Protect yourself from identity theft

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Today, thanks to e-mail and the internet, many of us are more productive, informed and connected than ever before. Unfortunately, we are now also more vulnerable to crimes such as identify theft. In fact, research by Harris Interactive from the summer of 2003 found that nearly seven million people had been victims of identity theft during the previous 12 months — up 80 percent from the year before.

Identity theft can take many forms. It typically occurs when someone uses your name and confidential information — Social Security number, date of birth and mother’s maiden name — to do something you didn’t authorize. Perpetrators may take out a loan, use your credit card, open a new credit card in your name, or withdraw money from your bank account.

A thief can obtain information by stealing your wallet, breaking into your car or home, going through your trash or illegally taking mail out of your mailbox. More sophisticated techniques include hacking into databases and Web sites, sending out fake e-mails (called “phishing”), buying Web site addresses similar to those of financial institutions, and creating computer “spyware” programs that record your keystrokes.

 

Vigilance pays
Use these steps to help protect yourself from identify theft:

  • Before giving out your date of birth, Social Security number or driver’s license number, ask why the information is needed.
  • Use a crosscut or confetti shredder to dispose of anything containing your personal information, including account statements, credit card solicitations, checks (both canceled and unused), paycheck stubs and medical records.
  • Include only the last four digits of your credit card account on checks when sending a payment.
  • If mail from a financial institution has been tampered with, consider closing the account and opening a new one.
  • If someone contacts you by phone, letter or e-mail claiming to be from your financial institution and asks you to verify your identity, don’t provide any information. Do not hit “reply.” Call the financial institution’s main number (listed on your account statement or the back of your card) to ensure that you’re speaking to an authorized representative and report the incident.
  • Scrutinize every bank, credit card or other financial statement that you receive. Make sure you can identify all of the charges or withdrawals.
  • If you have ordered a new credit card, or a replacement card for one that expires does not arrive, contact the company. Your mail may be been intercepted.
  • For computers, keep your operating system up to date, set up a firewall, and keep your virus-protection and spyware-detection programs current.
  • Consider using one credit card that has a low limit for online purchases.
  • Keep copies of your credit cards in a safe place in your house, and carry only the card you need. Cancel and then cut up credit cards you don’t use.
  • Check your credit report annually. You can get a free report from Equifax, Experian and TransUnion, the three major credit bureaus. Call (877) 322-8228 or go to www.annualcreditreport.com. Review the accounts in your name. If you don’t recognize them, contact the credit bureaus immediately.

When identity theft happens, the time spent working to recover can be extensive. A 2003 study on the aftermath of identity theft by the nonprofit Identity Theft Resource Center found that victims of identity theft spend 600 hours each recovering from the crime. That makes protecting your information a much more cost- and time-effective strategy.

 

David Chlus is a senior vice president of investments with Smith Barney, Inc., in Utica, N.Y., and a partner in a 90-cow dairy.



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