Simple Steps to Avoid Identity Theft

Over the last three days, three different readers have written to me in a panic, concerned that they may be the victims of identity theft. At least one of these readers clearly was a victim of such theft – the other two may have had their identity stolen, but it hasn’t been used yet.

I’ve been the victim of this myself in the past. I had the number of one of my unused cards stolen a couple years ago (the data was apparently on a backup tape that was stolen from some organization) and it was actually maxed out before I became aware of it. It took quite a bit of effort to get that all straightened out, including calls to all the credit bureaus. If they had been even a little bit more subtle, I probably would have never even known about it and my credit would have been destroyed.

There’s a lot of good advice out there on how to react to possible identity theft – call your bank, all of your credit card companies, and the three credit bureaus, for starters. This advice, though, is really only useful if you’re pretty sure your identity already has been stolen.

On the other hand, there are some very simple things you can do to prevent (or at least heavily reduce) the chances of your identity being stolen.

Never give out personal information to solicitors, especially bank account information, credit card information, your Social Security number, your mother’s maiden name, or your drivers’ license info. If someone calls you on the phone, emails you, or stops by your door, never give out this information. If they’re offering something you’re interested in, tell them that you’ll think about it and initiate contact to them yourself – and don’t trust the contact info they give you. Look up the organization and find the correct contact information online, then contact them.

Cancel unused credit cards except for your oldest one. There’s little reason to keep unused credit cards around unless it’s your oldest card (as length of credit matters in calculating your credit score), so don’t take that risk.

Never enter any information into an online form unless you know quite well who you’re connecting with. Don’t follow links in emails and enter information because it looks like PayPal or Amazon. Instead, go to those sites directly first by typing in the URL.

Shred or burn any bill statements you no longer want to keep. I find a big bonfire works best for this kind of thing, but many people are in places where this doesn’t work. Often, bill statements contain enough information for at least the potential of identity theft, so keep them filed until you no longer need them, then burn them. Remember, though, that shredded bill statements make fantastic kindling for fires if you’re camping – almost anyone can get a fire started with that stuff.

Keep an eye on your credit reports. Get your free credit reports from the Federal Trade Commission each year (not freecreditreport.com) and make sure you know what everything is on that report. If there’s some stuff that you’re unsure about, track it down immediately.

Keep firm control over your wallet. I usually keep mine very thin and then store it in a high coat pocket most of the time, or in a front pocket during the summer. My wife actually carries a wallet much of the time, too, instead of a purse or a bag. The key is to make sure that you know where it is at all times and make sure it’s tough for pickpockets to easily grab it.

If you’re really concerned about identity theft, LifeLock can be a big help. Their service is a bit pricey, but they basically provide most of the help described above, both the preventative stuff – automatic sending of credit reports each year, automatic credit report monitoring, removal from credit card mailing lists – and situations where you lose your wallet, as they’ll call all of the credit card companies and other document issuers if you have your wallet stolen. Plus, they offer legal protection for you if your identity is stolen while using their service. For me personally, this service is a bit of overkill, but if identity theft is something that genuinely concerns you, it’s worth looking into.

In short, be smart. Your personal data is valuable – don’t make it easy for others to just grab it from you. If you live by that simple rule of thumb, you’ll drastically reduce the chances of identity theft in your life.

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42 thoughts on “Simple Steps to Avoid Identity Theft

  1. Sean says:

    Just to stress the email point, I work in security for a major financial firm and I cannot stress enough that no bank will contact over email to get your information. No matter what the email says (ie Your account may have been tamper with, please login to this link to verify your pin, etc…) you should never respond to these solicitations. If you think it may be legitimate you should call the number on the back of your card (Again not from the website or email that you received or were directed to) and verify it with a customer service rep.

    I’ve seen this work alot. Never give your information unsolicited. If they call or email you, you should not trust them by default.

  2. lulugal11 says:

    This post was timely as I just received a letter from my insurance company saying that a laptop with my personal info (SS#, address and DOB) was stolen from one of their offices.

