Avoiding Disaster: Identity Theft

As any former victim will tell you: Hopefully, it'll never happen to you. Identity theft is much more than simply having your wallet and pocket money stolen. This crime often damages your credit report, requires many hours over a long period of time to correct, and has a long-term negative effect on your overall peace of mind.

What's extra frustrating is that, often, victims don't find out about it until most of the damage is done. One day you're applying for a store credit card and are unexpectedly denied. Or perhaps you receive a threatening letter from a collections agency. In extreme cases, you could be pulled over for a minor traffic violation only to find out there's a warrant out for your arrest!

In all of the above cases, the explanation is the same: identity theft. Here are some of the ways it happens, coupled with preventive advice from the professionals at our consumer credit counseling service (CCCS) agency:

Situation: Your purse or wallet is stolen. It contained your Social Security card and other vital information such as PINs, passwords, and account numbers.

Our CCCS Agency's Advice: It may be tough to completely avoid falling victim to street criminals. But, at a minimum, you should make sure to never carry your Social Security card in your wallet. Keep this card and number at home in a safe, locked place. Similarly protect your passwords, PINs, and account numbers. And, avoid carrying checkbooks unless you know you’re going to need to write a check. Even then, you can carry a single check instead of the entire book.

Another great idea is to write "See I.D." with a permanent marker on your credit cards instead of signing them. While this will not prevent online purchases by a criminal in possession of your card, it will at least help avoid in-person retail purchases.

Situation: You receive an email notifying you of an account issue at your major credit card company. The email asks you to click on a link to visit the credit card company's web site to "fix" the problem.

Our CCCS Agency's Advice: While the email appears legitimate, and may sound genuine, these sorts of scams have become commonplace on the Internet. Usually, if you click, you'll be taken to a copycat web site that asks you to login (which gives criminals your password) and/or enter your account information. It's also possible that visiting the site itself could put your computer at risk of picking up nasty spyware programs that attempt to glean information from your computer or from your keystrokes.

The best defense against these scams is awareness. Next to that, it's recommended to have a firewall in place, as well as up-to-date anti-virus and anti-spyware software running on your computer.

Another great online tip is to make sure your passwords are sufficiently complicated. Don't use your child's name, your dog's name, your birthday, or any part of your Social Security number. Instead, use a mixture of letters and numbers.

Finally, make sure you're on a secure connection anytime you make an online purchase. And, make your purchases only through trustworthy sites that can be verified through the Better Business Bureau (BBB) or a similar organization.

Situation: You clean out your office each spring, tossing out old bills, tax returns, credit card statements, bank statements, and other financial paperwork. It feels great to have a nice clean office again! On trash night, you put the trash out to the curb and forget about it.

Our CCCS Agency's Advice: The problem is that identity thieves do not forget about trash night. "Dumpster diving," as it's called, is another method used by identity thieves. Your trash could be their gold mine. Shredding or tearing up important papers may help.

Situation: You pay your bills one night, carefully writing out each check and happy that you're sending them off well before the due dates. When it's time to mail them, you place the stack in your mailbox and raise the flag for the postal carrier.

Our CCCS Agency's Advice: While it's admirable that you're paying your bills on time, mailing your checks in this fashion is a risk. Some identity thieves look for mail to steal in hopes of scoring valuable financial information. Anything that might contain personal information or account numbers can be put to fraudulent use by a criminal. Instead, pay your bills online, use a locked post box or send your mail at a mailbox or postal facility. Since this advice also applies to incoming mail, consider using a locking mailbox if possible.

Situation: You receive a courtesy call one night from your bank. While this is not uncommon for, say, credit card companies, this caller asks you for account numbers or other information the bank should already know.

Our CCCS Agency's Advice: Of course, this scam doesn't always involve a bank. The caller could be pretending to be from a store, a credit card company, a charity, or even a prize headquarters with "great news." The trick is determining legitimacy. No one who calls you should ever ask for your personal financial information (account numbers, credit card numbers, etc.).

(Even if it's a charity asking for a donation, you shouldn't offer your credit card information. Instead, look up the number and contact the charity yourself if you want to make a donation.)

Situation: You have no need to review your bank statements, as you've got a fair idea of your balance at any given time and are not at risk of overdrawing your account.

Our CCCS Agency's Advice: Although you're able to mentally keep track of your bank balance, it's important to review your statements in a timely fashion. Review all charges or debits for accuracy and look into anything that seems suspicious. Even without fraud, don't forget that banks occasionally make mistakes! Reviewing your statements is a good habit to get into.

Situation: You've done all you can to avoid identity theft, yet someone in your household has been affected.

Our CCCS Agency's Advice: Part of your defense against this crime is sharing your knowledge with your family, especially your children who may not yet be familiar with a number of the scams listed above.

It's virtually impossible to avoid identity theft all together. After all, credit cards, photo IDs, and account numbers are part of our everyday financial transactions. But reducing your exposure to these crimes makes good solid sense. An ounce of prevention, as they say, is worth a pound of cure.

For further advice, or if you feel you may have been victimized by an identity thief, don't hesitate to contact us here at our consumer credit counseling service (CCCS) agency for assistance. We're highly familiar with the problem and know the steps necessary to put you back on the right financial path.