by Bill Hardekopf
As consumers take steps in this new year to get their finances in order,
they should also take the necessary precautions to protect themselves from
identity theft. Over 11.6 million people were victims of identity theft in 2011, according
to a study by Javelin Research. That equates to nearly 32,000 new victims every
day.
Headlines usually focus on hack attacks on major corporations where
millions of accounts may be compromised. But there are countless consumers who
have their credit card number stolen or are victims of fraudulent tax
returns.
Sadly, identity theft has become a common occurrence. But there are steps
you can take to protect yourself from identity theft.
- Create strong passwords. Passwords should be a combination of letters,
numbers, and characters. Use different passwords for different websites and
change your passwords regularly.
- Be aware of phishing. Phishing is a fraudulent email that appears to come
from a legitimate institutions, and typically asks for your ID and password. Do
not reply to these and do not send information about yourself.
- Switch to paperless statements. This reduces the chance of someone
getting your account information by retrieving your bills and statements from
your mailbox. With paperless statements, you will receive an email alert
whenever a new statement is available to view.
- Sign up for account alerts from your credit card issuer. You will receive
immediate alerts via email or text whenever your card is used to make large
purchases, cash withdrawals from an ATM, online purchases, or foreign
transactions. These can also notify you about the balance on your account, when
a payment is due, and when you are approaching your credit limit.
- Sign your cards as soon as they arrive.
- Keep a record of each card's account number, expiration date, and the
phone number and address of each issuer in a secure place.
- Void incorrect receipts, and shred old receipts when it is time to
dispose of them.
- Open bills promptly and reconcile accounts monthly, just as you would
your checking account.
- Report any questionable charges promptly and in writing to the card
issuer.
- Notify card companies in advance of a change in address.
- Be cautious when responding to special offers (especially through
unsolicited e-mail).
- The safest way to purchase items via the Internet is by credit card since
you can often dispute the charges if something is wrong. Make sure the site you
are using is a secure site with "https" in the url.
- When checking your account online, do not use the "automatic sign on" for
bank or credit card sites.
- Don't give your account number to anyone who sends you an email or calls
you on the phone. Be sure to verify that you are speaking with your trusted
financial institution or a reputable merchant.
- Make sure store or restaurant employees aren't skimming your credit card.
Keep an eye on your card as they swipe it for payment. The devices used for
skimming are sometimes disguised to look like cell phones. After the purchase,
check to make sure you received your credit card, not one that has been
substituted.
- If you are traveling to a foreign country or making a large purchase with
your card, notify your credit card issuer in advance so your account won't draw
attention for possible fraud.
- Cover the keypad with your hand when entering your PIN at an ATM. There
may be cameras or someone watching as you enter this information.
- Occasionally change your account number. One can change an account number
without closing the account. Also change your PIN from time to time.
- Keep your Social Security number private. According to the IRS, there
were 641,690 incidents involving identity theft tax fraud at end of fiscal year
2012, an increase of 62 percent compared to the previous year. This is when a
criminal uses your Social Security number, and fraudulently files a tax return
to steal your refund. Taxpayers don't learn of this until they file and find
that someone else claimed their refund.
Bill Hardekopf is CEO of LowCards.com, a site that simplifies the confusion
of shopping for credit cards. It is a free, independent website that helps
consumers easily compare credit cards in a variety of categories such as lowest
rates, rewards, rebates, balance transfers and lowest introductory rates. It
also gives an unbiased ranking and review for each card.
