Identity theft probably isn’t the primary concern of most college students heading off to school this fall, however, college campuses can be big targets of identity theft.  With so many people living together in such close quarters it can be a hot spot for thieves and dishonest students to take advantage of other unsuspecting students.

If you’re going away to school for the first time or returning for another year, it’s extremely important to take certain precautions to keep your identity and money safe. Here are a few tips to help you avoid identify theft.

Set a password on your computer, lock your computer when away from it.

This is easy to do, and it will deflect most common computer users. Although, if your computer is stolen by a decent computer hacker, they’ll be able to get past the screen saver password so don’t store passords to your online bank accounts or other sensitive information on your computer. Make sure that you never leave your computer unattended in public such as the library, student union, or cafeteria. When you leave your laptop in your dorm room you could even stash it out of plain site.

Avoid revealing too much personal detail on social networking sites.

Every piece of information that identity thieves can gather about you is another clue to stealing your identity.  Seemingly harmless pieces of information individually (birthday, address, phone number, etc) can add up over time and eventually make you a victim of identity theft.

Not only is this good for your security, but can also protect your future career. Remember, everything you post on Facebook, Twitter, or MySpace could end up being seen by the wrong people at the wrong time. Use social networking wisely, and don’t post pictures that might compromise your reputation or give off the wrong idea about you.

Don’t let anyone borrow your credit or debit cards.

This might not sound like something you’d ever think about doing, but you’ll be running across dozens of “mooches” at school. They might ask you, “Hey man, can I just borrow your card to order a pizza, I’ll give you the cash”, but don’t trust them unless you are really close to them. Don’t give out your credit card number or debit card number to anyone, write it anywhere, or store it anywhere on your computer.

Don’t open a tab on your credit card and forget it.

I’ve never done this, but I’ve come close! You never know who might be working behind the bar and if they’ll abuse your card if you leave it there overnight. Make sure your designated driver reminds everyone to close out their tabs. If you’re walking home or taking public transportation, write a note on your hand to remind yourself.

Call right away if credit card stolen or lost.

Do not wait until the next morning if you think you lost or had your credit card stolen. Credit card companies have 24 hour customer service, and it will be much easier on yourself and the credit card company if you report it right away. Even if you end up finding it a couple of days later, it’s better safe than sorry, and you’ll receive a new card usually within a week.

You aren’t personally responsible for an unauthorized credit or debit transaction, but you can make a much stronger case that it wasn’t you if you report it as soon as you think it’s been lost or stolen.

Don’t keep cash in your dorm room, use debit card instead

Identity theives take your identity so they can steal money.  If you just leave your money lying around, they can just skip the identity part and go right after your cash. It’s not that you don’t trust your roommate (or maybe you don’t), but when you aren’t there, your roommate could be bringing in all kinds of people to the room that you’ve never met before. It’s always a good idea to keep your cash on you or better yet, use a debit card for most transactions.

If you’ve never had your identity or credit card stolen in the past, let me assure you it can drain a lot of your time and money trying to get the situation straightened out. Here are some more identity theft tips to help protect your money and your credit.

Credit card fraud isn’t a new experience for me, I’ve had people steal my credit card number and spend hundreds of dollars on it before.  Cleaning up the mess was a major pain, which is why I groaned when I recently received the letter below from Bank of America’s Global Consumer Fraud Prevention department:

“We have learned that some credit card information for your Bank of America account may have been compromised at a third party location.  Your credit card number may have been part of this occurrence.  At Bank of America, we take your privacy very seriously.  To ensure your privacy is protected to the best of our ability, Bank of America has taken the following steps:

 

– We have reviewed your credit card account activity and see no evidence that your account has been misused in any way.  We will continue to monitor activity on your Bank of America account, and if we detect suspicious transactions, we will notify you.

 

– As a measure of added security, we will close your current account and issue you a new account number and credit card(s). They will arrive in a separate mailing in approximately 5 – 7 business days.  You many continue to use your existing card until your new card arrives.”

