How to Protect Your Identity, Finances If You Lose Your Phone

It’s a gold mine for ID thieves. Take steps to protect your information.

Lose your smart phone and you could have more to contend with than missed calls and text messages, a lost contact list, and Angry Birds withdrawal. Anyone who finds it will have an opportunity to empty your bank account, steal your identity or both.

DOWNLOAD: Smart Phone Safety Tips From a Professional Hacker

Think of your smart phone as part wallet, part computer. If someone were to access your online-banking or eBay application, for instance, the funds in your checking account could be gone in minutes. Thieves could also get information from your e-mail messages -- as well as reset passwords for your online accounts and retrieve them from your e-mail account. Or they could use your contacts for phishing schemes.

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Preventive measures. Start by using your phone’s security settings to lock your screen with a password. Only 38% of smart-phone owners take that simple, effective step, according to Javelin Strategy & Research. And don’t use an obvious PIN (such as your birth year) or a simple pattern to unlock your screen. Hide the phone as you enter the code if strangers are nearby.

When you finish using your applications, log out. At the very least, sign out of your banking and payment apps (and any others that could allow someone to go on a spending spree). And don’t store your log-in information in an app’s data-entry fields for easy access. Even apps that seem harmless could be a treasure trove for a crook, says Eduard Goodman, chief privacy officer for Identity Theft 911. The list of connections on your Facebook account may reveal your mother’s maiden name, for example.

If your phone disappears. You can install a location-tracking app on most smart phones. Apple’s iPhone has the Find My iPhone app built in, but you need to activate it; apps such as “Where’s My Droid” are available for Android devices. The feature is a big help if, say, you can’t remember where you left your phone. And if it has been stolen, police may be able to use the app to help track down the thief.

Also, set up your phone so that you can remotely erase its data. Your wireless carrier may offer this service, and many security apps include the feature. But keep in mind that a sophisticated thief may be able to restore the information, says Kevin Johnson, senior security consultant for Secure Ideas. Your data won’t be lost if it’s saved automatically to your Google or iCloud account, and you can regularly perform backups by plugging your phone into your computer.

Malware and more. Losing your phone isn’t the only potential danger. Hackers can collect sensitive information through malware. Android phones are particularly susceptible because developers can more easily submit virus-laden apps. (Google has an open-source market, while Apple has a rigorous screening process for apps.) Research an app’s developer and read reviews of the app before you download it. If you receive suspicious-looking text messages, don’t reply or click on links.

Some of the big names in antivirus protection offer malware protection for phones (Symantec’s Norton Mobile Security is $30). But you may want to wait until such mobile software improves, says Johnson. The programs may slow down your phone and offer little protection.

Using unsecured Wi-Fi and leaving your Bluetooth connection open are other actions that could leave your phone vulnerable to hackers. Goodman suggests turning your cell phone off at night to avoid stealth attacks while you sleep.

Lisa Gerstner
Contributing Editor, Kiplinger's Personal Finance

Lisa has spent more than15 years with Kiplinger’s Personal Finance and heads up the magazine’s annual rankings of the best banks, best rewards credit cards, and financial-services firms with the best customer service. She reports on a variety of other topics, too, from retirement to health care to money concerns for millennials. She has shared her expertise as a guest on the Today Show, CNN, Fox, NPR, Cheddar and many other media outlets around the nation. Lisa graduated from Ball State University and received the school’s “Graduate of the Last Decade” award in 2014. A military spouse, she has moved around the U.S. and currently lives in the Philadelphia area with her husband and two sons.