    I immediately called the credit bureaus and had an alert placed on my information. I always check my credit reports and in fact just got a free one two weeks ago so I have something to compare to. The alerts and freeze only stay for 90 days so I will have to reorder them in three months but it is worth it.

    I never thought that would happen to me but it did….and I am glad I had already started taking those steps BEFORE it happened.

  3. Battgirl says:

    Excellent advice. I buy storage rooms when they are up for auction and resell on ebay for a living. You would not believe the amount of personal information that people store in these rooms. I have found, in almost every auction I have won, bank records, tax records and old bills belonging to the owners. I always burn those papers for them. Not so honest people may not. Be careful what you put in a storage room.

  4. Michael says:

    Trent,

    As a former user of TrustedID, I would definately not recommend it. As for LifeLock, their CEO’s identity was stolen so I don’t know how secure I would consider it http://blog.wired.com/27bstroke6/2007/06/lifelock_founde_1.html In order for true identity protection, you need to initiate a security freeze with each of the three credit reporting bureaus. Consumer Reports has an excellent article on their website and how-to guides for each site. There is a minimal effort and cost involved in placing a security freeze in most states. In some cases, if you are a victim of identify theft and have proof a security freeze will only cost you the postage. For more info, go to http://www.consumersunion.org/campaigns/learn_more/003484indiv.html

  5. Andrea says:

    The scary thing is that even with all these precautions, it can still happen.

    2 years ago I got a call from my credit card due to some unusual activity. I was traveling around the province for a vacation at the time, so I assumed the various locations caused a red flag, but it turned out that someone had stolen my credit card numbers, made themselves a copy of the card (I still had my card, and they managed to use their copy at a self-paying gas station) and charged up about $1500 at gas stations, liquor stores and Staples (?!).

    I didn’t notice any of this activity because I was out of town and not checking my accounts online, but since it was my bank that noticed it, luckily I had no troubles getting the charges removed.

    Based on the location of the fraudulent charges, the timing, and when I’d recently used the card, I’m 90% sure that the info was stolen when I paid for a meal at a sports bar using my credit card.

  6. Mrs. Micah says:

    The $10/month that LifeLock charges is cheaper, at least, than $14.95/month for “Free” Credit Report.com.

    Good pointers on identity theft. It’s pretty scary how much you have to keep tabs on these days.

  7. Frugal Dad says:

    I used to work in a fraud victim’s division at a bank, so I’ve seen first hand the nightmare identity theft can present. You’ve provided some excellent ideas to prevent identity theft.

  8. KoryO says:

    I’d think twice about entrusting LifeLock with my personal info. Their CEO has had other problems besides having his identity stolen.

    http://www.phoenixnewtimes.com/2007-05-31/news/what-happened-in-vegas/full

  9. Becky says:

    I’ve been meaning to get my free report for a while now from annualcreditreport.com. It’s been about 2 years since I’ve done it. I wrote down the website (again!) so I can do that when I get home!

  10. Travis says:

    The only think LifeLock offers you that you can’t do yourself is insurance. LifeLock makes a lot of money by preying on fear.

    Another tip – Add the toll free numbers on the back of your credit cards to your cell phone directory. If your cards are stolen but phone is not you have immediate access to the numbers to call and cancel the cards.

  11. Heidi says:

    Very good advice, Trent. I agree on all counts (except, maybe the cancelling cards bit – cancelling cards, especially all at once, will negatively impact your credit scores if you care about that sort of thing).

    It is surprising how often phishing scams work – I see it all the time at my bank (they seem to especially target seniors). I second Sean and Frugal Dad’s comments: banks WILL NOT solicit you and ask for account and other personal information over the phone or online. YOU (the account owner) should initiate any contact about refinancing, credit, or anything bank account related – not the other way around.

  12. Great tips, it’s especially important during tax time – don’t want to leave all those financial folders with important account numbers and contact details lying around!!

  13. Anna says:

    As a nation we need greater safeguards on Social Security numbers. The number was never intended to be a universal ID number; yet it has grown to be that.