Then they go on to advise me to review my monthly statements and online banking account for unauthorized transactions, destroy my old card, and change my credit card information for any bills I autopay with it.  Luckily, I only use this card as one of my backups when a merchant doesn’t accept my American Express Blue Cash card so I don’t have any recurring payments that I need to change.

Obviously Bank of America knows it could potentially be a major pain for some customers and they go on to acknowledge this and apologize:

“We understand that some of these steps may pose an inconvenience to you.  We apologize and are doing everything we can to minimize it.  Please know that Bank of America seeks to keep your financial information secure.  As a valued credit card customer, you are protected by Total Security Protection* including Fraud Monitoring, Zero Liability, Online Protection, Guaranteed Credit*, and our Privacy Policy.

 

Again we apologize for any inconvenience this situation may have caused you.  If you have any questions, please call 1-800-xxx-xxxx.  We are at your service 24 hours a day, seven days a week.”

I like the fact that they’re alerting me to the potential issue and are apologizing for the trouble it may cause but I would like to know more detail, such as when it happened and what information may have been compromised.  I’d also like to know what compromised means.  Was it simply that someone left my account information sitting out on their desk for anyone to see for a week, or that someone hacked into a computer system and stole my name, address, and credit card account number?

They do end the letter with a nod to identify theft protection:

“P.S. For important information on how to protect your identity, please visit us at bankofamerica.com”

I checked out their main page and found a link entitled “monitor and manage your credit” under the Privacy and Security section that contained information on their Privacy Assist and Privacy Assist Premier products.

• Unlimited online access to the information the 3 leading credit reporting agencies—Equifax Inc.®, Experian® and TransunionSM—are reporting about you.
• Your credit files will be monitored each business day. You’ll be sent a notification within 2 business days when new accounts are opened, inquiries are made, or address changes occur so you can take action if needed.
• Experience Internet Surveillance – a powerful online feature that monitors your personal information on the Internet

Their Privacy Assist products sound pretty useful but they do have a monthly fee for the service.  I don’t have anything against paying for credit card and identity monitoring in general but in this case, since it was Bank of America’s partner that potentially compromised my data (whatever that entails) it would be nice if Bank of America would give me one year of their service at no charge.

So what do you think?  Should I take the time to follow up with Bank of America and see if they’ll grant me access to their credit and identity monitoring service? Do you think if I call in they’ll provide me with more information on what actually happened to “compromise” my information and the extent of the issue?

Equifax’s ID Patrol, a new identity theft protection and credit monitoring service, launched recently and I used a promotion code to sign up for a free trial. I’m a big fan of credit monitoring services, as you could probably tell from my True Credit review, especially if they offer identity theft protection as part of the package deal. So, lets review how ID Patrol stacks up against the competition.

Let’s start with a quick walkthrough. To sign up for the service I went to Equifax.com.

It was pretty simple to locate their ID Patrol product since they have a huge banner on the front page.

Then I logged into my account with Equifax. (You can create one for free if you don’t already have one, you don’t have to sign up for anything.) Once I signed up for ID Patrol I was taken directly to a page that showed me my current credit reports at all three bureaus.

Aside from having all three of my credit reports on the same page, my debt-to-credit ratio at all three bureaus was clearly spelled out. The entire thing was easy to read and pretty comprehensive. They get points for that in my book – I’m busy, and if I have to take 30 minutes just to figure out how to use a service I’m paying for, then I’m not a happy camper.

I was pleasantly surprised that all of the main ID Patrol features were visible on the front page and it took me very little time to figure out how to use them.

At first glance this service has a ton of features. You can:

• View your current credit reports at all three credit bureaus.
• Freeze your Equifax credit report with the click of a button.
• Get email alerts any time something changes on your credit reports.
• They monitor suspected internet trading sites (The ones that buy and sell people’s information and credit card numbers.) and they will alert you if your information shows up on a “for sale” list.
• You get up to $20,000 of identity theft insurance as part of the ID Patrol package.
• They have “Identity Theft Resolution Specialists” on call 24/7 in case your identity does get stolen.

