Recovering from identity theft is difficult, even if you aren't held liable for the actual debts incurred by the thief. The cost can be prohibitive and includes clearing your credit, proving you weren't involved in the debts incurred, and restoring your reputation in the community. The best way to avoid this situation is prevention.
What Information Do You Need to Protect?
Your identifying information is consists of a basic set of data that is universally considered to accurately identify you. In the wrong hands, this information can lead to fraud or theft. For example, with just your name, birth date, Social Security number, and a few other pieces of identifying information, thieves can apply for a new credit card or auto or home loan, get a driver's license, drain your bank account, establish utility services, or rent an apartment.
Usually, a thief looks for this kind of valuable information:
- Address
- Home phone number
- Driver's license number
- Social Security number
- Credit card numbers, expiration dates, and security codes
- Bank and financial account numbers
- Mother's maiden name
To prevent identity theft, protect this prime information. Know and trust those to whom you reveal this information.
Think Twice Before You Toss It
Although protecting yourself from every possible form of identity theft may be impossible, with some common sense you can reduce your chances of becoming a victim. For example, keep your purse or wallet with you at all times, lock your doors and windows, keep your most valuable data in a lock box, and be cautious about disclosing personal information.
Thieves, however, are tricky and are willing to go to great lengths to get your personal information; therefore, it might be necessary to take additional precautions with things like your mail and garbage.
Shred Your Paperwork
Going through your trash to get your personal information is a relatively easy way for thieves to get the information they need. Thieves call this "dumpster diving," and it allows them access to get bank statements, checks, and credit card statements. They can also get medical or other types of records, which usually include your Social Security number, address, and phone number -- all the information they need to set up a new account or line of credit without your knowledge.
Today, it's common to get free credit card offers in the mail. Although most credit card companies have adopted policies that increase your security, such as requiring credit card activation from a home phone number, some companies are behind the times and represent a significant security threat if their offer lands in the wrong hands.
If you throw these offers away without shredding them first, a criminal may be able to accept the credit card in your name and change the address. You'd never receive a bill, which would ordinarily tip you off that something unusual is going on.
You can purchase a small shredding machine, which is perfect for a home or small office. Office supply stores sell these for $20 to $200, depending on the type and size. Make a habit of shredding documents as soon as you get them so you don't have heaps of high-risk documents piling up in your home.
Erase Your Computer Media
Data isn't vulnerable only when it comes into or leaves your home. If you need to throw away computer disks containing identifying information, erase them completely. If you store data on a computer you're about to sell, be sure to completely erase and reformat the hard disk before handing the computer over to the new owners.
Many victims of identity theft are unaware that anything is amiss until a thief has already done a lot of damage. Understanding what identity theft is and taking the steps to avoid it can save you time, expense, and stress.
Source: eSchool - Personal Finance
