Identity theft occurs when someone obtains your personal information, such as your credit card data or Social Security number, to commit fraud or other crimes. The Federal Trade Commission estimates that 9 million Americans suffer identity theft annually. It sounds like a big number, but it isn’t.
For one, the hysteria has been stoked by much-publicized data breaches. In reality, identity theft only touches a sliver of the U.S. population each year (about 3%). One-quarter of those cases are credit-card fraud and not full-blown identity theft, according to FTC figures. The credit-card fraud occurs when a thief uses your credit card to make purchases. More serious is when someone uses your information to open accounts or take loans in your name. That’s when you’ll have to fight to get your credit restored and your name cleared, an arduous process that can take months or years to complete.
In response to concerns over identity theft, numerous companies and financial institutions have stepped in with products that monitor your credit, reimburse you for lost wages or funds and guard your identity. Some employers also now offer ID theft insurance to help you reduce the amount of time and money spent resolving the crime, so check with your company’s benefits specialist about your eligibility.
The Wall Street Journal recommends a few practical tips in an online article.
Guard your information online. These days, many of us do most of our shopping and banking on the web. With all those account numbers and passwords floating around, it’s easy for someone to nab your information and go on a spree.
• Clear your logins and passwords. This is especially important if you’ve been working on a public computer. Change logins and passwords monthly.
• Pay for online purchases with your credit card, which has better guarantees under federal law than your online payment services or your debit card.
• Be alert for phishing, a trick in which spam or pop-ups mimic legitimate banks or businesses to obtain your personal information, which they use to access your accounts. Always verify that you’re on a familiar Web site with security controls before entering personal data.
Monitor your bank and credit card statements. Check your accounts regularly so you know when something’s awry. Purchases you didn’t make should be obvious—like a gas fill-up halfway across the country.
Verify your mailing address with the post office and financial institutions. Identity bandits may fill out change of address forms so that delinquent credit notices remain off your paper billing radar.
Monitor your credit report. By law, you’re entitled to a free report every year from each of the three bureaus (Equifax, Experian, and TransUnion). Request one every four months, changing bureaus each time. You can order the report directly through each agency, or at annualcreditreport.com. Use this URL—there are hordes of knockoff sites that will try to charge you for your report and other needless services. Scan it for abnormal activity, such as accounts or credit cards you didn’t open. (And don’t fall prey to faux free credit report advertisements.)”
You can learn about other Wall Street Journal recommendations here.