10 ways to avoid being the victim of identity theft

Identity theft, which involves using another person's credentials/information (name, address, phone number, web site address, personal references, social security number, birth certificate, driver's license/state ID number, credit card and bank account numbers, etc.), is one of the fastest-growing crimes in today's information-laden world. In fact, ID Theft strikes every Nation, and every person is susceptible to having his or her ID stolen. ID thieves usually use this information to access the victim's money, obtain property fraudulently in the victim's name, or distinguish the thief's own identity when committing other crimes. Untangling the mess left by the criminal can leads to years of paper-work and many thousands of dollars out of pocket.

According to statistics from the Federal Trade Commission's March 2011 report, they have received more than 790,000 complaints of consumer fraud last year, with 41% of those being ID theft. Estimates of the true number of cases are very much higher; fighti dentity theft estimates that between 12 and 15 million Americans have already been victimized, at a total cost of more than $130 billion.

Luckily, there are things that you can personally do to avoid becoming a victim or just another one of these statistics, as well as ways to minimize the damage if you do become the target of an ID thief.

NUMBER 1: Shop only secure sites

Some people think buying things online puts them at inordinate risk of identity theft--yet those same people think nothing of allowing a waiter or retail store clerk to whisk their credit card away to some back office where they could easily record the numbers and information or even make a "white card" copy of its magnetic strip. The key to safe online financial transactions is to shop only at reputable Web sites and to be sure transactions are secured with SSL encryption (which you can recognize by the little "locked" icon at the bottom corner of most Web browsers). 

One caveat emptor, [Let the buyer beware]: You want to deal with sites that use encryption so that someone can't steal your payment information as it passes across the Internet—remember that scam sites can encrypt their transactions too. So remember the basic: Buying from Amazon.com or the Microsoft Web site is safer than ordering from John Doe's Homepage (unless you know who John is and that he can be trusted).

NUMBER 2: Protect your personal information

Online And off, it's not just your credit card numbers that you need to guard diligently. In some cases, just a name is enough for an ID thief to gather much more information about you. If you have a name that's common, like John Smith, it won't be so easy, but if your name is unusual, so that you're the only one with that name in your particular city, an ID thief may be able to find out your address, phone number, and date of birth through an online "people search" service, such as Zabasearch. Then with that information, if you own your home and live in a county that puts its property records on the Web, the thief can go to that site and find out how much your home is worth, getting a good idea of whether you're a good target. Some tax districts even include a photo of your home, which may show your car sitting in the driveway with license plate number displayed. Be aware of your online presence and opt out of as many directories and databases as overly possible.

NUMBER 3: Protect PIN's and passwords

Make sure you have strong passwords for your online banking services, electronic bill-paying, and other financial accounts. Don't use easily discovered passwords such as your mother's maiden name, your social security number, or your birth date. A good password is long (at least eight characters; 14 is better) and complex, containing a mixture of upper- and lowercase alphabetic characters, numeric digits, and symbols and not containing any words found in the dictionary. PIN's are often limited to four numeric digits. If you have a choice in creating the PIN, make sure the numbers are random and not easy to guess (for example, don't use your street number , the last four digits of your SSN, or the year of your birth).

It goes without saying that you shouldn't write down your passwords and PIN's, and you should never share them with anyone else. If it's absolutely necessary to do so (for example, in an emergency situation where you need a friend to withdraw money from an ATM with your card), change the password or PIN immediately afterward.

NUMBER 4: Protect sensitive data on your computer

If you have any personal or financial information stored on your computer, use Windows EFS [Encrypting File System] or a third-party encryption program to protect it. Update your virus software regularly and use a firewall to prevent intrusions into your computer from an outside party or other unwanted guest. Keep your operating system and applications updated, especially with critical security patches. Use an anti-spyware program, I recommend Norton. Don't use file-sharing programs or visit Web sites that are more likely to contain dangerous code, such as hacker sites, porn sites or warez (pirated software) sites. Don't open attachments from people you don't trust and don't click on links in strangers' e-mail messages.

Don't put sensitive information on laptops, hand-held computers, or other portable devices unless absolutely necessary. If you need to access such data while on the go, store it on a flash drive or memory card and carry the storage device separately from the computer. Don't set your computer up to log automatically, especially portable computers.

If you sell or give away an old computer, first use an overwriting program to get rid of the information on the drive (just deleting or even formatting is not enough), and with this I recommend the program called: AxCrypt and you can find it here. Or even better, remove and destroy the hard disk by drilling a hole through it in several places, burning a hard drive does not necessarily guarantee that the information will be destroyed simply because of the alloys used to build it in the first place, and prior to the sale of the computer you need to let the new owner know that s/he needs to install another one.

NUMBER 5: Use an alternate identity for casual Web surfing

Many savvy Internet users have learned that it's smart to have multiple e-mail addresses and to use an alternate (for example, an account with a Web mail service such as Hot-mail, Yahoo, or G-mail) when you need to enter information to access a site. If you're just casually surfing and not conducting business, there's no reason to give any site your real e-mail address or even your real name, address, and other personal information. There are several web services that can give you a 'throw-away' email account, such as Hushmail.

