Protect Yourself Against Identity Theft
While there's no guaranteed way to prevent yourself from becoming a victim of identity theft, there are precautions you can take to make it more difficult for someone to steal your good name.
Safeguard your trash. It sounds far-fetched, but many criminals go through garbage for discarded paperwork. Put your trash out for collection as late as possible. Better yet, spend $30 on a paper shredder. Shred bills, statements, and even those annoying credit card offers you don't respond to.
Be skeptical when asked for personal information. Why does your cell phone provider need your mother's maiden name? It's okay to ask. Find out why they need it and how it's used.
Limit your credit. Don't open a lot of credit accounts. Reduce your exposure (and your APR) by closing your department or specialty store cards; most chain stores also accept Visa, MasterCard, and American Express. Be sure you get a letter from the issuer declaring your account closed.
Secure your social security number. Never carry it in your wallet. Very few places that ask for it really need it. For example, many states use your social security number as your driver's license number. Ask to be assigned another number.
Monitor your mailbox. If your bills stop appearing, someone might have redirected them by filing a change of address form with the post office. Be sure you recognize every purchase or phone number on your bills, and report the ones you don't.
Travel light. Don't keep credit cards in your wallet if you don't use them. If you go on vacation, remove the cards—credit, phone, library, or otherwise—you know you won't be using. Always sign the cards the moment you get them. And don't keep PINs with them.
Get your credit report annually. Equifax, Experian, and TransUnion are the major credit bureaus. In some states, you are entitled to a free copy of your credit report; in others, you may pay up to $9—but it's a small investment when it comes to your security. Report anything that doesn't match your records. The credit bureau will then send you a copy of the updated report.
Check out “disposable” credit cards. American Express and Visa have developed one-time-use credit cards that can be used for Internet shopping or vacations. The charge shows up on your regular statement.
What if you become a victim?
Identity theft is a federal offense. Call your financial institutions and report the theft as soon as possible to limit your exposure.
Contact your local office of the Postal Inspection Service if you think someone has submitted a change of address form to get your mail, or has posed as you to commit fraud through the mail. The Social Security Administration's Inspector General's office has a special hotline (800-269-0271) to report instances of identity theft.
The Federal Trade Commission (FTC) also has a special Identity Theft Hotline (1-877-ID-THEFT). Your information goes into a secure database to be shared with law enforcement agencies and private companies. The FTC also offers the ID Theft Affidavit, which you can use to alert companies where a new account was opened in your name. Not every company accepts the affidavit; the FTC's identity theft Web site, www.consumer.gov/idtheft/victim.htm, offers a list of those that do.
Depending on how widespread the identity theft was, you might also need to retain an attorney. While, ultimately, the financial institution will usually absorb the costs of unauthorized charges, you may spend years trying to regain your credit standing to simply write a check at the grocery store. A lawyer can best advise you of your course of action.
Asset management services offered through Commonwealth Financial Network, a Registered Investment Adviser. Jacob Mack offers securities through Commonwealth Financial Network, Member FINRA/SIPC.