How to Prevent Identity Theft
According to a recent study conducted by the Federal Trade Commission, there are nearly 10 million instances of some form of identity theft each year. This has quickly become one of the fastest-growing crimes, and the number of people falling prey to identity thieves is expected to rise. But things are not hopeless. By closing the most likely avenues of attack and following a few simple guidelines you can significantly reduce the chance of becoming one of the victims.
There are two basic kinds of identity theft. The first is "account takeover," where a crook steals key information about your existing accounts in order to access them and steal money from them. An example of this would be someone obtaining your credit card number and then ordering a bunch of stuff online. The second kind is the "application fraud" where a thief obtains your name, address, Social Security number and other important information, then uses this information to open a new account in your name. An example would be someone digging up a discarded credit card offer from your garbage, mailing it in, then using the new card to rack up charges that are never paid. How can you protect yourself against both types of identity theft? Here are five specific suggestions:
- When mailing your payments, don't leave your outgoing mail in your mailbox for the mailman to pick up. It can be stolen, and your financial information compromised. Instead, drop your mail off at your local post office or at least a drop box nearby. And speaking of mail, use a locked mailbox at your residence so that your incoming mail does not get stolen either.
- Destroy any paperwork that contains your personal information, preferably by shredding it. This includes those credit card offers you get in the mail (many people just throw them away!). "Dumpster-diving" is an increasingly popular sport among crooks, and they can use your discarded documents to apply for accounts in your name. And don't forget about digital data! If you are discarding an old computer, your files could still be saved on it even if you deleted them. Deleting a file does not actually remove it from your hard drive, and a tech-savvy dumpster-diver can still retreive it. To permanently remove a file you have to destroy it with a program like ShredXP or something similar.
- Don't give out any personal information over the phone, mail or the Internet until you know exactly whom you are dealing with and you have initiated contact. If you get a call from someone saying "it's your bank," ask for their name and phone number and call them back once you've verified that the phone number is indeed your bank's. There's another increasingly popular scam where a crook posing as a mortgage company calls a homeowner and offers an unbelievably low interest for refinancing, but "Only if you act fast!" by applying right away over the phone. Again, ask for the name and phone number, then verify that it is legitimate. If you get an e-mail that seems to be from a financial institution asking you to "click here" to update your information – beware. The web site the link takes you to may look real, but it is usually bogus. Instead, if it looks like a company that you do business with, call them to verify that they have indeed sent the e-mail, and then visit their web site by manually typing in their web address in your browser (don't use the link that arrived in the e-mail).
- Protect your Social Security number by disclosing it only when absolutely necessary (for example, when applying for a loan or filling out tax forms). Some companies that ask for your SSN don't actually require it (for example, video rental stores), so ask if adifferent number can be used. Also, don't have your SSN and driver license preprinted on your checks – it's an unnecessary risk.
- Analyze your credit report annually. If you notice anything that shouldn't be in there, notify the credit bureau's fraud department right away, file a report with your local police department and contact the creditor with whom the fraudulent account was opened. These were but the most essential suggestions for keeping your sensitive information safe. You can find more good ideas at the following web site: www.consumer.gov/idtheft