Now, since most credit monitoring services offer you three-in-one credit reports, account freezing, and email alerts, I wanted to take a closer look at the other main features to see if the service was really worth the $14.95 a month.

Equifax WebDetect™ – Suspected Internet Trading Site Monitoring:

It took me about three seconds to add my social security number to the list of numbers that ID Patrol actively searches for over the internet.

The cynic in me was hoping that they didn’t just Google my Social Security number. There is no official list of sites that they monitor since they are supposedly “underground, illicit information trading sites.”

I was not 100 percent sold on this particular feature. I mean, to my way of thinking, the identity thieves who are selling information are probably selling large lists at a time – and I doubt seriously that they are letting prospective buyers “Get a peek” at said lists before they pay for them.

So…if that’s the case, how could Equifax monitor those lists for my information, unless they are buying the lists themselves? It just does not make sense to me.

Giving them the benefit of the doubt though, if they did find my information on an “illicit list” then the email alert might give me time to freeze my credit reports and call my bank before any charges were made.

$20,000 of Identity Theft Insurance:

Now the truth is, when your identity is stolen and fraudulent charges are made on your credit cards you are not liable for more than $50 per card. Here’s a quote from the FTC:

• Your maximum liability under federal law for unauthorized use of your credit card is $50.
• If you report the loss before your credit cards are used, the FCBA says the card issuer cannot hold you responsible for any unauthorized charges.
• If a thief uses your cards before you report them missing, the most you will owe for unauthorized charges is $50 per card.
• Also, if the loss involves your credit card number, but not the card itself, you have no liability for unauthorized use.”

However, if your bank account information is stolen you could end up being liable for all the charges that were drawn on your account between the time that your information was stolen, and the time that you reported the theft to your bank.

I was surprised to find that the $20,000 of Identity theft coverage also pays for:

• The cost of getting notarized fraud affidavits.
• The cost of sending certified letters to your creditors and the police.
• If you have to take time off of work to straighten the mess out they could reimburse you up to $500 per week, for as many as four weeks.
• “Reasonable” attorney fees, long distance phone calls to your creditors, and, if you had to close out your previous accounts, they even pay for new loan application fees.

24/7 Identity Theft Resolution Specialists:

A search of Experian’s website did not reveal a special number for ID Patrol users to call in case of fraud. They do list an automated 24 hour phone number – so I called it. Disappointingly all it did was give me instructions on how to place a fraud alert online.

Two things here:

1. You don’t have to use Equifax’s ID Patrol Service in order to call their number and get automated instructions. That service is available to everyone, so no real reason to pay extra for it.
2. If you really think your identity has been stolen, then you need to freeze all three of your credit reports completely – not just place a fraud alert. Most lenders will refuse to issue you credit if you have a fraud alert on your account – but not all of them. When you freeze your credit report it means that lenders literally cannot pull your credit score to give you a loan, so it’s far more effective than just an “alert”.

In Review:

I am actually going to ditch my first love (True Credit) for this service. Why? Because I am currently paying $15 a month to monitor all three of my credit reports with True Credit, and it has no identity theft insurance. With ID Patrol, I get all three reports, plus the identity theft insurance for $14.95.

Even given the dubious nature of some of the features, it comes down to price vs. functionality, for me. ID Patrol has the extra features that I want, it’s basically the same price, and it’s easier to use.

Another priceless bonus is this: The only ads I ran across while using ID patrol were for an Orange Checking Account at ING Direct, and a Home Depot Account. True Credit’s pages are swimming in targeted advertisements, and that gets old fast.

So, what do you think? Is Equifax’s ID Patrol Service worth $15 a month? Would you use it?

What is True Credit?

True Credit is a credit monitoring service that allows you to check your reports and scores from all three credit bureaus each month.

