How to Protect Finances from Identity Theft
Content Updated on September 25, 2007
My husband and I are familiar with identity theft because it happened to us. Somebody opened a telephone account in my husband's name and charged up over $800 in long distance phone calls and fees. Fortunately, it wasn't difficult for us to clear his name, but the experience was a wake-up call.
The things you need to do to avoid identity theft can make you long for the days of using just cash and bartering. Certainly, cash and bartering are effective ways to do your transactions and avoid leaving a paper trail, but most of us will end up using credit or bank accounts eventually. But even if you don't, somebody else might open up an account in your name, anyhow, so you still need to protect yourself.
Pay Attention to Your Account Statements and Receipts
Whenever you get a bill, bank statement, receipt, etc. check every entry to make sure that you were responsible for it. If you see anything suspicious, report it immediately.
Immediately take notice if you get any statements or receipts for accounts that don't belong to you.
When you get your receipt after making a purchase, don't just shove it in your wallet or bag. Look at it to make sure that it is your receipt, and that everything has been charged correctly.
Check Your Credit Report
You should do this at least once per year (which is free and easy to do). Better yet, do it twice per year. If your identity has already been stolen, you may need to do it four times per year or even every month.
Go to https://www.annualcreditreport.com and get your credit report from each of the credit bureaus (each one has a different report). Look the reports over carefully for anything suspicious or even just mistakes that need corrections.
Get Notified about Changes to Your Credit Report
For a fee, you can order a service that will let you know every time somebody (including you) tries to open a new credit account that is reported to the credit bureau.
Guard Your Social Security Number
DON'T CARRY YOUR SOCIAL SECURITY CARD in your wallet. Keep it in a safe or security deposit box and memorize your number instead.
Lots of applications require your social security number. Sometimes it is necessary (e.g. job applications, credit applications, taxes, etc.), which is why thieves love getting a hold of a social security number. But many times it's not required. On applications that ask for your social security number, leave the field blank or write PRIVATE in the space. If you are told that you absolutely must provide your social security number, ask why it is necessary and how it will be used. Then use your own judgment to decide if you should give it to them.
Just because somebody says, "We have to have it for our records," doesn't mean that it's true. Many organizations, such as schools, use the number like an identification number, but you can request an alternate identification number instead. Even insurance companies that ask for your number just to give you a quote, don't need it to look up your credit report because your name and address are often enough for them to get the records they need. I've used many schools, doctor offices, dentists, and insurance companies that insisted that they must have my number, but when I asked why and refused to give them my number if they didn't have a good reason, they often let me use their service anyhow.
NEVER WRITE YOUR SOCIAL SECURITY NUMBER ON CHECKS, RECEIPTS, OR BILLS.
NEVER GIVE A SOCIAL SECURITY NUMBER TO SOMEBODY WHO CONTACTS YOU FIRST without researching them thoroughly and ensuring they can be trusted. This includes door-to-door sales people, anyone who calls you on the phone, and even anyone who sends you an email or paper mail. If a company contacts you (by phone, email, mail, or in person) and says that they need your information to verify who you are because they think somebody might have misused your account, don't give them any information. Hang up and call back the customer service number on the statements, or contact them via the company's website, and then verify the information. Since you contacted that company, you'll know that the person you are talking to is actually with the company and not somebody trying to trick you into giving them your information.
NEVER GIVE YOUR SOCIAL SECURITY NUMBER TO A CHARITY. Charities don't need your social security number unless they are hiring you as an employee or contractor (and if you're a contractor, be sure to get an EIN instead for such business transactions). If you're just donating to a charity or volunteering, you DO NOT need to give them your social security number.
Guard Your PIN Numbers and Passwords
Never use an obvious pin number (e.g. anything to do with your birth date, address, phone number, social security number, etc.). The best thing to do is to pick a bunch of totally random numbers.
The same goes for passwords. Don't use any word that is connected to you (e.g. names of family members, pets, or friends; favorite sports or hobbies; professions; nicknames; etc.). The best passwords are a jumble of random uppercase letters, lowercase letters, numbers, and symbols. To help you remember it, you can make up a sentence that you can easily remember and use the first letter of every word (e.g. My dog weighs fifty two pounds = mdwftp or mdw52p or mdw52lbs). If you must use a word, then use something that has nothing to do with you (e.g. using the password surfing when you have no interest in surfing).
Don't let anyone see you enter a PIN number or password. Use your body to cover up your hands as you enter the code. If you say them aloud, make sure others can't hear you.
Don't write down your passwords and carry them with you. Instead, try to memorize them. If you must write them down, keep them in a locked safe.
Be Careful with Your Mother's Maiden Name
Many financial companies will ask just for your name, address, birth date, and mother's maiden name to verify who you are. So avoid sharing your mother's maiden name, if you use it on your account.
A better way to verify who you are is to put a security password on the account. Choose a password that other's wouldn't be able to figure out easily, something that has nothing to do with your life, or make up a nonsense word.
Shred Every Document You Throw Out
Anything with your name, address, phone number, birth date, employment information, social security number (even partial numbers), family information, medical information, bank name, bank account number (even partial numbers), credit card number (even partial numbers), etc. needs to be shredded before you throw it in the recycling bin or trash. Tearing it up into a dozen pieces isn't enough. It must be shredded, so invest in a good paper shredder.
You also need to destroy old cards, so make sure that you're shredder can also shred credit cards.
Erase and Wipe Any Hard Disks or Other Computer Media You Throw Out
This is like shredding electronic documents.
Flash cards, hard disks, floppy disks, CDs, DVDs, etc. that contain your information need to be erased and then wiped. Just erasing the media isn't enough because the information can still be recovered. You must wipe the media as well. You can download free programs that will wipe them for you.
