Try These 10 Tips To Prevent Identity Theft

Category: Finance

Identity fraud affected over 14 million U.S. consumers in 2019, with losses totaling $16.9 billion. Spikes have been noted in 'new account fraud' and 'account takeover fraud' -- two of the most damaging types of ID theft. In addition, more than 1400 data breaches at major corporations had consumers vulnerable to phishing and other forms of fraud. I haven’t found stats for 2020 yet, but we can assume they’re equally dismal. Read on for my tips on avoiding fraud and identity theft…

Ten Ways to Protect Yourself From Identity Theft

Identity theft is one of the most traumatic non-violent crimes to which one can fall victim. When a crook uses your good name to commit fraud or robbery, the impact on your reputation, employability, and credit is severe, and can last for years. It's even possible to find yourself arrested for crimes you did not commit. So it's important to protect yourself against identity thieves.

Javelin Strategy and Research says "the resurgence of higher-impact fraud types such as new account fraud, account takeover, and misuse of non-card accounts casts a shadow over the progress made in fighting card fraud."

The telltale signs that your identity has been stolen can be subtle and may go unnoticed for months, even years. Inexplicable charges on your credit card bill may be chalked up to clerical errors. Letters from creditors you've never heard of and certainly never did business with may be ignored. But eventually, an enormous credit card bill, legal papers, or police show up at your door. You are denied a mortgage or a job. Then the real nightmare of proving "I didn't do it" begins.

Prevent Identity Theft

It can be maddeningly difficult to clear your name, costing hundreds of hours and thousands of dollars. That's why it's important to take steps NOW to make it as difficult as possible for a scammer to victimize you. Take action on these ten tips as soon as possible, and you'll tips the scales in your favor:

  1. Check your credit report on a regular basis, to see if there is any incorrect information, or accounts you don't recognize. My article FOUR Free Credit Reports Online explains how U.S. citizens can get four free credit reports per year, and avoid the credit report scammers.

  2. Shred your sensitive personal documents before throwing them away. A battery-powered cross-cut shredder can render your banking and credit card information unreadable and costs less than $30. "Dumpster diving" is a favorite, low-tech way by which ID thieves collect bank statements, credit card numbers, Social Security Numbers, and other bits of your identity from your trash.

  3. Be wary of telephone solicitors asking for personal or financial information to "verify your identity." Common scams involve someone who claims to be from your bank or credit card company, claiming that there is a problem with your account. If you did not initiate the call, hang up and call the toll-free number on your statement, then ask for the security department. This happened to me recently, where callers claiming to be from my utility company and Chase Bank called my unlisted number and asked for me by name. I Googled their number on the caller ID, and found that many others reported similar calls.

  4. Keep important documents, such as tax returns, birth certificates, social security cards, passports, life insurance policies and financial statements secure in your home. A fireproof safe is a good idea, but remember to bolt it to the floor or hide it well. Consider using encryption for your personal and financial data, in case your computer is lost or stolen. See my article Is it Time to Start Encrypting Your Files? for help getting started with encryption tools.

  5. ATM Safety: Make sure no one is looking over your shoulder when you enter your debit card's PIN at an ATM or point-of-sale terminal. I recommend the "two finger method" where you point two fingers at the ATM keypad, but only press with one. This makes it nearly impossible for someone nearby to discern your PIN while you're entering it. You should also be wary of "skimming" devices at ATMs and gas pumps, which can be used to steal your card information. See All About Skimmers to learn how to identify these devices.

  6. Do not write PINs, account numbers, and passwords on scraps of paper kept in your wallet, purse, or laptop case! A password manager will help in two ways: generating strong passwords, and automatically entering them on websites when needed. See my related articles How Hackable is Your Password? and Can This Robot Manage Your Passwords?.

  7. Get blank checks delivered to your bank branch, not to your home mailbox from which they may be stolen. On a similar note, eliminate junk mail which may contain "convenience checks" and credit card offers that can also be intercepted from your mailbox. Visit OptOut Prescreen for help eliminating these dangerous nuisances.

  8. Credit Cards: Check to see if your online banking service has a feature to notify you by phone, text, or email when you when a credit card transaction exceeding some threshold occurs. Also, when you order a new credit or debit card, mark the calendar and follow up promptly if it does not arrive within 10 business days. Ask the card issuer if a change of address request was filed, and if you didn't do it, hit the panic button.

  9. Don't give your Social Security Number to any business just because they need a "unique identifier" for you. Instead, ask if you can provide alternate proofs of identity, such as your driver's license or birth certificate. Exceptions to this rule would be employers, banks or landlords with a legitmate reason to do a credit check or withhold taxes.