Do you really need to monitor your credit reports?

Well, depending on who you ask this service is either a valuable lifeline or a total and complete waste of money.

Let me be frank: If you are able to walk into any bank or auto dealership in America and have them roll out the red carpet for you, then you do not need this service! You can simply check your free credit reports once a year, look for inaccurate information, and give yourself a well deserved pat on the back for expertly managing your credit.

However, if you are like the rest of us, and your credit score needs a little work, then yes, this service should be invaluable to you.

Personally, I monitor my credit each month through a service called True Credit. Using this service has allowed me to raise my credit score over one hundred points (yes you read that correctly) and it has prevented me from accidentally lowering my score by applying for things I might not get approved for. Forewarned was forearmed in my case.

The Lowdown:

For $15 a month True Credit bought me access to all three of my credit reports and scores in an easy to read format. The sad fact is, not all of my creditors were reporting to all three bureaus, and I was shocked to find that my score varied wildly from place to place.

How True Credit Helped Me:

1. As soon as I signed up I was able to look at my reports from all three credit bureaus. It turns out, I had incorrect information on all three credit reports. I was able to immediately challenge an incorrect past address, and several old collection accounts that had already been paid off but were still reporting as open accounts. That is what raised my score.

   Now, it is important to note that you do not have to pay for a credit monitoring service to challenge items on your credit report – that is free. However, having everything in one place, printable, and easy to compare side- by- side made the process much easier for me. In my opinion that alone was well worth the $15 because it saved me time and stress.

2. I had a former friend who stole my personal information and used it to open an account in my name. I had previously resolved that issue, but keeping tabs on my report each month lets me be very, very sure that they do not do it again. Once your personal information has been stolen, you can never really be sure that the thief won’t use it again, or give it to someone else.

   Using True Credit gives me enormous peace of mind. No more identity theft here – I’m going to know it as soon as it happens and be able to take action on it. They also give me the ability to freeze and un-freeze my credit report with the click of a button. If I ever do notice suspicious activity, I can stop it right then and there.




3. Knowing my credit scores has save me from making several bad decisions. Once I knew what my score was I stopped applying for credit card offers that I probably could not get approved for, like platinum cash back rewards cards. Before, when I did not know my credit score, I always figured,

   “What the heck? Maybe I will get approved and that is a good offer!”

   Now, let me tell you that was the wrong way to go about it. Applying for any new loan can lower your credit score so while I was happily applying (and getting rejected) for several cards a year, my score was plummeting.

4. True Credit allowed me to time the purchase of our last car. I was able to wait until my score had gone up some (and because I monitored them, I knew exactly what all three of my scores were). Because of that, we were able to finance at a better interest rate than we would have gotten several months earlier, and we came out on top of the deal.




5. I noticed an interesting psychological effect - Once I started paying to monitor my credit, I started taking my score more seriously. I felt more in charge, and more comfortable with the credit side of my finances. It would be interesting to know if any of you have had that same effect come from monitoring your credit? Did you notice any change in the way you handled things while you were monitoring vs. when you were not?

Now, again, paying for a service like this may not be your cup of tea. I can only tell you that I have found it to be an essential part of rebuilding my score. If you are facing some similar challenges, then it will probably benefit you to take a look at it.

Free Trial: True Credit is offering a 30 day free trial that will let you try out the service and see your TransUnion credit report and score for no charge. Click here to get the free trial.

I also found an excellent walkthrough on YouTube. It’s about eight minutes, so if you’re at work, you may want to wait until you get home to watch it. It gives you screenshots, guides you through the process of looking at your reports, and even covers some additional features that I didn’t mention here.

How about you? Have you ever used a credit monitoring service?
Do you think it’s worth the money?

Leave us a comment below and give us your opinion!

Photo from Dreamstime.com

Writer Auditions – Author Connie Brooks – Offer Your Feedback

Identity theft victims can have their credit ruined or even end up in jail as the result of having their personal information stolen.