    Doctors’ offices, school registrars, and the like often ask for your Social Security number on their registration forms. Don’t fill it in. Usually they won’t even ask you after you’ve left that space blank. Almost always they won’t hassle you if you then explain that your SS number is private and you don’t wish to give it out. If pressed, make the person at the desk give you a comprehensive explanation of why the SSN is needed.

    The feds have done us a disservice by tying the Medicare number to the SSN. If this bothers you, on your own behalf or that of your aging parents, contact your congressperson to ask what legislation is under way to have this practice discontinued.

  14. Tom Purl says:

    Please note that while it is important to protect yourself from “outside” identity thieves, according to the Better Business Bureau, “Almost half (47 percent) of all identity theft is perpetrated by friends, neighbors, in-home employees, family members or relatives – someone known – when the victim can identify the perpetrator of data compromise.” (http://www.bbbonline.org/IDTheft/safetyQuiz.asp). Many experts estimate that only a small percentage of these crimes are actually reported when the assailant is a family member.

    So what can you do to protect yourself from unscrupulous family members who already have all of your personal information? Really, your best bet is to check your credit report on a regular basis.

    If a family member does scam you, they will probably rationalize it as “no big deal”. Of course it is a big deal, and it can hurt you and your family both financially and emotionally. Make sure that they know in *no uncertain terms* that this is unacceptable.

  15. Kat says:

    Some states allow you to put a freeze on your credit. I know California does.

    And I agree with Anna. Don’t give your SSN to any company unless it is truly needed. Health insurance providers do not need it. Also student loan companies are no longer allowed to use your SSN as your account number.

  16. ClickerTrainer says:

    As an IT professional, I think it should be a crime to have unencrypted user information on any portable device (laptop, thumb drive, etc).

  17. jtimberman says:

    Zander Insurance (zanderins.com) has a identity theft insurance program as well, and its very inexpensive, about $140 per year for a family.

  18. Christina says:

    Recently I received a letter from a major retailer stating that one of their payment card readers had been compromised and that I had used it for a debit transaction. I contacted my bank and they recommended that when using my debit card at any retailer use it as credit rather than debit so that you don’t have to enter the PIN.

    Due to the issue with the card reader at that retailer my account was debited $1900 and my card never left my possession.

  19. Melissa says:

    As someone who works in a bank, I would also like to warn people about taking this too far. Despite the numerous postings around my branch, more than half the people whom I ask for photo ID refuse to give it to me or demand to know why I need it. Hello?? We are a bank!

    Since I know 95% of the people who come to me, I don’t need their IDs but I do ask for those of people I have never seen before. It just boggles my mind when they get upset; we even had one customer snatch his check back and leave, telling us that we were “horrible people” to ask for such a thing.

    Not only is it to safeguard the bank in case of check fraud (and there is A LOT of that going on lately) it is also a protection for YOU, THE CUSTOMER. If someone stole your checkbook and wrote a check out to “cash” for 5000 dollars and I DIDN’T ask for their ID, I guarantee you’d come storming in a week or month later blaming me for NOT asking. It’s one thing to be cautious about your ID, it’s quite another to be insane about it.

  20. Rob says:

    I placed a credit freeze at Equifax, TransUnion, and Experian. You can contact them directly at their websites for information on how to do this. In Rhode Island, it costs only $10 to do this ($30 total). If you want to temporarily or permanently lift the freeze (e.g. to apply for credit), it costs another $10 at each of the three firms. In order for anyone to apply for credit (including you) under your name, you will need to have your unique identifier codes handy. The codes are provided by each of the three firms. Without those codes, no one can apply for credit under your name. That’s one component of theft that can be stopped.

  21. Dee says:

    As one of the readers who emailed you over the past few days, thank you for this article.
    I’m usually so on top of these things, but I got duped by the phone call from “my bank” and gave out too much information. I feel really silly now, but hopefully everything will be ok.

