Tips to Help Protect Your Identity

As our lives increasingly move online, it is important to know the basics of preventing identity theft. Here are some answers to frequently asked questions to help you protect your identity.

What is identity theft?

Identity theft is a crime where a thief uses an individual's personal information, such as their social security number, credit card information, driver's license number - or sometimes just their name -- and uses it to commit fraud or other crimes. It is a serious and growing problem, as more large institutions compile huge electronic databases of personal information that are vulnerable to the intrusion of hackers.

While high-tech electronic theft is clearly on the rise, identities continue to be stolen the old fashioned way as well--by looking over your shoulder while punching in ATM codes, stealing credit card statements, etc. Keep reading for tips on how to protect your identity.

What can thieves do with my identity, and what are the effects on me personally?

If a thief gains access to your personal information, they can commit fraud by using your name to:

• Open and/or run up credit card bills.
• open phone accounts or utilities services.
• Write counterfeit checks or open accounts in your name and write bad checks.
• Get government benefits or file false tax returns.
• Rent a house or get a job.
• Give your information to police when they commit a crime.

The possibilities are endless, which is exactly why criminals are so eager to get their hands on your personal information.

Identity theft can sometimes be taken care of quickly by just cancelling a credit card (e.g., you leave a credit card in a gas pump and the person after you uses it). In other cases, however, people will spend hundreds or even thousands of dollars trying to repair damage done to their credit. What is worse, even seemingly innocuous thefts can leave people feeling vulnerable and in a state of constant concern.

In addition to the vulnerability of being defrauded, victims of identity theft sometimes have to deal with unresponsive credit bureaus, angry businesses and financial insitutions, and, in some cases, hostile police forces who may not believe that the victim has truly experienced identity theft. This long, drawn out process leaves many people feeling victimized twice.

To avoid the situation as best you can, it is important to know how criminals may try to steal your personal information, and the practical ways you can protect your identity.

How can criminals steal my identity?

Identity thieves employ a wide array of tactics--some sophisticated, others decidedly low-tech--to get to your personal information. Methods criminals use include:

• Phishing--an online method where thieves pretend to be reputable companies or banks and send you messages or use pop-up messages to get you to reveal your information.
• Dumpster diving for bills, receipts, or anything with your personal information.
• Stealing wallets, purses, mail, credit offers, or tax information.
• Using change of address forms to divert your mail.
• Using telemarketing scams or pretending to be a bank, credit card company, or insurance provider so that you feel comfortable giving them information.
• Skimming--using an authentic looking ATM or credit card terminal to scan your credit card information.
• There are many cases where people you know abuse your trust by storing your personal information for personal use or revenge (e.g., former significant others, friends, co-workers).
• There are also commercial websites which publish and sell social security numbers. In recent years, information brokers have curtailed such sales, but there are still some who do such business. Some states have laws prohibiting the practice, and the federal government currently has introduced a bill aimed at curbing the practice (Protecting the Privacy of Social Security Numbers Act of 2009, H.R. 122), but it has yet to pass into law.

This is not an exhaustive list, but does give you an idea of the scope of criminals' operations. Your personal information is like gold and there will always be a criminal element trying to gain access to it.

How can I protect myself against identity theft?

Of paramount concern, of course, is zealously guarding your private information. For example, you should keep all of your paper records (e.g., your social security card, bills and bank statements) in a safe place at home and not carry them with you. The following is a list of basic tips to help protect yourself against identity thieves.

• Make your passwords difficult for a human or machine to guess (use numbers as well as capital and lower case letters – even symbols) and change them frequently. Do not write them down or leave them on a personal computer. It is difficult to remember many passwords, so consider using easy to remember acronyms. For example, for a bank account password, you might say, "This is my Bank on the Corner of 8th Street." The password would then be TimBotCo8S. You can make the password longer or shorter according to your preference.
• Don't use the same password for all your accounts. For example, your financial accounts passwords should not be the same as your email account, and especially not the same as your password for a trivial account like an online newspaper.
• Always be diligent about checking your credit card statements, bank account statements, and any government statements to monitor for irregular activity.
• Use only your first and middle initials and last name on preprinted checks and consider having them routed to a post office box.
• On the "for" line on checks, don't write the entire account number, only the last four digits.
• Try to avoid stand-alone ATMs that aren't affiliated with a bank or are not attached to a building surface. Criminals have been known to use skimming techniques (scanning your card and PIN information) by replacing stand alone machines with their own.
• Shred all your bills and credit offers before throwing them out.
• Beware of telemarketers asking for your social security number, and be wary of giving your personal information over the phone.
• Monitor your credit report and any posted credit activity (see below for information on credit bureaus).