Stolen Identity Can Mean Jail Time
Imagine being pulled over for a broken tail light only to end up being hauled off to jail because there’s a warrant out for your arrest that you knew nothing about.  It sounds crazy but unfortunately it does happen to some victims of identity theft.  Instead of simply using your identity to borrow money, which is bad enough, some criminals use your stolen personal information to fraudulently obtain a driver’s license or identification card in your name.

In the event they’re pulled over or are arrested the law breaker gives the police your name and id.  Then they don’t pay the ticket or show up for court and the judge issues an arrest warrant for the name on record. Or the criminal may even show up and plead guilty, using your identity the whole time.  In the eyes of the government, you are the one that broke the law and the offense goes on your record.

Criminal Identity Theft Example
For example, here’s an identity theft story of a guy in Albuquerque, New Mexico who was in jail for days because a criminal wanted for drug charges had assumed his identity. His story is a good example of how this kind of identity fraud can follow a person around for years.  After an initial run-in with the law in 2003 due to his stolen identity, he was locked up for six days in 2005 because the police again mistook him for the wanted criminal.

Combating Criminal Identity Theft
While identity theft can be hard to prevent there are steps you can take that we’ll discuss in further posts.  Here are some of the suggestions the Albuquerque Tribune article makes for dealing with criminal identity theft when it does occur:

• Get yourself fingerprinted so that your prints are on file for comparison. Contact your local law enforcement agency.
• Ask arresting agency to amend all criminal complaints that wrongly name you.
• Ask the appropriate courts to provide you with official documentation showing that your identity was wrongly used in a criminal case, then carry those documents with you at all times.
• Keep the phone number of a good attorney handy.

Although these tips may be use, obviously the goal is to avoid the id theft in the first place.  Next time in the Identity Theft series we’ll start to look at how you can prevent identity theft.

Identity theft in the form of stolen account information is often paid for with the time you spend contacting banks and merchants to cancel fraudulent transactions.  Unfortunately there are higher financial implications for a more sinister type of identity theft that involves not just a few transactions but entire fraudulent accounts opened in your name.

Fraudulent Account Identity Theft
This type of crime can be much more damaging because identity thieves try to use a false address when they setup a fake account.  Of course this means you don’t receive any bills or other correspondence tied to the account even though it’s open in your name.

Identity Theft Costs
What you don’t know can definitely hurt you.  Bills and debt can mount up in the fraudulent account and when collection agencies finally come after their money, the thief at the fake address will be long gone.  The collection agencies will track you down since the account was opened with your personal information and give you the bill.

Ruined Credit
It’s not just the big bill you have to worry about.  The identity thief may severely damage your credit as they run up the bill, never making payments and raising red flags on your credit report.  These credit problems can have far reaching effects on your ability to take out a mortgage, personal loan, or even get auto insurance.

Lost Time
Obviously since you didn’t open the account or spend the money you’ll have to begin the process of clearing your name and handling the debts.  This process is a very time consuming and frustrating job that can take years to clear up in some cases.

Personal Information Sources
The credit card companies take a pretty big hit from identity theft costs so they provide resources to educate consumers on how to avoid it.  A cheat sheet on protecting yourself against identity theft from Visa lists the following ways that criminals get access to the personal information needed to open accounts in your name.

• Stealing unopened mail (pre-approved credit offers, bank statements, tax forms, bills)
• Access to your home (service person or “friend/family”
• Using inside sources (white collar crime)
• Social Engineering
• Lost wallet or purse
• Dumpster diving
• Online data theft

The thieves can use this information to:

• Open new bank accounts, and write bad checks.
• Establish new credit card accounts and not pay the bills.
• Set up cellular phones or utility services and run up bills.
• Obtain personal or car loans.
• Get cash advances.

Preventing Identity Theft
You can avoid some of the ways identity thieves access your information by getting a secure mailbox, shredding your documents, not giving out personal information over the phone, and keeping the minimum amount of personal information possible in your wallet or purse.

