Identity Theft Prevention

Last year alone, more than 9.9 million Americans were victims of identity theft. If you do nothing else, take action on points 10 and 27. Those two tips provide a tremendous amount of security against fraudsters. Here is what you can do to protect yourself:

1. Do not use debit cards when shopping online. Credit cards offer better protection.

2. Do not give out your private information. Never give out your private information by phone, email or the Internet unless you know and trust the recipient AND you have initiated the contact. Do not give out your social security number in order to claim your free trip to Las Vegas. Those offers are often scams.

3. Do not write your credit card number on checks. Reference the last 4 digits only.

4. Reduce the number of cards you carry. Carry one or two credit cards and your debit card. The less cards on your person, the less risk.

5. Watch how your card is swiped. Crooks get jobs at retail establishments and restaurants in order to steal private data. They use small hand-held swiping devices to grab your card information while you aren't paying attention. That information can later be downloaded to use for online shopping sprees and/or the creation of counterfeit cards. Avoid using your debit card when dining out. You are most vulnerable at restaurants because your card is taken and swiped in the back. Credit cards offer more protection or you can pay with cash.

6. Keep low balances in your checking account. Have your paycheck electronically deposited into a savings account and then move the money to your checking account as needed. Because your savings account isn't likely associated with a debit card, keeping your money in savings is safer. Online banking allows funds to be transferred instantly from your savings to checking. Do not use overdraft protection (which effectively links your checking and savings), or you will defeat the purpose.

7. Monitor your credit for free three times per year. You can obtain a free copy of your credit report at www.annualcreditreport.com. Choose only one of the three credit reports. By choosing only one, you can monitor your credit for free three times per year, effectively staggering the three free credit reports available to you each year. 80% of credit reports contain errors, and 25% contain errors sufficient to deny consumers credit. In addition to the national law, seven states offer free credit reports (Colorado, Maine, Massachusetts, Maryland, New Jersey, Vermont, and Georgia). Pay particular attention to the inquiries listed on your credit report. Unauthorized inquiries are a clue that an identity thief is trying to open credit in your name.

8. Use unique passwords and pins. Do not use your mother's maiden name, the last 4 digits of your social security number, your middle name or your birth date. In essence, do not use any familiar information. Use a generic word and number combination, and always write your passwords and pins down on paper. Never place your passwords or pins in your wallet.

9. Keep a list of account numbers. Photocopy all of your credit cards, debit cards, bank accounts, and investments. Write the phone number to each financial establishment on the photocopy so that you can contact the company right away in the event that your accounts are used fraudulently or your information is compromised. Report lost or stolen cards immediately.

10. Shred everything. Paper shredders are cheap; identity theft is expensive. Thieves routinely rummage through trash looking for clues to your identity. Bits of information are sold to fraudsters with laptops who wait patiently until enough of the pieces of the identity puzzle fit together to be valuable. When in doubt, shred. 

11. Beware of phishing. Phishing is the abhorrent practice of luring innocent victims to websites that look legitimate through the use of authentic-looking emails. It goes like this. You receive an email from "PayPal," complete with the company's logo. It contains a notice that your account information needs to be updated. You follow the link and dutifully update your information. The email was a fake, the website is a fake, and your private financial information is now in the hands of an identity thief. Do not respond to emails from legitimate-looking companies. Call the company you do business with and provide the information over the phone to be on the safe side.

12. Examine your social security benefits statement. The Social Security Administration mails out benefit statements each year. Make sure that yours is correct. You can contact the Social Security Administration at http://www.ssa.gov/mystatement/.

13. Guard your social security number (SSN). Do not use your social security number for your driver's license number. If it is the same, have it changed. The cost is usually nominal. A social security number is the key ingredient that fraudsters need to open credit in your name. Write down your social security number when you must provide it to a legitimate establishment. If the number is written down, make sure to ask for it back and shred it at home.