  22. If you read the whole story about the Lifelock guy getting his identity stolen, the money was given to a thief by an el cheapo loan company before the credit report was pulled. NO ONE can prevent stupidity.

    I wrote about my identity being stolen at my blog
    http://www.thewisdomjournal.com/Blog/my-identity-was-stolen/

    It’s a scary thing but it made me furious. I immediately froze everything and signed up for Equifax’s credit monitoring service which also allows me to pull my credit report as much as I want, daily if I wished. I also chose to prosecute and he got 3 years probation plus had to make full restitution.

  23. K says:

    My mother passed away recently and once an obituary goes into the local newspaper and also gets picked up by Google then your mother’s maiden name becomes public knowledge and is linked to your name as “survivor of the deceased”. I contacted various places that use “mother’s maiden name” as a security question and had them add an additional question to that for security.

  24. Jessica says:

    I second the credit freeze, which just about every state allows you to do. It’s free if you can prove that you’re a id theft victim, or over 65 (might be 60) otherwise it’s $10 per credit report (per person) I do believe.

    Your credit can be unfrozen as well if you notify the bureaus in advance of when you’ll be applying for a loan or credit card.

    The credit freeze wouldn’t be a bad idea either for someone who is easily tempted to get store credit cards.

  25. Jessica says:

    @Melissa

    Usually the people who freak out on you like that are usually up to no good. I’ve worked in retail and the people who are trying to steal will become angry or upset for no reason because they want you to leave them alone, so they can steal.

  26. My Two Cents says:

    VERY good advice! A friend of mine recently applied for a credit card and was rejected; he asked for a copy of his credit report (this is a good idea to do if you get rejected for a credit card) and found out that he was victim of identity theft. Somebody had taken out a $300K mortgage in his name and was late on the payments.

  27. k12linux says:

    Melissa, I personally am *glad* when my bank makes reasonable checks like showing and ID, asking for info from my account, etc. when I am withdrawing/transferring money. When one of those irate customers complain, try to remember that there are more of us who “get it” and prefer occasional inconvenience over finding an empty bank account.

    Anna, I have to agree with you about how places ask for your SSN when they don’t need to. I work at a school and even though the student records database has a spot for SSN we never use it.

    If your insurance company uses your SSN as your ID, contact them and request a non-SSN ID. Virtually all will do it. In fact, two years after I got mine changed our insurance co. changed all of their customer’s ID from SSN to a serialized ID number.

    When I have pushed most dentist and doctors offices have acknowledged that they only want my SSN as a customer ID #. It’s a nice easy way to get a unique customer number I suppose.

    Only once have I had to say something like, “I’m sorry, but I can’t provide my SSN unless you can give me a good reason that it is needed. If you can’t assign some kind of ID without my SSN I will have to go somewhere else.” In that case the person got their manager who was happy to help.

    It can be difficult because the person you are refusing to provide an SSN to may feel you are questioning their ethics or saying you don’t trust them. (Especially if it’s someone you know personally.)

    It’s not necessarily that you don’t trust the person behind the counter. But what about all the other people who have access to your records or may have access in the future? What about the employees of the company that stores backup tapes off-site? Or the programmer who takes sample data out of the building on their network? Or the compromised Windows PC which is sending anything that looks like SSN or credit card # off to a criminal’s server somewhere?

    I know I’m not safe from identity theft but hopefully these steps and others like them make me somewhat safer than average.

  28. 1stopmom says:

    This is really good advice. I remember one time when I got an email saying it was from Ebay and I needed to update my account information or the account will be frozen. I did not realize what a mistake I made until after I entered my information and hit the enter key. I was definitely scared out of my mind when I tried to use the link again, so I could send the info to Ebay, and all I got was an error page. Luckily nothing happened but now I pay close attention to what I click on in a email.

  29. Lisa Spinelli says:

    When I was in Italy last summer I actually witnessed a young boy attempting to take the wallet out ot the back pocket of an unaware tourist. The tourist was talking on his cell phone, and had no idea of what was happening. I yelled, and the child went scooting off. I noticed the pickpocket’s friend over near a building laughing at the whole scene.

