July 19, 2010
With identity theft on the rise, there is no shortage of outfits offering products or services claiming to help you keep your information safe. The editors of Consumer Reports Money Adviser (CRMA) say you don't need really need these things. In fact, CRMA's experts say most of these products are unnecessary or ineffective, or they duplicate things you can do yourself -- for free.
The experts at CRMA offer the following steps on how to protect yourself from identity theft:
Get serious, not scared. Don't let the horror stories freak you out. The worst-case scenario -- when someone opens new credit card accounts or commits other crimes using your name, Social Security number or other information -- is relatively uncommon. That nightmare happened to less than one percent of all U.S. households in 2005, the most recent year for which data are available.
The most common form of ID theft is old-fashioned credit card fraud and check-kiting, with someone fraudulently accessing your credit-or-debit card account. It affects about four percent of households. In most cases, your liability is legally limited, and credit-card issuers or banks pay the direct losses, not you. Most victims suffered no out-of-pocket costs last year. But you can protect yourself by taking these low-tech, common sense precautions:
Never give your Social Security number or other information to strangers who call, text, or send e-mail messages to you even if they sound legitimate. And don't write your Social Security number on checks (except those that you send to the IRS), noncredit applications, or other forms.
Don't post your date of birth, mother's maiden name, first pet's name, or other personal information on websites like Facebook, Flickr, Friendster, LinkedIn, MySpace, or Twitter. They're often used to verify your identity and could allow an imposter electronic access to your accounts.
Place security freezes and fraud alerts. You can shut out ID thieves before they cause damage by placing a security freeze on your credit reports at all three major credit bureaus: Equifax, Experian, and TransUnion. It will prevent anyone from looking at your credit report except for the companies that already have a financial relationship with you. To sign up for one, go to each bureau's home page and look for the security-freeze link.
A security freeze is an excellent deterrent against fraud, but like all deterrents, it isn't fail-safe. Some creditors -- like payday lenders -- will give credit without getting a credit report. If you haven't placed a security freeze and you spot a sign of identity theft, put an initial fraud alert on your credit report immediately. That's fast, free and stays in place for 90 days. It also gives you additional legal protection. After that, request a security freeze.
Secure your devices. If you access the Internet on your computer, you probably already know about the need for a firewall; regularly updated anti-virus, anti-spyware, and anti-phishing software; and strong passwords with upper-and lower-case letters, numerals, and symbols like #, &, and $. But you might not think about other wide-open doors to your identity. Make sure your smart phone, iPad, other mobile devices, and portable flash drives containing personal data have security applications and encryption in case they're lost or stolen.
Stop unsolicited creditcard offers. One way crooks steal your name is by swiping pre-approved credit offers from your mailbox to open an account. They can then watch your mailbox to lift the new card you didn't know was coming. You can stop credit bureaus from selling your name to lenders by going to www.optoutprescreen.com or calling 888-567-8688.
Monitor accounts often. You don't have to wait for your monthly credit-card or checking account statement to look for suspicious activity, if you're especially concerned. For added protection, sign up for online access to your accounts and check them regularly, even daily. And don't assume that the paper checks listed are legit. Crooks can tap into your funds using fabricated checks with a fictitious name, address, and bank -- as long as they use your real account number.
Monitor your telephone bills (landline and cellular) to find any unauthorized "cramming" charges for phony services and purchases. As cell phones increasingly become mobile payment devices, fraudulent charges are showing up there, too.