Identity Thefts: Simple Steps to Prevent Complex Problems (Part 2 of 2)

Trying to prevent Identity Thefts? Shred it!

In the the first part of this two-part series, we took a broad look at Identity Theft and its impact to the victim.  All-in-all, theft of identity can be a real pain.  If you’re like me, the first thought I had when I started researching Identity Thefts was “how can I keep this from happening?”

Identity Thefts – Prevention Both On and Off-Line

While I can’t guarantee that there is a foolproof way to prevent Identity Thefts, the suggestions I’m about to make below should reduce the chance of it happening.  If you’d like proof that small changes an make a noticeable impact, check out this article by George Milne.  Some of these require making changes to behaviors in the physical world, and some require changes to behavior in the digital (Internet-connected) world.   Making all these changes may seem a bit extreme (and in a way, it definitely would be), but making just a few of these changes will put you in a much better position than doing nothing!

Off-line Preventative Steps:

• Non-Electronic Communications:  Personal Information should never be given over mail, phone, or in person unless you’ve initiated the contact and know the person you are addressing.   If you receive a document in the mail asking you for personal information, confirm the legitimacy of the company with the Better Business Bureau and/or visit the company’s local office to confirm the reason your information is needed.  Drop off mail at the post office or in a secure postal box (and never place outgoing mail in a personal mailbox).
• Paper Statements:  If possible, switch all utilities, financial companies, etc to use “Electronic” statements.  This prevents thieves from being able to steal your information by intercepting your mail.  Additionally, most businesses do not include any identifying information in their “electronic” statements, meaning you must log into the respective website in order to confirm any identifying information.   Shred any and all documents with account numbers, phone numbers, etc (preferrably with a “cross-cutting” shredder) before trashing them.  If you are unable to switch some accounts to electronic statements, keep a calendar of when those documents are expected to arrive in the mail and notify the company as quickly as possible if you notice a missed statement.
• Beware of Shoulder Surfers: Whether you’re at the ATM, library, airport, etc, be sure you look left and right  and be mindful of potential shoulder surfers when entering information such as PIN’s or Passwords.
• Carry the Minimum Required:  If you keep your entire life in your purse or wallet, you are a prime candidate for theft of identity if your wallet or purse is stolen.  Only carry the minimum amount of information you need. In other words, if you only need your drivers license and check card, leave the check book, passport, ssn card, and other credit cards locked up in a safe deposit box at your local bank (preferred) or at home in a fireproof/waterproof safe.
• Opt-out of Pre-Approved Credit Offers:  Not only is this great for helping prevent identity theft, it also cuts down on your physical junk mail.  Call the Direct Marketing Association’s Opt-Out number at 888-567-8688.
• Personal Checks:  Always pick these up at your local branch.  Never have these mailed to your home or business address.  If possible, include only your first initial (and not your entire first name) on your checks.

Online Preventative Steps:

• Ensure Basic Computer Security:  Before working with personal information on the Internet, ensure your personal computer meets basic security standards:
  • Antivirus (and anti-malware) software installed and running with definitions up-to-date.
  • Operating System security patches are up-to-date
  • Web browser sessions are secured (“https://” instead of “http://”).
  • I know of a few (slightly more paranoid) folks that boot to Linux from a CD in order to run financial transactions.
  • NOTE: Never access websites that require personal or login information (banks, email, airlines, etc) on shared computers (such as computer labs, or “business center” computers at hotels).
• Electronic Communications:  If you receive an email asking for personal information, print the email and make a trip to the business in person to verify the request.  Most likely you have received a Phishing email, as most reputable businesses will NEVER send you an email requesting personal or login information.
• Wi-Fi Connections:  Never access websites requiring personal or login information when connected through unsecured wireless (Wi-Fi) connections.   It is also possible to capture information via secured Wi-Fi connections and broadband cellular Internet connections, so try to limit your use of  login/personal information over these types of network connections.
• Financial Accounts:  Passwords for credit and bank accounts should be memorized and never shared with anyone.  Avoid using maiden names, birth dates, and SSN digits in your passwords.   Create complex passwords, and use a “password safe” program if you have trouble remembering them.   See my article on How to Easily Secure and Remember all your Passwords with Password Safe at eHow.

Minimize Your Exposure:

What if you take all these steps and a thief still manages to steal your identity?  Well, you definitely don’t want it to be easy for them to rack up lots of bills in your name and temporarily destroy your credit!   Here are some things that will work in your favor after the fact if your identity is stolen:

1. Place a “Security Freeze” on your Credit Reports:  All three credit reporting agencies allow you to place a “Security Freeze” on your credit report at any time.  This prevents anyone from making inquiries into your credit report, which makes it nearly impossible to obtain new credit in your name.   The charge to apply the freeze is minimal (free up to $10 depending on where you live), and you can remove (or even temporarily lift) the freeze at any time.  I would definitely recommend you do this today!
2. Get your free annual credit report:  The Fair Credit Reporting Act (FCRA) requires each of the credit reporting agencies to provide a free copy of your credit report (at your request) once every 12 months.  This allows you to periodically check the accuracy of your credit file so that discrepancies can get resolved before they’re a huge issue.  Additionally, the sooner you discover an Identity Theft, the easier it is for law enforcement agencies to investigate.   I actually check my “Free” report from each agency at different times in the year.  This allows me to take a look at the majority of my credit file every 4 months (as most lenders report credit information to more than one credit reporting agency).
3. Utilize Credit Monitoring Services:  This is basically a step-up from checking your free annual credit report.  By utilizing credit monitoring services, you’ll know when your credit file and/or credit score changes much sooner than normal.   This is also a great way to keep yourself motivated to improve your credit, as it gives you regular reminders and feedback as to how the actions you take affect your credit.  My favorite credit monitoring service is myFico.  I’ve used it in the past and love it!
4. Utilize Identity Theft Prevention Services:  I’m sure you’ve all seen LifeLock commercials, where the CEO has his social security number printed on the side of a truck.  This service (and others like it) really takes the worry out of Identity Thefts.   By paying a small yearly fee, they cover all the following:
   • Assistance in recovering all the documents (licenses, cards, etc) if your wallet/purse is stolen
   • Monitoring of criminal websites for your identity
   • Monitoring for change of address requests (as would be the case if someone was attempting to redirect your mail)
   • Automatic opt-out of pre-approved credit offers
   • Early notification when your identity is used to to apply for credit, utilities, wireless services and more
   • Free annual credit reports are ordered on your behalf
   • Lifelock Service Guarantee – Lifelock pays all expenses required to hire professionals which can restore your identity (lawyers, financial consultants, etc).

Final Thoughts:

With electronic transactions becoming increasingly prevalent, you can expect that it will be increasingly important that you take steps to safeguard your identity.  However, I hope this article has shown you that precautions should be taken both in the real world, and in the digital world.  I know it can be disheartening that there are so many ways for Theft of Identity to occur.  Yet, by making slight modifications to how we handle our personal information, we have much less chance of becoming a victim.   Additionally, with services like LifeLock, we can all breathe a little easier.

If you have any questions or need clarification on any of this, feel free to Contact Me! This process is truly easier to do than it sounds.

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Related posts:

1. Identity Thefts: Simple Steps to Prevent Complex Problems (Part 1 of 2)
2. Lost Credit Cards – Protecting Yourself!
3. GMail Enables Default HTTPS: The Good and Bad
4. TurboTax – Filing Taxes Electronically Made Simple