    I don’t think this happens only in Italy!

    Lisa

  30. Jan-Erik says:

    I wonder if the SSN is a big issue.
    In Sweden the SSN (os PN-Personal Number) is the main index for doing anything and anyones PN kan be obtained anonymously at the tax office.
    Identity theft fraud exist but is not extreame.
    On the other hand card purchases require either PIN-CODE or providing a national authorised ID or over the Internet the CCV-code.
    It sometimes surpises me when I visit the US that you can do card purchases without ID och PIN.
    Could this be a relevant issue why identity theft is such a big issue in the US?
    Great post as always . . . .
    Jan-Erik

  31. It’s important to have a bank that’s proactive about your account. Mine calls me, an annoying amount, if anything looks remotely suspicious. I’ve had my ‘account compromised’ and also my ebay hacked into. Both times customer service took care of it before I suffered any real consequences.

  32. Golfing Girl says:

    Make sure your relatives, especially older ones are aware of the current scams. My father gave out my personal information because a woman claimed to be a long-lost relative wanting to look me up. He verified my maiden name as well as my mother’s! He was trying to be helpful but it ended up costing me a lot of time ensuring this woman didn’t do anything with the information and we had to put out a fraud alert.

    Bottom line, it’s not just you who needs to be aware of the scams–your parents and relatives need to be aware as well.

  33. Anna says:

    Jan-Erik: Yes, in this country the SSN is a very big issue. It is one of the main access points for identity theft, which is a huge problem here.

  34. me says:

    This is a timely post I just had my amex account hijacked – with a counterfeit card!

  35. Kim says:

    Remember when you are shredding documents to call your local animal shelter to see if it can re-use the shredded paper for lining crates/pens etc ….

  36. funny enough i JUST had friendly playtime with my trusty shredder last night. a word of caution though – unless you have one of those super duper heavy duty models that can shred a block of gold, i wouldn’t advise dropping an entire checkbook in it…mine def. didn’t like it! ha ha…

    and no i didn’t try the actual case of it or anything, just an extra 1/4 inch thick set of old checks. i ended up just having to take out the binding part of it, and then split the checks in clumps of 3. for what it’s worth.

    as a side note, i also praise the idea of checking your bank accounts once a day. this way if something funky comes up, you’ll notice it!

  37. K12Linux says:

    Jan-Erik, yes, the problem is not so much that it’s not difficult to obtain someone’s SSN. The problem is, as you touched on, that so many agencies or businesses treat your SSN as if it was proof of ID. Someone signed up for phone service using only my friend’s name and SSN.

    When he disputed the bill, he had to actually *prove* that it wasn’t him who signed up. Since he was living 120 miles away this wasn’t so hard yet it still took three years to completely clean up the mess..

    The problem seems to be that the businesses who accept SSN as verification of identity are not the ones held responsible. Instead it’s the person who’s identity was stolen who has to clean up the mess.

  38. jake says:

    My house was broken into last year and they trashed the whole house. I wasn’t sure what exactly was stolen but i immediately got the service from one of the credit companies to give me constant update on my credit report.

    they text or email with the slightest change, and it worked so well I am most likely gonna renew it. Its about $100 a year, which to me isn’t bad. If you know your identity was stolen I highly suggest it.

  39. thehungrydollar.com says:

    I am a huge advocate of the shredder! Mine gets quite a workout as I shred anything that has my name on it…

  40. Working and maintaining security throughout the office. I Placed shredder next to the copier or printer, these shredder models will stop information leak before it starts.

  41. The saleman told me from whom I bought the shredder. All office shredders roll on casters for convenient sharing among offices. Every shredder model has a 10-year warranty on cutting heads and can take staples and paper clips which saves office stationary too.

  42. Living in Florida there was an urgent need of shredder in the office so I called up the saleman who told me there was No sales tax on purchases delivered out of California! 10 year warranty on cutting heads & 1 year warranty on mechanical parts (parts only)!

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