Chapter 2: Preventing Identity Theft

There are many ways to protect your private information from fraud. Though some tasks take a bit of effort, be aware that cleaning up the mess identity thieves leave behind is far more difficult and time-consuming.

Review Your Credit Report
At least annually, check your credit report from each of the three major credit bureaus - TransUnion, Experian, and Equifax - for fraudulent activity. You may receive one free copy of your credit report from each bureau per year through Annual Credit Report Request Service. The three bureaus have established this centralized service where you can order your reports online and view them immediately, or order hard copies. You are also entitled free reports from the bureaus if you spot inaccuracies due to fraud. In other cases you may also obtain your reports directly from the bureaus for a fee.

When you receive your reports, read them carefully for balances that do not seem right, accounts you never opened, or anything else that seems suspicious. Dispute inaccurate information with the bureaus immediately.

If fraudulent activity has occurred or you believe you are in danger of it happening, consider placing a fraud alert to your credit file. These alerts warn credit issuers that your personal data has been illegally accessed. Before issuing a new loan or line of credit, creditors must first verify your identity and gain your approval. To activate the alert, call one of the bureaus (the other two will be notified by the one you contacted) and request that it be placed on your file.

Privatize Your Personal Identity Information
It is extremely important that you do your part in keeping your information from falling into the wrong hands. Keep all identification and financial documents in a safe and private place. When asked for your information, never hesitate to ask questions – you should only provide personal data when you know how will be used and are certain it won't be shared. Only deal with individuals and businesses with whom you've initiated contact, and when you are sure they are legitimate.

Protect Your Mail
To prevent thieves from getting ahold of your mail, request a vacation hold when you go out of town and can't pick it up. Deposit bills and other mail that contains your personal and financial information in post office collection boxes or at your local post office. Be sure to empty your mailbox promptly too.

Practice Workplace Safety
It is easy to have a false sense of security while you are at work, but identity theft isn't just a problem at home. While at your place of employment, be sure to keep your purse or wallet in a safe place. Never keep it in plain view or in an easily accessible drawer or file cabinet. Consult your human resources department for your company's security procedures.

Secure Your Social Security Number
It is especially important to keep your Social Security number (SSN) private. Once a thief knows your SSN, he can use it to get your other personal information and then borrow in your name. Therefore, memorize your number rather than carrying your card, and never have it printed on your checks. Reveal your SSN only when necessary and to those you absolutely trust - always ask why they need it, how it will be used, and what happens if you refuse. The Social Security Administration sends Earnings and Benefits statements annually, so be sure to check yours for accuracy.

Guard Your Plastic
It is surprisingly easy for thieves to use your credit and debit cards. Because of that, carry only those cards you really need (assess your financial situation and cancel unnecessary accounts too). Copy both sides of your credit cards so you have all the account numbers, expiration dates, and phone numbers, and keep the documents in a private place.

Shred statements and pre-approved credit card offers with a crosscut shredder when you are done with them. If your mailbox is overflowing with excess credit promotions, you may opt out of them by adding your name to the Federal Trade Commission's National Do Not Call Registry.

When using your cards, be aware of people behind you at the ATM, or anywhere else you swipe your card. If you give your card to someone for a transaction, watch him swipe it (if you can) and immediately inspect the receipt for accuracy.

Know your billing cycles and contact creditors if bills don't arrive on time. When you get them, examine the charges on your credit card statements and look for errors.

Check Your Checking Accounts
When writing checks, print firmly and with indelible ink. Keep your checkbook in a safe place at all times and read your account statements, checking for fraudulent activity.

Protect Your Computer
Use a firewall program to prevent your computer from being accessible to hackers. Make all passwords hard to guess by using a complex combination of numbers and upper and lower case letters. Don't download files or open hyperlinks and emails from people you don't know.

When shopping online, use a secure browser - enter personal and financial information only when there is a "lock" icon on the browser's status bar and look for the URL to read "https" versus "http."

Because laptops are easily stolen, avoid storing personal and financial information on them. If you must though, use a strong password and don't use an automatic log-in feature. Always log off when you're finished.

Before disposing of your computer, be sure to delete personal information using a "wipe" utility program to overwrite the entire hard drive.

Consider Extra Protection - Carefully
If you are exceptionally concerned about the possibility of identity theft, you may consider paying for added protection or a monitoring service - but do so only after carefully reading the fine print and weighing the cost against the benefits. Some businesses are scams themselves. Research the company's history and check the Better Business Bureau's complaint log before signing an agreement.

• Credit Monitoring. Each of the three major credit bureaus offers a fee-based credit monitoring service. They typically provide regular credit report updates about fraudulent activity, new inquiries, new accounts, late payments, and sudden changes in your credit card balances. These plans often include a specific number or unlimited credit reports being mailed to you automatically or at your request, and access to specialized customer service.

• Credit Protection. Credit protection is offered by private companies and some financial institutions, and the price and service varies considerably. Most will reimburse victims of identity theft for out-of-pocket expenses (up to a certain dollar amount) and help you through the process of contacting creditors, writing affidavits, and filing reports.