Protect Your Wealth from Identity Theft (And Grow It With These Cybersecurity Stocks)
Equifax, Under Armour, Marriott, Facebook. These are just a few of the companies that have lost hundreds of millions of sensitive customer records to data breaches in the last few years.
Cybercrime is on the rise today, and identity theft is rising with it.
Identity theft via phone scam is on the rise as well. In fact, half of all mobile phone calls are expected to be scam robocalls by the end of this year.
In other words, it’s getting harder every year to protect personal information like Social Security numbers (SSNs) and bank account credentials. And criminals are getting craftier every year in the ways they steal this sensitive data from unsuspecting victims.
Do you know what to do if your identity is stolen?
Let’s go over this need-to-know process. We’ll also examine the undervalued cybersecurity stocks that are on the front lines of the battle against identity theft...
What to Do if You’re a Victim of Identity Theft
Before you start recovering from identity theft, you obviously have to be aware that your identity has been stolen.
Many people wait for their thief to start emptying their bank accounts or borrowing money in their name before they take action. But there are ways to check if your personal data has been stolen before it starts to hurt you.
HaveIBeenPwned.com is a valuable tool that can tell you if you’ve been affected in any recent data breaches. The site simply asks you to enter your email address, then turns up a list of recently hacked websites at which you have an account (as well as a list of useful online security tips).
If you suspect that you’ve given sensitive information over the phone to a scammer posing as a legitimate representative of your bank, credit union, or tax authority, you can always hang up and call the institution yourself to verify the legitimacy of the first call.
Once you’ve learned that your identity has been stolen, there’s a simple four-step process you should complete as soon as possible to limit the financial damage:
- Contact the Federal Trade Commission (FTC). The FTC website should be your first stop as an identity theft victim — especially if you believe your SSN has been stolen. Its designated identity theft victim website, identitytheft.gov, can walk you through the recovery process.
- File a police report. If you’ve ever had a car or house break-in, you know it’s important to get a police report of any stolen items for insurance purposes. Identity theft is no different. A police report could come in handy if you’re trying to recoup money stolen from your bank account. Most police departments will write up a report for identity theft, but if yours won’t, you can still create a law enforcement paper trail by filing a complaint with the FBI’s Internet Crime Complaint Center.
- Contact the three major consumer credit bureaus and freeze your credit. There are three companies that assemble and update credit reports: Experian, Equifax, and TransUnion. These three companies’ websites should be your next stops after contacting the police. Dispute any fraudulent accounts the identity thief has created on your credit report, and freeze your credit to prevent the thief from creating any more. The three consumer credit bureaus are required by law to provide credit reports and freezes to identity theft victims for free.
- Contact the IRS, your bank, and any other institution where you believe your stolen information was used. Now that you’ve contacted the FTC, obtained a police report, frozen your credit, and disputed any fraudulent credit items, you have everything you need to recover any lost money. Of course, we can’t guarantee that every company or institution you contact will be able to help you. But by notifying them with plenty of documentation, you’ll put yourself in the best possible position to get your money back.
Make sure to keep detailed records of each step of this process.
Now that we’ve learned how to recover from identity theft, let’s learn how to profit from the valuable cybersecurity companies that are working hard to prevent identity theft from happening in the first place...
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These Cybersecurity Stocks Are Fighting Back Against Identity Theft
Every major corporate data breach — like the four described at the beginning of this article — brings calls for better corporate cybersecurity.
After all, it’s not the fault of Experian, Under Armour, Marriott, and Facebook customers that their personal data was stolen — it’s the fault of those companies for skimping on security measures.
That means there’s a silver lining to the growing number of large data breaches: They’re creating demand for cybersecurity services and thus investment opportunities in cybersecurity stocks.
Which ones should you buy? That’s a complicated topic — one best discussed by someone with more industry-specific knowledge than me (more on that in a moment).
A broad-based cybersecurity ETF, like the ETFMG Prime Cyber Security ETF (NYSE: HACK), provides good exposure to the sector as a whole. As you can see, HACK has handily beaten the S&P 500 over the last few years:
But if you’re looking for a more specific cybersecurity play that can deliver bigger, faster gains, Briton Ryle is the man to ask about it.
Readers of his newsletter, The Wealth Advisory, are up more than 71% in just two years on a pioneering cybersecurity stock — and that stock still has plenty of room to run.
That’s because it has a suite of products devoted entirely to identity security and information theft prevention, and those products are catching on with a growing list of Fortune 500 companies.
Until next time,
Samuel Taube brings years of experience researching ETFs, cryptocurrencies, muni bonds, value stocks, and more to Wealth Daily. He has been writing for investment newsletters since 2013 and has penned articles accurately predicting financial market reactions to Brexit, the election of Donald Trump, and more. Samuel holds a degree in economics from the University of Maryland, and his investment approach focuses on finding undervalued assets at every point in the business cycle and then reaping big returns when they recover. To learn more about Samuel, click here.
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