How to protect yourself from identity theft

September 24, 2012

Identity TheftMillions of people are the victims of identity theft each year. Perpetrators can cause significant damage to those who are not adequately protected. The two ways to protect yourself from identity theft are to be careful with your financial operations, and to choose options from financial providers which protect against identity theft. This article takes a look at both of these avenues in detail.

Being Careful

The first line of defense against identity theft is to be sensible and vigilant:

  • Know what your wallet contains – If your wallet is stolen, the most important thing to do is to cancel your credit cards, but you cannot do this if you cannot remember what cards you had, so make sure you know what’s in your wallet. You should also call a credit reporting organization so that your accounts are alerted for fraud. If you need to replace your credit card, try our credit card navigator tool to compare credit cards to find the right one for you. Don’t forget to make a copy of all your licenses and other information you keep in your wallet so you always have the information.
  • Checks – One of the easiest ways to make fraudulent payments, is through checks, which can be used if the person being paid to does not check for supporting identification. Make sure you keep on top of your bank and credit statements, monitoring them to see if any checking payments have been made. When you make bill payments, only include the last 4 numbers of your account on the check, and use a PO Box instead of your actual address.
  • Documentation – Identity thieves often start with personal banking information found on statements. Make sure you shred all your important documents to stop people from knowing your personal information. Better still, opt to not receive paper statements and bills – having your documents online removes the chance of any physical documents getting in the wrong hands.
  • Online phishing – Online phishing is a fraudulent transaction where you are asked to pay using your card for a product or service that doesn’t actually exist. Always check the verification status of transaction web pages and the encryption status. If you have been led to another site online, always be on your guard.
  • Passwords – Never make your online passwords easy to guess, and never use the same password for different online accounts.

Protection services

If you do become the victim of identity theft, then the outcome will depend on what measures of protection you have for your finances. Here are some measures of protection worth looking out for:

  • Unauthorized purchase protection – Many credit cards come with payment protection, which means that you are covered for any expenditures not made by yourself. This does not include persons linked to your account however.
  • Identity theft insurance and ID protection – If you want to, you can purchase identification protection, which gives you fraud monitoring, report monitoring, and assistance when if you do become a victim. Whether or not you choose this type of protection, it is always important to keep on top of your credit reports to see exactly what payments have been made, ensuring that none of them are fraudulent.