If you have a clean criminal background and a good credit history, you want to keep it that way. Meanwhile, criminals aim to steal your identity, use it to get credit cards, swindle the IRS out of tax refunds, and let you handle the consequences.
Dealing with identity theft is costly and time-consuming. According to TransUnion.com, the average identity theft victim spends an roughly $500 and 30 hours trying to resolve the crime.
Keep Your Friends Close
One study found that 32% of victims had their identity stolen by a relative and 18% had theirs stolen by a friend, neighbor, or in-home relative. Watch the people who are close to you.
Limit Social Network Sharing
An identity thief may easily find the answers to security questions on your social networking profiles. For example, you may have shared any of these: your mother’s maiden name, the city you were born in, your favorite movie, etc.
When you choose security questions, think about whether you’ve posted the answer on the internet such as a Facebook or LinkedIn profile.
Review your social networking profiles, and remove the answers to security questions you’ve already chosen.
Sharing Info Via Email and Phone
Never give personal information to individuals or companies who contact you via email or telephone. Don’t reply to the company using any of the contact information provided in the email, and do NOT click on any of the links. Additionally, don’t give out personal information over the phone to companies who call you.
I used to receive daily emails that seemed to be from Paypal. I knew they were fraudulent. If I were ever legitimately concerned that my PayPal account was locked or compromised, I’d visit the site directly by typing “PayPal.com” into the address bar of my web browser.
Shred Important Documents
Invest in a shredder that cross-cuts documents. Shred every document that has your personal information on it.
Check to see if any of your local public services offers shredding services. My county offers a free, secure paper shredding service to residents once a month. The service is provided through the county’s trash and recycling center.
Stop Credit Card Offers
Credit card offers put you at risk of identity theft. For example, a thief could steal offers from your mailbox, apply for the card, and intercept the card when it comes.
You can opt out of pre-screened credit and insurance offers by calling 1-888-5-OPTOUT or visiting OptOutPrescreen.com.
Cancel Compromised Accounts
You need to be able to report and replace lost credit cards and other personal items as quickly as possible. However, it’s hard to do this since the information you need is on the stolen items.
Make a copy of the front and back of each item in your wallet and store the copies in a secure location, like a safe deposit box. Then, use copies to help contact your credit card issuers, etc. to cancel your account before thieves can do much damage.
Freeze Your Credit Report
You can keep thieves from opening any account that requires a credit check by placing a freeze on your Experian, Equifax, and TransUnion credit reports. The freeze can only be removed, e.g. when you need to apply for credit, when you provide a PIN (personal identification number) that you’ve selected.
If you’ve already been a victim of identity theft, the credit freeze is free. Otherwise, the price of a credit freeze varies by state.
Monitor Your Credit
Monitor your credit to catch identity theft before it gets too serious. Manually monitor your credit report (for free) through AnnualCreditReport.com.
Request and review a copy of your credit report from one of the three major credit bureaus every four months (instead of all at once). For instance, order Experian in January, Equifax in May, and TransUnion in September.
Or, sign up for Credit Karma Credit Monitoring for free. You don’t need to provide your credit card information to register for a Credit Karma account.
Credit Karma’s credit monitoring service watches your TransUnion credit report and sends an email if there are significant changes to your TransUnion credit report.
They say “An ounce of prevention is worth a pound of cure.” Spending just a little time preventing identity theft will keep you from spending hundreds of dollars and dozens of hours clearing your name.