How Not to Fall Victim to Identity Theft

By Paul Cook

Identity theft is the fastest growing crime in the United States and affects millions of victims every year. CitiFinancial lost 3.9 million customer financial records and CardSystems Solutions compromised the data of nearly 40 million more consumers just a few years ago. These data losses continue to contribute to identity theft's current rank as the FTC's top consumer complaint.

Like most crimes, identity theft can be prevented. However, many consumers are unaware of the preventative measures they should take to reduce their risk of becoming a victim.

The state of identity theft
Identity thieves grow more sophisticated each day. Marketplaces that connect buyers and sellers of stolen data are adding to the efficiency and profitability of identity peddlers. The window of opportunity to use such data may be as short as a days or even hours. Perpetrators have set up elaborate schemes to accept the delivery of products purchased with stolen information. And the damages of identity theft are not limited to fraudulent purchases; the destruction of your credit and reputation can be much more painful and difficult to recover.

The basics of prevention - what you can do
Identity thieves may target victims by phone or mail. These predators may pose as employees of service providers, utilities, banks and government agencies in order to lure you into revealing your Social Security number. Never give information over the phone without confirming the legitimacy of the organization. Phishing - posing as a trusted company to elicit personal information - is the digital form of this scam. Never give out passwords, personal identification numbers, social security data or credit card numbers through email. Always go to the site or business directly to access your account.

While identity theft is largely colored as an online phenomenon, most of these crimes begin in postal mail. Good offline prevention tactics begin with the safe handling of your mail and personal documents. Have your mail delivered to a locked mailbox or post office box. When disposing of documents, particularly bank or insurance statements or bills, it's best to use a shredder. Further, you should eliminate pre-approved credit offers.

Your wallet can also provide the critical data identity thieves need. Limiting the amount of personal information you carry can mitigate damages associated with a lost or stolen wallet. Social Security cards should be kept in a secure place at home. Carry only a few checks at a time and only necessary credit cards.

Emerging tools offer proactive protection
Practicing prevention methods is a critical step in identity theft prevention, but vulnerability can be caused by factors beyond your immediate control. The recent data fumbles by major institutions, for example, have put nearly 50 million people at increased risk. And, while it's wise to keep an eye on your credit reports and bank statements for unusual activity, scanning your financial statements won't protect you from intra-month identity theft or prevent fraudulent activity.

The good news is that more sophisticated tools are emerging to detect potential fraud before it is committed. One such tool is IDWatch by Intelius, which monitors your personal and professional information in conjunction with your financial and credit profiles to detect signs of ID theft early. For example, to assume your identity fraudsters may begin by changing the billing address associated with a debit or credit card. If your name becomes associated with a new address, there is some likelihood that you are about to become a victim. Additionally, changes in address without a corresponding change in telephone number can signal pending fraud. This activity points to the consumer's need for technology that can proactively detect and assist in the prevention of identity theft.

Identity theft costs consumers more than $5 billion per year. Recovery can take a victim 2 years, and can devastate your finances and your good name. Fortunately, consumers have options that can help them prevent these losses. Just as you buckle your seatbelt, exercise and buy health insurance to protect yourself from the strain and costs of illness or injury, care for your identity. After all, it's the only one you have.

Top Ten Best Practices For Identity Theft Prevention:
1. Shred sensitive documents before throwing them away.

2. Purchase a locking mailbox or route mail to a post office box.

3. Distrust e-mail links -- instead type addresses directly into the address box.

4. Protect your computer with a firewall and anti-virus software.

5. Don't disclose social security numbers or other confidential information.

6. Download software with caution -- avoid downloads from questionable sites.

7. Create unique passwords, commit them to memory.

8. Don't open email attachments from unknown sources.

9. Don't put personal information such as your Social Security number on checks.

10. Utilize a service, like IDWatch, that proactively monitors personal, financial and credit information.

(Source: Intelius)