  10. Consider placing Fraud Alerts with the major credit bureaus, so new accounts cannot be opened without your knowledge. Call Equifax (800-525-6285), and they will pass along the request to both Experian and Trans Union. Fraud alerts expire after 90 days, so you can repeat the process quarterly, or lock down your credit file with a Credit Freeze. A freeze is permanent and free (in most U.S. states) but it may interfere with loans applications, employment screening, signing up for utility or phone service, new insurance policies, and other transactions. See my article [ALERT] Freeze Your Credit Files Now for details on how to place fraud alerts or freeze your credit file.

There are plenty of common sense things you can do to protect against identity theft, but sometimes it's beyond the control of even the most vigilant. Data breaches perpetrated on healthcare companies, hotel chains, airlines, department stores, mobile phone providers, and social media firms are a "treasure trove" of data that could be used to commit identity theft and fraud. Here's a very interesting article detailing the 52 biggest data breaches of recent years, and what types of consumer data were affected.

What About LifeLock?

You may be considering LifeLock or a similar identity theft protection service. Although this can be helpful, no company can guarantee that identity theft will never happen. These services monitor your bank account, and look for suspicious online activity done in your name. They'll alert you if they spot any red flags and promise to help you repair the damage. But because of lawsuits filed by the credit bureaus, Lifelock can no longer place fraud alerts on your behalf.

It can be a nuisance to manage fraud alerts manually. But given the recent focus by scammers on new account fraud and account takeover fraud, a service such as LifeLock, Identity Guard or IdentityForce may still be useful. The downside is that most cost $10-$20 a month, and none of them can claim to prevent all forms of identity theft.

Do you have other tips for avoiding identity theft? Post your comment or question below...

 
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Most recent comments on "Try These 10 Tips To Prevent Identity Theft"

Posted by:

Drew Dawson
28 Jan 2021

Take a picture of any important item - note the dimensions if important to you


Posted by:

Renaud Olgiati
28 Jan 2021

I have long found it interesting that the two developped world countries most affected by Identity Theft, the USA and the UK, are also the only two developped world countries that do not have a national ID card in place for their citizens...


Posted by:

Lucy
28 Jan 2021

If I might add 2 more:

Tax Documents from Banks etc. Consider asking for them electronically instead of through the mail. The envelopes ALWAYS announce the contents.

Get your Tax Return sent in ASAP. (IMO electronically). If you are due a refund you'll get it sooner, if you owe a payment it does not have to be paid at time of sending Tax Return.


Posted by:

Bob K
28 Jan 2021

I have a problem with other people, with a name similar to mine, either thru stupidity, or maybe intentionally, hand out my email address to others. To the point, where if I search for my email address, it points to someone else.

What can I do to protect myself? I do not want to give up my email address -- it is a recovery address for many services.


Posted by:

Lucy
28 Jan 2021

Just realized it is National Privacy Day ... way to go Bob.

https://www.consumer.ftc.gov/blog/2021/01/its-national-data-privacy-day


Posted by:

Lucy
28 Jan 2021

@Bob K

Consider using Disposable email addresses. Save that main address just for recovery of those a accounts. But do keep an eye on it as you have been.

Everyone else give them a disposable to use to contact you, and you can just dump it if it is abused.

Anything sent to the disposable address will come to your same Inbox.

Bob has discussed this, just search Disposable Addresses in his search box top of page and scroll down to Bob's own results.


Posted by:

Bob K
28 Jan 2021

Lucy:

Oh, I use other email addresses for everything now. But, two addresses (one going back about 25 years) I really can't use for myself. But, they are registered to me -- I worry about identity theft. In one case, I needed to change my Staples email address since my rewards were being intermixed with another user.

And, when I try to put some business straight on the fact I am not the customer they think I am, quite often that fails.

People don't realize that if I am receiving emails intended for them, in many cases I could take over their accounts simply by clicking on a "I forgot my Password" button.


Posted by:

Warren
28 Jan 2021

I had a Paypal account hacked and an attempt on Amazon, fortunately could get the Amazon shipment stopped in time. I was "subscribed" to around 500 newsletters and advertisements from all over the world to flood my inbox and hope I would miss alerts on large purchases. Am still playing "whack a mole", unsubscribing in many different languages and plan to get more email addresses soon.


Posted by:

Jerry Owen
29 Jan 2021

Why would a landlord or potential landlord need one's SSN? Separately, so far as most business is concerned, why would they need it? It states on the SS card that it is not to be used for identification. Speaking to Warren's comment, I frequently get emails from different online games wanting me to renew my subscription. I have never played those games so someone has used my email address to subscribe to them. I hope who ever did that is disappointed when the game cancels their subscription due to non-payment.


Posted by:

Lucy
29 Jan 2021

Jerry .. not saying it is right they do so, but landlords use the SS # to check the credit history of a potential renter. It is the only identification that can be used to see that credit history with the big three. Just the renters name does not do it, have to have their SS # also.

It is getting harder and harder to refuse to give entities your SS #, but we only do so for those who actually need it.


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