If you can't erase it, such as with CDs or DVDs that aren't rewritable, then destroy them by smashing them up, or buy a shredder that can shred them.
Get an Unlisted Phone Number
Call your telephone company and pay the extra money to get taken out of the phone directory. Likewise, go online and remove yourself from any online directory that gives your address and/or phone number.
Don't Put Your Name on Your House, Car, etc.
Thieves can see that John Smith lives at 123 Main Street, because Mr. Smith put up a plaque under his address that reads The Smith's and has a license plate that reads John. Plus, they can see by the quality of your house or car what type of income you might have.
Remove Your Name from Credit and Insurance Mailings
Go to https://www.optoutprescreen.com and opt-out of prescreening of your credit report. Financial companies, like banks, credit card companies, and insurance companies, prescreen your credit report then send you advertisements and invitations to use their services. Sometimes, they even send you pre-approved notices, which only require a phone call to activate the service in your name. The problem is that they send these solicitations through the mail, and if that mail is stolen before it gets to you, thieves will have the opportunity to open fraudulent accounts in your name. By opting-out of credit prescreening, you reduce the number of solicitations that are sent to you, which means there will be fewer opportunities for thieves to open such accounts.
If you are looking for a new credit card, bank, insurance company, etc., it's better to research them online anyhow.
Do Your Bills and Other Finances Online or in Person
The safest way to do transactions is in person. If that isn't convenient for you, then do as much as you can online.
Online transactions are often safer than mail transactions. If your financial mail, like bills or bank account statements, come through the mail, they could fall into the hands of thieves who steal mail. When doing online transactions, though be sure that you do transactions only via secure sites (which have https instead of http at the beginning of the URL). Never do transactions through email or unsecured sites. Also, always use your credit card for buying things or making payments, never your debit card (the card used to take money out of your checking or savings account). If you want to pay bills from your bank account, sign up for the bill paying feature on your bank's website. Don't give out your bank account number.
Fax machines are not a safe way to do transactions. You never know who is picking up the fax at the other end.
Use a Mail Box at the Post Office
Thieves who steal mail often steal it right out of the mail box. If you have a mailbox in front of your house that doesn't lock, don't use it. If you have a locking mail box, make sure it's sturdy enough withstand a crowbar.
If you must send financial information via the mail, drop it in the mail box at the post office (not on the street corner or even the mail box in front of your house). The box inside the post office is even safer than the one outside (the one you drive up to). And consider getting a PO Box where you can pick up your mail rather than having it delivered to your neighborhood or house mailbox.
Don't Leave Mail in Your Mailbox
The longer your mail is in your mailbox, the more time thieves have to steal it. Pick it up promptly every day. If you'll be going on vacation, have the post office hold your mail until you get back, or have a neighbor pick it up for you.
Contact the Post Office if Your Mail Suddenly Stops
Some thieves will fill out a change of address card, so your mail will stop going to your address and start being delivered to a new address. Once they get your mail, they can easily get all of your information.
Also take notice if an expected bill doesn't show up. Contact the company to verify that they sent it to your address. Thieves may change the mailing address on accounts
Hang On to Your Wallet
If you're at the store, keep your purse or wallet either on you or next to you at all times. Make sure you have one hand on it and/or can see it if somebody else is standing next to you. (A friend of mine had her purse stolen right from under her nose by a nice old woman who asked if she knew where the eggs were. My friend answered her question, went back to shopping, and within a few minutes realized that her purse was gone. The nice old woman thief got away, along with the purse.)
If you're at work, either lock up your purse in a locker or locking desk drawer, have it right next to you at all times, or keep your wallet in your pocket. Even if customers don't come into your office, you never know if coworkers, maintenance staff, etc. might take it.
Don't Carry Too Many Credit or Debit Cards
You only need one credit card and/or one debit card. If you also have a business credit card, you can carry that as well, but make sure that your company will be responsible for the bill.
Don't Carry Unnecessary Identification
If you're not traveling to a foreign country, don't carry you passport. If you don't need your birth certificate right now, don't carry it with you. If you don't need your social security card right now, don't carry it with you. And so forth.
Sign Your Cards Immediately and Write SEE ID on Your Card
Sign your cards immediately. Without a signature, thieves can just write their own signature on the card, so when the cashier compares the signature on the receipt to the signature on the card, they'll easily match. By signing your card, thieves will have to try to match your handwriting.
By writing SEE ID on the back of your card next to your signature, it will remind cashiers to check your identification before allowing you to make the purchase.
Always thank cashiers for checking your ID.
Get Credit Cards, Debit Cards, and Business Cards with Your Photo
You can write See ID on the back of your credit and debit cards, but I've learned from experience that many cashiers don't check the ID. A better thing to do is to get cards that have your photo on them. If somebody does steal your card, they'll only be able to use it if they look similar to you or are doing online purchases.
Business cards can sometimes be used as a form of ID (even though it's not legal), so they too should have your photo on them.
Cover Up Your Cards
When you're standing in line at the store, waiting for your turn, don't take out your card for everyone to see. Wait until you're ready to pay, or at least, cover up the card number with your hand.
Report Lost or Stolen Cards and Checks Immediately
Even if you just lost it somewhere in your house or car and suspect that it will turn up in a day or two, report it. (Some thieves will steal these items right out of your wallet and leave everything else alone, making you think that you just misplaced it.) Financial companies can get you a new set of checks or a new card in just days, or even over night if you need it faster. Drivers' licenses and other forms of identification can take a bit longer.
Trust Your Feelings
If you get a feeling that something's not right, go with it. Even if you fear that you'll look foolish or rude, follow your feelings whenever you feel like something's wrong.
...by Feed