The Money Question: How to Prevent Identity Theft
Q. My sister had her identity stolen and it was a huge mess to clean up. How can I make sure this never happens to me?
A. Identity theft is an enormous -- and growing -- problem. Nearly 12 million Americans were victims last year, up 13 percent from 2010. Those numbers encompass a wide range of crimes, but in each case crooks obtained someone's personal information and used it for their own profit. A stolen credit card number is a common problem, but it gets much worse than that. When I was 18 someone stole my Social Security number and used it to run up $250,000 in debt, get a driver's license and commit two felonies -- all in my name. So I know firsthand what a mess identity theft is to unravel. Taking these four steps will help protect you.1. Safeguard Your Data
Your Social Security number is your single most valuable piece of personal information and you need to protect it vigilantly. Don't carry your Social Security card (or your kids'); stash them in a safe or safety-deposit box. And if your SSN appears on other cards (it often doubles as a health-insurance ID number), keep the card separate from your wallet, which can be stolen. Never email your SSN and don't give it out just because you're asked. You do need to include it on paperwork for major financial transactions (like loan applications) and school enrollment, but it's often requested unnecessarily. When in doubt, leave the line blank.
Even without your SSN, though, identity thieves can do a lot of damage, so buy a shredder and shred any documents containing personal information -- from preapproved credit card offers to junk mail. If you have an unlocked mailbox, consider getting a P.O. box. Also, don't rush to fill out product registration cards or customer surveys; marketers use them to amass data about you, which can be stolen.2. Take Extra Care With Plastic
Any time you use a credit or debit card -- whether handing it to a waiter or keying in the number online -- there's a risk that someone could steal it. With a credit card, federal law protects you from any loss over $50. The same is essentially true of debit cards, but the onus is on you to report any unauthorized transactions. If you don't do so within two days, you could lose up to $500; if you fail to report the fraud within 60 days of the date that your bank issues your statement, you could lose all the money that was withdrawn illegally. Even if the bank reimburses you for the losses, you can face hassles with bounced checks and overdraft fees for payments you made before realizing the problem. So don't use your debit card online or at shady-looking stores -- and regularly check your bank activity online for suspicious transactions.3. Monitor Your Credit
By law you have the right to check your credit history for free once a year. Do this at Annualcreditreport.com. I recommend checking with the three credit bureaus (Experian, TransUnion and Equifax) one at a time, so you can in effect run your credit every four months at no cost. Make sure to verify not only the card numbers and debt amounts shown but also personal info like birth dates and street addresses. Inaccuracies may indicate ID theft.4. Jump On Any Problems
If you spot fraudulent charges or accounts, act immediately. First, go to each of the three credit bureaus' websites and place fraud alerts on your credit reports. This advises credit card companies and banks not to grant new credit in your name without your express consent. Second, file a local police report. Third, call the fraud department of any accounts that you didn't open or that have been tampered with. Close the accounts and explain the situation. You'll be asked to fill out a fraud affidavit and submit a copy of your police report. This helps build your case that the charges aren't yours -- since card companies won't just take your word for it. Finally, file an online complaint with the Federal Trade Commission (ftccomplaintassistant.gov). Experts there will refer you to various resources that can assist you in fully freezing your credit, proving that fraud has occurred and cleaning up the aftereffects, such as a ruined credit rating or bad driving record -- even a criminal rap sheet.
My own, admittedly extreme, case eventually involved changing my name and Social Security number, but if you catch the problem quickly, repairing the damage will be far easier.
Sheila Gordon spent nine years as a victim's advocate at the Identity Theft Resource Center, a national nonprofit, and now trains companies to protect personnel and corporate data at ID Theft Info Source.
Originally published in Ladies' Home Journal, October 2012.