Protect your ID
Identity theft is the fastest growing fraud in the United States, costing an estimated 500,000 consumers millions of dollars a year.
There are 1,000 new victims each day, with women being victimized more than men, according to the Kentucky Attorney General's office.
Identity theft occurs when someone illegally uses your personal information, such as Social Security number, driver's license, or credit-card data to assume your identity to dishonestly obtain money and goods.
How ID theft works
How many letters do you receive from credit-card companies for pre-approved cards? Most of these are thrown in the trash unshredded, permitting so-called "dumpster divers" to retrieve them and apply for a credit card, but asking that it be sent to a new address.
With your Social Security number, the thief also can apply for other credit cards in your name. Often, victims have no indication that something is amiss until collection agencies start calling or writing about delinquent payments.
Identity thieves have ways other than going through trash to get information. They often buy from Internet "hackers," purse-snatchers, mail thieves, and dishonest personnel or credit-bureau employees selling private information to the highest bidder.
For the hundreds of ID theft victims, trying to live a normal life becomes a nightmare. So, how can you protect yourself without becoming paranoid?
Robert Ellis Smith, founder and publisher of the 25-year-old Privacy Journal newsletter, suggests omitting your address from the phone book listing. This will help keep you off mailing lists and the popular "people finder" Web sites.
Consider also having two wastebaskets under your desk. When getting rid of a document containing sensitive information, rip it in two and throw each section into a different basket. Then, empty the baskets on alternate trash-pickup days.
This tactic is cheaper and less time-consuming than using a paper-shredder, he says. However, shredder sales remain quite popular. Between 1990-1999, sales skyrocketed to over $2.5 million from about $100,000, according to office-equipment maker GBC Corporation.
Simpler ways to protect your identity and privacy is to avoid sharing too much information.
Smith believes consumers are unwisely and unnecessarily registering a wide variety of personal data, such as Social Security number--which they put on Web sites--and their children's fingerprints--which they give to the police.
When it comes to handing over private information, always ask yourself what they might do with it, and whether it is absolutely necessary that they have the requested information.
Balance the necessity of the service you are being offered with the possibility the information may be sold and resold, cautions the American Institute for Economic Research.
The editors of Financial Sentinel suggest:
- Don't carry passwords or so-called PIN numbers in wallets or purses that contain credit cards or checks.
- Do not give personal information over the phone, or in the mail, unless you know with whom you are dealing.
- Don't give out personal information, such as your Social Security number, unless you know how it is going to be used. Ask if you can give some other form of identification.
- Protect your mail: empty mailboxes promptly and make sure discarded mail doesn't contain sensitive information.
- Use hard-to-decode passwords with credit card, bank, and Internet accounts.
- Pay attention to credit card billing cycles. If a bill is late, find out why: it might have been diverted to a different address.
- If identity theft happens to you, contact banks and creditors to report the fraud. Also, file a police report and contact the three major credit-reporting bureaus: Equifax, Experian, and TransUnion. You can reach the credit companies through the Internet at www.Equifax.com, www.experian.com, or www.transunion.com.