How to Prevent Identity Theft
Identity theft is a growing concern: with surprisingly little information, a thief can do lasting harm to your credit score and bank accounts. However, there are steps that you can take to both protect your personal information, as well as handle a situation of identity theft. It's important to be vigilant about your financial privacy; taking steps to protect your information now can save you hours of repairing damage down the road.
Keep your personal information personal
There are certain types of information that identity thieves specifically target:
- Social Security numbers
- account numbers
It's a matter of common sense to be careful who has access to these sorts of information, but it's also worthwhile to take steps to protect them. On the most basic level, that can mean controlling who has access to your personal information.
A mailbox can be a prime target for someone interested in obtaining your account numbers, as well as a trash can. Using a locked mailbox can help reduce the number of people with access to the bills and other sensitive paperwork you receive on a regular basis. Shredding any paperwork you throw away is a good next step. It isn't enough to just shred those documents you consider sensitive, however. Someone with time on their hands can reconstruct shredded papers. If you make a habit of shredding extra papers, like junk mail, you can make it harder to put your pages back together again. It's also important to keep paperwork like your vehicle registration and insurance forms safe. While you may keep such papers in your car, keep your car locked when you are not in it. Keeping your computer secure is equally important: keep antivirus, spyware, and firewall software up to date and only provide information online to sites and individuals you trust.
It has become somewhat common for people to write down passwords and PINs, or store them in their cell phones. This practice can endanger your personal information. If an identity thief was to get your cell phone or any written down passwords, he could breeze through the protections on your accounts meant to limit access only to you. Choose passwords that you can remember — preferably longer passwords with combinations of letters, numbers, and symbols that cannot easily be guessed.
Don't give out financial or personal information
Many identity thieves make a point of trying to get you to give them your personal information.
Phishing scams are among the most common methods: you may receive emails that look like they're from your bank or another company you do business with. These emails ask you to log in or confirm your information and typically take you to a website that looks identical to the one operated by your bank. In fact, though, it's a scam meant to collect login information in order to get access to your account.
There are scammers who also makes phone calls, claiming to be from your bank or other financial institutions, as well as scams run by text messages.
Be absolutely sure that you're connecting with the correct company before you enter personal information. Enter website addresses by hand, rather than clicking on links, and only use listed phone numbers when communicating with banks and other financial institutions.
Your protective efforts should include your medical insurance. A growing number of scams make use of unauthorized access to health insurance information to get procedures done on someone who is not insured or convince insurance companies to pay for procedures that were never performed.
Keeping an eye out for identity theft
While it's important to take steps to protect yourself against identity theft, it's also important to keep an eye out for signs that your personal information may have been compromised. Because of the increasing frequency of leaks of information on the parts of banks and other companies, it's possible for the wrong person to wind up with your information even if you do everything right.
One of the best steps you can take is to go over your credit report and bank statements on a regular basis, checking for any incorrect information. Dispute anything that is incorrect; you may even catch the first sign that someone has stolen your identity this way, which will make the matter a lot easier to clean up.
What to do if your identity is stolen
If you discover that your identity has been stolen, there are steps you need to take immediately in order to repair the damage. The first step you should take is to make a report to the local police in your area. Depending on your state, you may also be able to file a report with your state's attorney general. Because many identity thefts are not actually a local matter, you will need to file a complaint with the Federal Trade Commission, which maintains a page dedicated to identity theft.
Once you have filed reports with the appropriate authorities, you'll need to close each account that the thief had access to. Keep track of each conversation you have with the companies that hold those accounts — you'll need to contact them first by phone and then by certified letter in most cases. You should receive written notification once fraudulent charges have been removed from your accounts. If you do not receive verification, you may need to provide further proof to the company in order to have the charges erased.
You should also go through your credit report and dispute any incorrect information or fraudulent accounts opened by a thief. It can take time to do so, but waiting makes them harder to dispute. You can order a copy of your credit report from each of the three major credit reporting agencies, as well as place a freeze on your credit reports. A freeze makes it impossible for anyone to request a copy of your credit report which, in turn, means that no one (including you) can open an account in your name while the freeze is in place.
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