Protecting yourself from identity theft is one of the most important things you can do in this day and age to keep your finances straight and to be prepared for what seems to be a looming financial crisis.
There are many different ways for bad guys to get ahold of your personal information and either run up phony charges on your credit or debit cards or to steal your identity all together. Any time you use your credit cards online you take some measure of risk. Avoiding making purchases from small vendors with little internet footprint or reputation to uphold, like some of those found on craigslist, eBay, or other classifieds sites can help but doesn’t guarantee your safety. In the past, giant lists of credit card numbers have been stolen by online hackers from both big banks and major retailers alike.
Something as seemingly mundane as handing your card to a server at a restaurant puts you at some level of risk. For that matter, any time your card leaves your site there is an opportunity for an unscrupulous individual to make an imprint and steal that information. Perhaps that person uses it themselves or they may even sell the information to a more sophisticated group or individual. Groups like this have even been known to make actual physical copies of credit cards for illegal use.
While having a credit card or debit card number stolen is upsetting it’s really not such a big deal. Just about every bank will reverse the charges and/or put your money back into your account following a simple phone call and some minor paperwork. I myself recently had a credit card number stolen and the bank detected the fraudulent use and reversed the charges before I even knew it had happened. I had a new card the next day via FedEx. No big deal.
Identity Theft is a much more serious issue to contend with however and much much more difficult to remedy. Some years ago, when the crime was just gaining popularity among thieves, my wife’s identity was stolen. The thieves were apparently very clever so it actually took quite a bit of time before she even realized it had happened. The longer it takes for you to become aware that your identity has been taken over the harder it is to unravel the damage and the more long lasting the inconvenience can be.
Our first indication that anything was wrong came in the form of a rejected application for a department store credit card. We both thought that it was odd for my wife to be rejected as she has always had low debt and excellent credit but we really didn’t think too much of it. Next we started getting phone calls from collection agencies and that’s when the bells went off. ”I owe how much to who?! You must have the wrong person.” Actually they had the wrong person but the correct identity…
And that’s the beginning of a very long process of dealing with creditors, banks, and credit bureaus to get your good name back and your credit score back up to where it should be. For us this turned out to be an inconvenience and cost us a lot of time and some money. But what if we were in the process of making a major purchase such as buying a house? It would have been devastating.
So, how can you go about protecting your identity? First of all, being cautious about where you make purchases and who has access to your information is key. Secondly, keeping track of all of your financial statements including credit card bills, bank statements, account numbers, drivers license information, and even credit card applications is important. Personally I shred anything that’s even the least bit personal. Don’t have a shredder? Pile those documents up next to the wood stove or fireplace and use them to get your fires going. When I was growing up we kept old newspapers to get the kindling burning. These days fewer and fewer people subscribe to “paper newspapers” and choose to get their news online. Getting rid of sensitive information while putting it to good use at the same time is a bonus.
There are also a number of identity theft services that you can pay for which will both monitor any suspicious activity as well as make it more difficult for someone to steal your identity in the first place. Thoreau and I both use LifeLock, which I know I’m very happy with. There are others that I hear are good as well.
Identity theft is certainly on the rise so if you haven’t given it any thought, make that something you look into in the new year and protect yourself and your family. Keeping your finances in order is just Prudent and Reasonable Prepping.
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