Of course you can’t protect yourself against some of sources such as white collar crime and online theft of your information from a third party. Although you can’t prevent those from happening you can make it more difficult to apply for credit with your social security number by putting a fraud alert on your credit report.

I did this after having my credit card account number stolen, anytime you apply for credit with your social security number, the merchant or financial institution is supposed to see the flag and contact you.  The one downside is that you’re unable to receive your free annual credit report online.  Instead you have to mail in a request for your report.

Monitoring your credit report is definitely a step you should take to protect yourself from identity theft.  Keeping an eye on all the lines of credit and accounts in your name can help you from getting a nasty surprise months down the road. 

Next time I’ll take a look at the form of identity theft where a person actually assumes your identity: name, driver’s license, and all. 

Identity theft can take several different forms, all of which will cost you some amount of time and/or money.  There are three main types of identity theft, I’ll take a look at how you can be affected by each one, starting with the most basic and moving up to the most sinister. Each subsequent level of id theft requires more information and sophistication to pull off and also ends up costing you more time and money.

Stolen Account Information
The most basic type of identity theft is account fraud, where someone finds out your account information and uses it to buy something or take some of your money.  A common example of this is a thief using your credit card to make purchases. 

Credit Card Hijacked
One holiday season I was given the unfortunate gift of this type of identity theft.  I opened my credit card statement in January to find a bill much higher than I had expected. I discovered that someone had ordered hundreds of dollars of goods through a catalogue back in December.  I did receive that catalogue but had not ordered anything through it in years so I new something wasn’t right.

Identity Theft Discovery & Research
 This is typically how the stolen account form of id theft is discovered, a person looks at a bank statement or credit card bill and discovers purchases or withdrawals that they didn’t initiate.  Your main cost for this type of crime is mainly the time it takes to contact the authorities and businesses involved in the transactions and prove you weren’t the one behind them.

In my case I called the catalogue and my credit card company to report the problem.  They opened an investigation and I had to take an afternoon to go file a police report.  It turns out the catalogue hadn’t followed policy during the busy holiday rush.  They had allowed the huge order to be shipped to an address different than the billing address, which was an abandoned house downtown.

Identify Theft Costs
Immediately upon reporting the theft, my credit card company flagged the card and sent me a new one. After the investigation was finished Visa refunded the cost of the purchase on my card.  I wasn’t out any money, my costs were:

• Inconvenience of cancelled credit card
• Time spent corresponding with:
• Credit card company
• Merchant
• Police

Preventing Identity Theft
I never found out who placed the order or how they got ahold of my information.  Hundreds or thousands of people have accessed my credit card details over the course of my life, every time I buy something the person taking the order is provided that information.  There’s not much you can do to prevent one of these people from being dishonest and misusing your data.

The best answer is to simply monitor your financial statements for any irregular or unexpected transactions and follow up on them right away.  I did have another case where someone used my Marriott account to book hotel rooms in another state.  The problem there was I had a credit card on file, the perpetrator didn’t need to steal my card information since it was already in my profile and authorized to spend. 

Luckily I had the account setup to send me an email anytime a transaction went through. I was able to contact the hotel right away and cancel the charge but I learned the lesson, you can prevent this type of fraud by not keeping a credit card on file.  It’s not quite as convenient but it can prevent thieves from using a backdoor into this type of identity theft.

Next time I’ll talk about the second general type of identity theft and it’s costs to you.

Identity theft protection is no longer just a matter of buying a document shredder and keeping track of your receipts. Identity fraud evolves every day and according to security experts, net-savvy thieves are getting more efficient about blending their illegal activity on the ground and online. Here are some examples from Identity Theft Resource Center (ITRC), a non-profit group focusing on the latest I.D. theft trends and assistance for victims.

Identity thieves are stealing more paper checks being delivered to homes. Why? Because with the credit squeeze, there are fewer people being approved for checking accounts, so physical checks left in mailboxes are being swiped more frequently so the account numbers can be used to open fraudulent accounts under different names. 