14. Do not carry your social security card in your wallet. Sometimes it is necessary to carry the card, but do not carry it except on a specific day when it is absolutely necessary. Sometimes your SSN will be printed on your health insurance cards or other documents. Except when in use, leave documents or cards that contain your social security number at home.

15. Paper checks. Have paper checks delivered to a post office box, or pick them up at the bank. Having paper checks delivered to your home mailbox is not a good idea unless the box is locked.

16. Paying bills. Do not leave paid bills in your mailbox for your postal carrier to pick up or in the "outgoing" box at your office. Remember that checks can be altered and cashed by thieves. If possible, pay your bills online. The fewer statements mailed to your home, the lower your risk of becoming a victim of fraud. If you do choose to pay your bills with paper checks, place them in a USPS drop box.

17. Make sure your paper applications are shredded. When you apply for credit, some companies are careless with your private financial information. Make sure to ask that your application be shredded after it is no longer needed.

18. Accessing cash. Thieves use high tech equipment like binoculars and cameras. Shield your hand when punching in your pin number at the ATM machine. Better yet, get cash the old fashioned way—from the teller.

19. Phone cards. Be wary when inputting your pin number to make long distance phone calls on your phone card. Beware of "shoulder surfers" or thieves with binoculars. It may sound crazy, but fraudsters really are using these techniques.

20. Beware of awards. Be wary of telephone or mail solicitations that offer awards, particularly if the award distributor requests your personal or financial information.

21. Properly dispose of old computers. "Deleting" files won't do the job. You must use a cleaning program to permanently remove items from your computer before you sell or give away an unneeded computer.

22. Put a firewall on your computer. A reputable firewall is very effective at keeping your computer safe from a variety of threats. You can download a free copy of Zone Alarm at http://www.download.com/3000-2092-10039884.html Once Zone Alarm is installed, make sure to place your email servers in the trusted zone. Open Zone Alarm and choose "Firewall" on the left. Click on the "Zones" tab on the right. At the bottom click "Add" followed by "Host/Site." Type the name of your mail server (such as mail.mysite.com or smtp.comcast.net) in both the host and description fields. Click "lookup" and then "OK." After you have added all of your mail servers, click "Apply" at the bottom. Remember that your incoming and outgoing mail servers may be different and you may have different servers for different email accounts, so you may need to add several. Finally, reboot your computer. If these steps are not completed, you may be unable to send and receive emails after Zone Alarm is installed.

23. Install virus protection. A rogue virus can trigger your computer to send out your personal information. To keep this from happening, consider installing virus protection software such as Nod 32 which can be purchased at http://www.eset.com/

24. Secure your mail. Consider receiving your mail at a post office box. Mail left in an unsecured mail box is at risk.

25. Get a safe. Consider storing your important documents—such as cancelled checks, passports, birth certificates and social security cards—in a locking cabinet or a safe. If anyone other than you comes into your home, you could be at risk. Cleaning people, dog sitters, repair men, and even friends of your children could have access to your sensitive information.

26. Choose your mortgage broker wisely. When you make an application for mortgage, your mortgage company possesses almost all of your sensitive personal and financial information. Many unscrupulous mortgage companies throw loan files in the garbage after they are no longer of use. Pick a reputable mortgage company and make sure to ask how they dispose of their documents.

27. Place a security freeze on your credit profile. Perhaps the best way to protect yourself from identity thieves is to place a credit freeze on your credit profile at the three major credit bureaus. Any Colorado consumer may place a security freeze on his or her credit report by making a request in writing by certified mail to any credit reporting agency. A "security freeze" or "credit freeze" is a notice placed on a consumer's credit report at the request of the consumer that prohibits credit reporting agencies from releasing the consumer's credit information without the express consent of the consumer. The freeze is designed to prevent credit, loans, and services from being approved in the consumer's name without authorization. Once the freeze is in place, information from a consumer's credit report may not be released to a third party without prior, express authorization from the consumer. Click here to find out how to place a security freeze on your credit profile.

 

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