Canceled checks and bills are also items that identity thieves search for in the mail that you should shred. Checking your mailbox daily in the first place rather than letting the mail pile up will keep your mail out of the wrong hands. The less financial information left hanging around, the more financially secure you'll be.
A few of the many ways to prevent identity theft include:
- Freezing your credit with Equifax, Experian, and TransUnion to restrict access to your records so that new files can’t be accessed. You can always unfreeze your credit when you want to open a new account Safeguarding your social security number (SSN) by not carrying your card with you and shredding any documents with your SSN on there
- Submitting a “hold mail request” to the United States Postal Service to prevent your mail from being unattendedwhile you’re out of town
- Considering purchasing a U.S. Postal-Service Approved lockable mailbox
Avoid Financial Loss
It’s incredibly frustrating to wake up one day, check your account, and discover that money is missing. Document shredding can help you avoid a lot of inconveniences Depending on the type of data hacked, the hurdles of recovering your money can include:
- Disputing an identity theft criminal's activity in your credit files and working to restore your credit score
- Cleaning up and closing jeopardized bank accounts and opening new accounts
- Working with the Social Security Administration (SSA), if a thief used your Social Security number to gain employment
- Working with the IRS if you fall victim to tax refund identity theft
- Working with the IRS because the identity thief's income, using your social security number, makes it seem as if you're underreporting your income
An identity thief can take over your investment and financial accounts, potentially affecting your retirement, mortgage, and child or grandchild's education. They may also be able to intercept social security benefits if they gain access to your social security number.
Save Yourself from Time-Consuming Fraud Reports
If only recovering money from a hacked account was as simple as requesting a refund. When you ask a company to refund your money for a purchase you made, it might take no longer than ten business days for the funds to return to your account. However, reporting fraud and working with your bank, credit card company, credit reporting agencies, the IRS, or Federal Trade Commission (FTC) can take weeks or months to resolve.
Also, according to the FTC, they cannot resolve individual reports but use reports to "bring cases against fraud, scams, and bad business practices" to the eyes of 3,000 law enforcers.
When these entities process claims, they follow strict policies that can take time because of the thorough documentation. Shredding documents aids in financial security, but it also removes the emotional stress of waiting for your money to come back to you.
Protect Yourself from Medical Identity Theft
When your account is hacked, it doesn’t only impact your finances. It could also affect your healthcare. Shredding old medical bills and statements will help you avoid medical identity theft.
Medical identity theft happens when a fraudster uses a person's PPI, especially a Medicare number, to get devices, treatment, or medicine and submits fraudulent claims under the policy holder's name. Medical identity theft could result in the policyholder facing expensive bills for items they never received.
Medical identity theft can also disrupt medical care because of treatment delays, misdiagnoses, and improper care because the policyholder and fraudster's health data merged. Also, some identity thieves commit prescription fraud and sell the medication they receive, resulting in potential legal penalties.
A Home Paper Shredder and Residential Shredding Services are Both Convenient
Whether you shred your documents at home or hire a company, both are convenient options and better than leaving your financial records vulnerable. You can store a paper shredder in your home office and shred documents as soon as you realize you no longer need them.
Also, residential shredding services have grown in popularity because families generate thousands of pounds of paperwork that include their personal information. Professionals can take care of this quickly if you have a lot of documents to shred but little time because these businesses have advanced and high-powered equipment that makes it difficult to reassemble documents, as many identity thieves attempt to do.
Consider Going Paperless
Going paperless has been a trend for years because it’s an eco-friendly choice that reduces the amount of paper you use. An alternative to wasting paper and shredding documents is going paperless by utilizing mobile banking platforms. Also, most healthcare providers offer online patient portals to help you view test results, past or future appointments, medical and doctor instructions, and billing statements.
Starring all important emails is another way to keep track of vital financial information. Payment confirmations can go directly to your email when you make purchases or pay bills. That way, you won't have to save physical copies of financial receipts.
These online platforms are secure because they are password protected. While online identity theft and cyber attacks are still issues, you can lessen your chances of being hacked by vetting all the emails you open and not sharing your password with anyone.
Secure Your Finances with JL Smith [H2]
We encourage clients to secure their finances with our document shredding events. In 2021, the FTC reported 50,421 identify theft claims in Ohio. To help our clients avoid identity theft, we hold shredding events every year after tax season.
Many factors play a role in financial security. Something as simple as decluttering the drawers in your home can make a large impact on your financial security. With their knowledge and expertise, JL Smith advisors can secure your retirement and help you smooth out the bumpy road of managing and keeping track of your finances
If you ever feel overwhelmed about planning your financial journey, contact us. Our advisors are here to help.