Try These TEN TIPS for Identity Theft Protection

Category: Finance , Privacy

A report from Javelin Research from shows that identity fraud affects over 14 million U.S. consumers per year. Spikes have been noted in 'new account fraud' and 'account takeover fraud' -- two of the most damaging types of ID theft. In addition, a series of massive data breaches at major corporations has left consumers vulnerable to phishing and other forms of fraud. Poor password practices are a factor as well. 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.

Although the rate of identity theft cases fell slightly in the latest report, Javelin 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 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 Free Credit Reports Online explains how U.S. citizens can get three 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, in the wake of the Chase Bank breaches. A person claiming to be from Chase called my unlisted number and asked for me by name. I Googled the 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. Memorize PINs, account numbers, and passwords; do not write them down. And for heaven's sake, do not put such data on scraps of paper kept in your wallet, purse, or laptop case! See my related articles Here's Why Your Password is Hackable 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.

  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 this Consumer's Union guide to credit freezes.) You'll need to contact each credit bureau (Equifax, Experian, and Trans Union) to request the credit freeze.

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 infographic showing the major 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 TEN TIPS for Identity Theft Protection"

Posted by:

Laurie
30 Aug 2019

Many tools for monitoring and safeguarding are much easier to access now than in the past. I would expect that to improve further over time, as well.

Credit freezes used to be a hassle and an expense to place and to remove. Now, they are simple. I applied for a new credit card recently. It took all of 30 seconds or so to unfreeze my credit file with the bureau the card issuer was using. As soon as my application was complete and approved, it took another 30 seconds to freeze it again. No cost, little hassle for the benefit the freeze provides. Credit locks are similarly easy these days.

Obtaining credit file information is also easier now, as many banks, the credit bureaus themselves and other financial institutions offer free or low cost viewing of your credit files and scores. Monitoring credit scores can provide clues.

Credit monitoring services are often offered free or at discounted rates as membership perks or even as employer benefit offerings. These services can help with monitoring, but perhaps their bigger benefit is in helping clean up an identity theft disaster should one occur.

Shredding, encrypting, not responding to phone requests, not clicking on email or text links and being generally wary have become common practice for many people as awareness of fraud, scams and trickery has increased. Hopefully, these are things everyone is incorporating into their daily lives.


Posted by:

Mike
30 Aug 2019

Beware Lifelock. In 2015 they had to pay the FTC $100M for unsafe handling of customers' personal info. Credit Karma gives you similar credit check info and it's free (and probably safer).


Posted by:

Butch
30 Aug 2019

A pop-up (in bright red) told me **not** to close the window. "It's important." I closed it as I've done before. I'm wondering why this is the 2nd time this happened. Is it "AskBobRankin" or my ISP?


Posted by:

db-PHX
30 Aug 2019

Thanks for the scamming tips. In your 10 Step protection notes, consider adding another credit reporting agency which will help defeat cell phone account fraud. Service providers use another organization — the National Consumer Telecom and Utilities Exchange — and you can freeze your account at https://www.nctue.com/Consumers


Posted by:

Richard Gfeller
30 Aug 2019

I subscribed to Lifelock. I also had put freezes on the big-3 credit reporting agencies.
I applied for credit to put solar on my house. I had to unlock two of the credit agencies for the lender to check my credit. (Of course, I relocked those accounts shortly after.)
Within hours, Credit Karma and one other 'free' service notified me that my credit report had been accessed. I NEVER HEARD A BLEEPING PEEP out of LifeLock! After a couple of months, I called Lifelock to ask why they did not alert me that my credit file had been checked. I spoke with several people and no one could give me an answer. In fact, no one even attempted to apologize or try to get an answer. I CANCELLED LIFELOCK! A waste of money, Lifelock is.


Posted by:

officerripley
31 Aug 2019

Unfortunately all of the financial institutions (some large, some small/local) I deal with have stopped offering the service of my blank checks being mailed to them & picked up by me. (They explained that they hadn't gotten nearly enough of that bail-out $$ to continue that practice. Ha.)


Posted by:

ijac
01 Sep 2019

There is a fourth one also called innovis.
https://blog.smartcredit.com/2011/06/20/who-is-innovis-are-they-a-fourth-credit-bureau/


Posted by:

Rich Kaufman
05 Sep 2019

Regarding identity theft measures, for important docs, financial institution transactions, and credit card purchases, I limit my exposure by using one device. My PC is the only device I use for such transactions, and where I maintain a unique email, and access to my bank and investment accounts.
We use separate laptops and iPhones for all social media, and have different emails for those purposes. We don't search, access or save our accounts there.
For on-line purchases, which we use minimally, we use the PC and connect to the vendor directly, and not from ads or social media links.


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