Sleeper Accounts: How To Protect Your Finances From This Hidden Threat

Enable two-factor or multi-factor authentication on your accounts, too. Include those where you buy goods and services using your bank or credit card accounts. This adds an extra layer of security beyond just a password. Choose banks and vendors that allow you to activate strong verification for your accounts.

If you use a password manager, secure it with a strong master password and change it at least annually. Enable additional authentication methods like biometrics or mobile pins so only you can access your stored passwords.

3. Be cautious with your personal data

Limit the personal information you share publicly on social media platforms and other online channels where it could be harvested by fraudsters.

Use a shredder to shred any physical documents containing sensitive personal or financial information before disposing of it to prevent scammers from dumpster diving for your data.

Also, be wary of vishing phone calls, phishing emails and smishing text messages attempting to trick you into divulging personal details that could be used for identity theft. They're getting more sophisticated, including using AI. So, make certain your family members who might be susceptible to this deception, especially your elders, know about these tricks, too.

4. Place credit freezes and fraud alerts on credit reports

Contact the three major credit bureaus—Experian,3 Equifax,4 TransUnion5—to place a security freeze on your credit report. You do not have to subscribe to any of the services these bureaus offer to add a credit freeze, because that's free by federal law.

With a freeze in place, creditors cannot access your credit report to open new accounts without you lifting the freeze temporarily. This prevents scammers from opening up any accounts in your name that require a credit check. That includes lines of credit, secured loans, or using your savings accounts as collateral to purchase cars, homes or other assets. These transactions may require at least a soft pull on your credit, which can't be done against frozen credit reports.

If you've experienced identity theft or your information was found on the dark web, consider also adding a fraud alert to your credit reports. A fraud alert requires creditors to confirm your identity before opening accounts in your name.

You can add an extended fraud report to your credit reports if you've reported fraud to the police or identitytheft.gov.6 Those last for seven years. Both a security freeze and a fraud alert can help prevent sleeper accounts from being opened in your name.

While no single tactic can eliminate sleeper account fraud entirely, implementing multiple preventative layers can greatly reduce your risk.

Deter Unauthorized Users from Becoming Joint Account Owners

Thieves don't just attempt to open new accounts in your name. They may also attempt to add themselves as a joint account holder or secondary user on your existing financial accounts. This allows them to exploit the account once it builds up funds or credit history.

You can experience substantial losses before you're aware this happened. To combat this, work with financial institutions and implement these steps:

• Explicitly inform your banks and existing creditors that you require advance notice and explicit consent before any joint accounts or secondary users or signers can be added to your bank accounts.


• Request that your institutions notify you of any attempted changes or addition of users to your accounts, even if they deny authorization. Often, you can select specific automated security messages to get from your accounts.


• Implement dual authorization requirements for any transactions on joint accounts to ensure both signers approve withdrawals, transfers, or new credit being taken out against the account, like lines of credit or secured loans. Doing this can help prevent thieves from opening new accounts without your knowledge and running up unauthorized debt using them.


• Regularly review account activity and statements line by line, and review which authorized users or owners are listed on the account. This can help you identify any suspicious or unauthorized activity as early as possible.

Sleeper account fraud poses a persistent threat that requires an ongoing commitment to security. Don't let your guard down. Remain watchful for any indicators of this theft to protect your finances and identity.