5 Ways to Protect Yourself from Identity Theft

We’ve all heard horror stories about people who have had bank accounts hacked, credit cards stolen, or credit ruined by identity theft. Here are 5 ways to protect yourself from identity theft:

1. Use secure passwords and PIN numbers

   One way to keep your information safe is to use a secure password manager, such as 1Password, to generate strong passwords and keep track of them. We all know that we’re supposed to use complicated passwords for our online accounts, but it is still tempting to just use one or two passwords we can actually remember. Passwords should have a mixture of numbers, letters and symbols and should not use words in the dictionary or easily available information (e.g. mother’s maiden name or your birthday). A somewhat counter-intuitive, but arguably stronger and easier-to-remember approach, is to use passphrases.

2. Buy a shredder (and use it)

   Identity thieves can glean important personal information from that mountain of credit offers, bank statements and insurance correspondence you get in the mail. Invest in a good cross-cut shredder and use it to dispose of any mail that has your financial or personal information on it (including your address or birthday).  For disposing old credit cards, checks, and such without access to a shredder, our founder (Bill) recommends throwing away different parts of the cut up card in different waste streams (e.g. different fast food restaurants – no one wants to look through that garbage!).

3. Beware of Phishing Emails and Phone Calls

   Phishing” emails are spam that mimic messages from your bank or some other trusted source in an attempt to glean your password information. Frequently, these emails ask you to click on a link to login to your account. The link will take you a website that looks like your trusted source, but you’re really giving your password information to thieves. Modern web browsers try to alert you to such attacks, but be on guard. Check the http address carefully (a recent phishing attack directed me to www.ltwitter.com instead twitter.com). You can also manually enter the company’s address into the browser instead of clicking the link. This advice holds true for giving out “account verification” information when you receive a phone call from your bank. It is safest to politely hang up and call the bank’s main number yourself.

4. Monitor your Credit Report

   In our last newsletter (and in the related August blog post), we talked about how you can get your free credit report through AnnualCreditReport.com.  Checking your credit report regularly will help you catch suspicious accounts early so that you can fix the problems before they get out of hand.   In addition to accounts you haven’t opened, be on the lookout for addresses where you never lived – one common identity theft tactic is to change your address with the banks so that you don’t see statements with fraudulent transactions. Our members will recall that watching your credit report over the year is the reason we often request that you use annualcreditreport.com during your first, third, and ninth month of membership.

5. File an Initial Fraud Alert the Moment You Suspect Something

   If you suspect your data has been compromised, you can file an initial fraud alert by contacting the fraud departments of each of the big three Credit Bureaus (Experian, Equifax, Transunion).  See our adjacent blog entry (“Help!  My Evil Twin Stole my Identity!”) for more information.  A fraud alert is basically a note attached to your credit file that encourages (word choice here is on purpose – an alert is not a permanent solution, nor does it always work) creditors to contact you to confirm your identity before opening a new credit account.  An alert lasts for 90 days, after which you have to call the Bureaus again to renew it.  In serious situations, you can request a freeze on your credit report.  This means that the Bureaus will not release your credit report until they have confirmed your identity and gotten authorization over the phone. Credit freezes are not without their drawbacks, so we only advise members to use it in certain cases based on an evaluation of their individual circumstances.