Identity Theft Risk Assessment & Prevention Flashcards

Which risk factor is MOST associated with new account fraud following a large-scale data breach?

Answer: The type of data exposed, specifically SSN plus date of birth

SSN combined with date of birth provides the core identity elements needed to open new credit accounts, making this combination the most dangerous breach exposure.

Under the Fair Credit Reporting Act (FCRA), how long does a credit bureau have to investigate a consumer's dispute of a fraudulent account?

Answer: 30 days (or 45 if additional information is submitted)

The FCRA mandates a 30-day investigation window, extendable to 45 days if the consumer provides additional relevant information during the dispute process.

Which preventive measure MOST effectively reduces risk from mail theft of financial documents?

Answer: Switching all statements to paperless delivery and using a USPS-informed delivery account

Paperless delivery eliminates the physical document entirely, and USPS Informed Delivery provides digital previews so the client knows what should arrive — a dual-layer solution.

A client is a gig economy worker who frequently uses public Wi-Fi. Which tool MOST directly mitigates their network-based identity theft risk?

Answer: A virtual private network (VPN) with encryption

A VPN encrypts all internet traffic, preventing man-in-the-middle attacks on public Wi-Fi that could capture login credentials and personal data.

When assessing business identity theft risk for a small business owner, which exposure is MOST commonly overlooked?

Answer: The business's EIN being publicly listed in state registration records

State business registrations are often public records that expose the EIN, which criminals use to open fraudulent credit lines in the business's name.

Which element of a comprehensive identity theft risk assessment specifically evaluates digital account hygiene?

Answer: Auditing password strength, reuse, and multi-factor authentication enrollment

Digital account hygiene evaluation directly measures password security and MFA adoption — the two primary defenses against unauthorized account access.

A client placed a fraud alert on their credit file. Which statement MOST accurately describes how this affects new credit applications?

Answer: Creditors must take reasonable steps to verify the applicant's identity before extending credit

A fraud alert requires creditors to take reasonable identity verification steps before opening new accounts, but does not automatically deny applications.