Fraudulent dating, job hunting and social networking Web sites are being used to gather critical data for a host of fraudulent activities.  Be careful what you put online.

Thieves are getting younger since young people are the earliest adapters of online skills. The ITRC notes that arrest records show that younger individuals are getting caught with sophisticated forgery equipment or designing sophisticated online scams.

Sadly, there are more reports of identity theft occurring within families and groups of friends. Individuals are more likely to have their guard down on protection of credit and account data around people they know. Often, such thieves are connected to drugs or other illegal activities being done by their peers.

How can you help protect yourself against identity theft?

Change your online record-keeping behavior. If you download bank or credit activities to a desktop program like Quicken or Microsoft Money, don’t store passwords on that software. It may slow you down, but take the time to type in that access data, and then log off as soon as you’ve completed your transactions and close the browser too. Never put this data on a wireless-enabled computer – identity thieves lurk in coffeehouses and other public places to capture data that’s traveling through the air. Confine these activities to the desktop and secure terrestrial Internet connections.

Put a lock on your mailbox. If you work long hours or are otherwise not available to grab your physical mail as soon as your letter carrier drops it off, either install a high mail slot on a door with a strong lock (so a thief can’t reach in and grab mail that’s fallen on the floor), or install an outdoor mailbox with a key lock on it that only you can open. Also, talk to your bank or check printer about secure ways to receive delivery of printed checks.

Shred or cut up any receipts or credit and account documents. A strong, safe paper shredder really is a good investment. What should be shredded: credit solicitations, receipts you’re not keeping, line of credit checks that come in your monthly credit card bills (which you shouldn’t be using anyway), and tax-related evidence for prior-year returns your tax advisor says you no longer have to keep.

Guard your Social Security number above all.  Never, ever share this data unless you are dealing with a recognized financial institution that you trust. Never put it on a check or type it into an online form.

Beware the “Phishermen.” Phishing is a process by which scam artists try and get you to divulge your Social Security number, your account numbers, address or other personal information under the guise of a legitimate company you may already be doing business. It’s most common over the Internet, but there’s no reason why a phishing request couldn’t come via direct mail or over the phone. They’ll get your attention by saying there’s a problem with your account you have to address immediately.

Online, the scams are so sophisticated that you’ll see e-mails that look exactly like the ones your bank, credit card or even your airline mileage club would send you, right down to the logos and disclaimers. Anytime anyone asks you for personal information, use your own account customer service number (not the one on the mailing) to speak to a live person to verify that the request is real.  If it’s not, save the evidence – it may help put the con artists in jail.

Change your passwords occasionally. If the only username and passwords you can remember are your e-mail address and your dog’s name, you need to develop a schedule for changing those passwords and storing that information in a safe place off your computer. Again, resist storing this information on your computer.

Get each of your credit reports once a year. By law, you’re entitled to free copies of your credit report from each of the three major credit rating agencies – TransUnion, Experian and Equifax. Don’t get them all at once – stagger them a few months apart so you can see if erroneous data appears throughout the year. 

If you are on active duty with the military, you can place an active duty alert on your credit reports to help minimize the risk of identity theft while you are deployed. Active duty alerts are in effect on your report for one year – if your deployment lasts longer, you can place another alert on your credit report.  Couples need to check both reports.

Research identity theft insurance. Some companies offer identity theft insurance that will cover lost pay if you have to straighten out your credit, but realize they will not do the dirty job of restoring your credit – that’s up to you. You’ll also want to research whether the companies selling this insurance are affiliated with the credit industry, look for conflicts of interest. Also, check your home or renter’s insurance policy to see if they provide identity theft coverage. 

Stick with a known ATM. Some of those independent ATMs you see in convenience stores, restaurants and bars may be collecting your data for illegal use. Use ATMs only at established banks.