Some sites require you to register (at no charge) to access or post to the site. And some of these sites sell the lists of registered users for marketing purposes. An identity thief can easily pose as an advertiser and buy the same list. Having several alternate identities can help you track down what sites are selling your info. For example, John might use the name John Johns when he registers on a site called John's Fishing Gear, and the name John Booker when he registers on a site called the Big Book Place, and use e-mail addresses associated with those names (jjohns@gmail.com and jbooker@hotmail.com, for example). Now when he starts getting tons of spam addressed to his jbooker account, he knows the Big Book Place is the one who sold his info.

NUMBER 6: Learn to recognize phishing scams

Phishing e-mails are a particularly insidious form of spam. It's annoying enough to have your mailbox fill up with junk mail from legitimate companies, but phishers aren't really selling anything; they're just "phishing" for your credit or debit card information or bank account numbers, or other personal information they can use.

A good example is the ever-popular "You qualify for low rates on home refinancing." The scam site isn't a mortgage company, but its Web site is set up to make you think it is. When you fill out the detailed loan application, you give the phisher a wealth of information that includes your social security number, banking information, income, employers, present and former addresses, relatives and friends' names and addresses, and much more that can be used to impersonate you successfully. And possibly go after the friends/family members that you have listed as references.

Other examples of phishing messages include those purporting to be from your bank or credit card company or a legitimate site with which you do business, such as eBay, notifying you that you must click a link to update your account information. Many even claim they're asking you to do this to prevent your account from being closed or used fraudulently. Remember to examine the links in your address bare carefully, to determine if they are actually being routed to the bank's site or where they are going. Remember that a bank already has your information on file, if you are unsure call your bank to verify the legitimacy of the email. Don't give any information out to a site the 'purports' to be from a legitimate site, especially if the address in the address bar looks suspicious.

Phishing messages can often be detected by the fact that links go to a different URL from the one that appears in the message. For example, if you hover over "www.ebay.com" in the message, you might see that the hyper-link actually takes you to www.scammersite.com/ebay. A good rule of thumb is to never respond to any e-mail message asking you to return personal information. Instead, call or write directly to the company that the message purports to be from.

NUMBER 7: Use cash or credit

There are lots of ways to pay for your purchases these days, but some are safer than others. When it comes to protecting your identity, good old-fashioned cash is still the king. Unfortunately, there's no way yet to insert a twenty dollar bill into a slot in your computer to make a purchase.

Often, you have the choice to pay for online purchases by credit card, debit card, electronic check, or direct bank account withdrawal. All of these require you to submit precious information that an ID thief would love to get hold of. None of these types of information is more or less likely to be stolen, but there are a couple of advantages to paying by credit card. First, many sites require that when you pay by credit card, you enter the security code (the three-digit number on the back of your card). This adds a layer of protection, since a fraudster who obtained your credit card number from a receipt or other source would not know this number. 

More important, if you do become a victim of credit card fraud, the law limits your liability to $50. You don't have this protection with debit cards--they work like paying cash, in that once the money's gone, it's gone for good!

Checks also contain a huge amount of information for scammers: your name, address, and phone number, and many people have their driver's license number printed on the check. As well as your bank account number, the bank's routing numbers, etc., are also printed on the check. A clever scammer can create new checks on your account and forge your signature or use direct withdrawal to take money from your account.

NUMBER 8: Get off the lists

Keeping "pre-approved" credit offers out of the hands of identity thieves by using safe mail management practices is good; stopping them from being sent to you altogether is even better. (After all, even if you use a PO box or locked mailbox, it's possible for a dishonest postal employee to intercept them.) You can contact the three major credit reporting bureaus (Experian, Equifax, and Trans Union) individually to have your name removed from their marketing lists. Or call 888-5OPTOUT (888-567-8688). This won't stop all the offers, but it will greatly reduce the number of offers that you receive.

NUMBER 9: Check your credit report

Identity theft can go undetected for a long time. Someone's out there, using your name and social security number to open credit accounts or apply for loans, but because he or she is diverting correspondence to a different address, you may not know until the collection agencies start hunting you down. By that time, thousands of dollars in charges may have accumulated. One way to keep an eye on what's going on with your account is to check your credit report regularly.

New federal laws require that the credit bureaus provide you with one free credit report each year. You can space them out, getting one from Experian in the spring, one from Trans Union in the summer, and one from Equifax in the fall, for example, to better monitor your credit activity without paying extra. Look for inquiries or new accounts you didn't authorize. The sooner you find out you're an ID theft victim, the easier it will be to repair the damage. You can also order free reports through Annual Credit Report.com.

NUMBER 10: Report identity theft attempts

If you're a victim of ID theft, report it to your local police department. You may need a copy of the police report to submit to creditors as proof that you were a crime victim. Contact the fraud departments of the three credit bureaus and put a fraud alert on your account; this will require creditors to contact you before opening a new account in your name or making changes to your existing accounts (such as sending your bank statements to a new address). Close the accounts that have been compromised.

AND File a complaint with the Federal Trade Commission (FTC) to go into their database, which is used by law enforcement agencies in investigating ID theft. You can file this report here.

REMEMBER: Always error on the side of Caution, to reduce the chances of becoming 'just another victim of ID Theft.

-Birdy