It’s hard to believe but identity theft has been a federal crime since the late ’90s. Slowly but surely we’re actually getting better at both preventing identity theft and dealing with it when it happens. While banks and financial institutions still take the brunt of identity theft losses, it can still be a major headache for the victim when it happens and sometimes police reports are necessary to finally resolve the issue. In spite of improved processes for dealing with identity theft, prevention is still the best medicine.
A crosscut paper shredder is still your first line of defense but, these days, more banks and financial institutions are allowing customers to opt out of paper statements all together and a few are charging for the privilege of getting a bill on paper. Paper checks are also disappearing, largely replaced by debit card transactions. All that has helped cut down on identity theft, but according to the Bureau of Justice Statistics 7 percent of Americans age 16 or older are still going to fall victim to identity theft. Here are four tips for addressing the most common forms of identity theft.
Use a Separate Account For Online Purchases
The vast majority of identity theft cases (85%) involve unauthorized use of already established accounts. To thwart the most common type of identity theft, set up a special account that you only use for online purchases, paying bills and traveling. Since we don’t have credit cards, my wife and I set up a special debit account for online purchases and keep the balance low. You can do the same thing with a prepaid credit card, shifting funds to it when you need to make a purchase. That way your big money account number remains largely uncirculated.
Freeze Your Credit Reports
If you’re not going to need credit in the next year, consider putting a freeze on your credit reports. While it won’t help stop fraudulent use of your current accounts, it does stop anyone, including you, from opening up new credit in your name. While unauthorized use of an existing account is more common, those who have credit accounts opened in their name are more likely to experience credit and financial problems.
Keep a Tight Rein On Your Social Security Number
Despite what the receptionist at your doctor’s office might try to tell you, they don’t need your social security number unless they’re putting you on the payroll. The cable company definitely doesn’t need it and neither does the electric company. I have had doctor’s offices lie to me about needing my social security number, one went so far as to threaten to withhold care. According to this study 272 million people had medical information stolen in 2012. The doctor’s office and hospital are the last places you want having your social security number. The bank needs it, your investment broker and employers need it, but even a potential employer doesn’t need it until they’re ready to make a job offer. Don’t carry your social security card in your wallet and demand a detailed explanation from anyone who says they need it. Giving out your social security number is one place it’s okay to play hardball.
Monitor Your Accounts and Credit Report
In the Internet age, it’s pretty easy to check your accounts daily for any fraudulent activity and you’re due a free copy of your credit report every year from AnnualCreditReport.com. You can pay for a service to monitor your credit for you, but the process literally takes five minutes to do it yourself. Vigilance is the best way to stop a minor problem before it turns into a major issue.
Identity theft is a classic example of outrunning the bear. You don’t have to have a bulletproof system to protect your identity; you just need to be a harder target than 90 percent of your neighbors. Sadly, that’s all too easy these days, which is puzzling but not surprising.