Pay cash when you can.
Unfortunately, identity thieves sometimes come in the form of dishonest employees at restaurants, shops, or other places that accept credit cards. They engage in a practice called skimming, which is copying the magnetic strip on the back of your card into a small device so that they can make a counterfeit card and sell it. It’s better to opt for paying in cash or by credit card at any merchant that requires you to put a social security number or driver’s license number (this is illegal in some states) on your check.
Never give out information to people unless you’ve contacted them.
Many thieves are taking advantage of the current financial craziness by proactively contacting bank customers of purchased banks and posing as customer service from the new bank. For example, thieves might contact Washington Mutual customers and pose as a JP Morgan customer service representative and ask for updated information. This is called phishing, and even though it’s been happening for years, the uncharted financial territory we’re in these days makes us more vulnerable. Don’t give out information to anyone who contacts you, unless you’ve contacted that person or company first. Phishing can happen by email, phone, or letter, so if you’re in doubt about the authenticity of the communication, call the creditor or bank to see if they really needed to contact you.
Check your credit report once a year.
Each credit reporting bureau allows you one free report per year. Instead of checking only once, consider staggering your requests, asking for a report from a different reporting agency every four months. This gives you more opportunity to stay up-to-date on any activity, either fraudulent or misreported.
Taking these extra steps might require a little more time, but the effort will make it that much harder for thieves to steal what’s most precious to you: your good name and your good credit history. After thieves buy expensive homes and cars, or run up astronomical credit card debt in your name, you’ll be left to pick up the pieces. Many consumers have the added burden of cleaning up bankruptcy filed in their name by the thieves. Sometimes, financial gain isn’t even the goal. Thieves can apply for a passport in your name and bring illegal substances into the country; they can commit felonies in your name or even just pile up annoying parking tickets. Be committed to watchdogging your information; a shredder is a lot less expensive than bankruptcy.