Watch your wallet and cell phone. Yes, it sounds dumb, but the easiest one-stop opportunity for identity thieves to fleece you is sitting in your purse or pocket. Keep only a few necessary items in your wallet and regularly clean out receipts and other data that would identify you. And keep in mind that an Internet- and address book-equipped cell phone is a potential gold mine – they’ll not only get your information, but they’ll be able to reach all your contacts as well.

What if identity theft still happens? One of the best resources for a step-by-step guide to fighting identity theft is the Federal Trade Commission and it’s identity theft web site. The FTC provides a complete listing of contacts and procedures for getting to the bottom of identity theft before the event goes from being serious to devastating.

This post is produced in association with the Financial Planning Association (FPA), the leadership and advocacy organization connecting those who provide, support and benefit from professional financial planning.

Have you ever faxed over a copy of your name, address, and social security number to an identity thief?  I thought for a brief moment today I might have fallen victim to a savvy phishing/fax scheme that originated with the email below:

2nd Notice! – Important! – W-9 tax form

This is just a reminder. We request that you assist us in updating our records, therefore expediting the delivery of your 1099-MISC (Statement of Earning for Non-Employees) for 2007.  Please print out the W-9 form then complete and sign it.  Please fax completed form into our office ASAP at xxx-xxx-xxxx. Please make sure that the name, address, and Tax ID Number are the same which are used when filing your tax return.

If this form is not completed and faxed back to us by the end the business day Thursday 1/24/2008, the Internal Revenue Service requires us to begin backup withholding at the current applicable rate allowed.

Internal Revenue Service! Backup withholding!  I faxed that W-9 over as fast as I could.  As I replied to the email to confirm receipt of the fax I had a sinking feeling in my stomach.

Was this a legitimate email?  Had I just sent my information to a scammer?  Luckily, it turns out it was all above board but the more I thought about it, the more I realized how a technically savvy person could pull off a scam like that.

Misrepresenting a Legitimate Company
I won’t go into detail but a person could find enough information on most any personal blog to spoof an email that would appear legitimate but actually contain a fax number with an identity thief waiting on the other end.  Revealing your social security number, name, and address could leave you vulnerable to identity theft, especially combined with the information revealed on some blogs.

Of course many people would probably sense something wasn’t right for a variety of reasons. But all it takes is for one person to fall for it and their personal information could be compromised and exploited.  The reason I bring this up is that this approach is a sneaky derivative of the standard phishing emails many people have come to ignore.  We’ve seen enough phishing emails that we can mouse over the link and see it doesn’t go to paypal.com but instead some obscure web domain so we simply delete the email.

Phishing with a Fax Number
In this hypothetical instance, instead of listing a disguised link the scammer simply lists a fax number and creates a sense of urgency with the recipient.  With no hyperlink to trigger my internal scam filter, I didn’t pick up the potential danger of this one until after the information had been sent.  I’m fortunate that it was a legitimate request and will be more careful in the future. 

Identity Theft Evolving
What this reminded me of is that identity thieves and scammers will continually come up with ways to defraud people of their hard earned money.  Fraud awareness, education, and a common sense filter have served me well so far to date, knock on wood, but “they” will always be out there looking for ways to get into my wallet.  Of course I don’t lose sleep over it but I do hear horror stories about people whose identity was stolen and I definitely don’t want to go through the mess they have. 

Protecting Yourself Against Identity Fraud
For now, I continue to rely on common sense but lately I’ve been giving thought to signing up for a program like LifeLock that helps protect your identity and also provides you money to help clean up the mess in the event someone does take your information and abuse it.  I haven’t done a cost/benefit analysis yet on the price of the service vs. the value of protection & cleanup coverage but it’s on my to-do list.  Has anyone had any experience with the LifeLock service?

However you decide to protect your identity, make sure to think twice before clicking that link, sending that fax, or giving out information over the phone.  It may be a legitimate request like it was for me today but you certainly don’t want to find out down the road that you’ve been scammed.