How to prevent identity theft
Identity theft protection services are very useful, but most of these services will do more to help you catch identity theft quickly and recover losses than to actually prevent your information from being stolen. Unfortunately, there is no way to completely guarantee that your identity won’t be stolen. In addition to signing up for ID theft protection, you should also take the following preventive measures on your own.
Create strong, unique passwords
One of the simplest ways to protect your personal information is to use strong passwords on your accounts. Keep the following things in mind when you’re creating passwords:
Be careful with your mail
Identity thieves can use both your outbound mail and mail you’ve received to get personal details about you. Don’t put sensitive mail like checks in an unsecured mailbox, make sure you shred mail with personal information on it before throwing it away, and check your mail quickly if it comes to a mailbox without a lock. It may also be wise to consider opting out of prescreened credit card offers, since ID thieves sometimes use these offers to apply for cards in your name.
Be smart about what you post on social media
Evaluate the information you’ve posted on social media and try to imagine how it could be used by identity thieves. For example, could someone use information found on your Facebook profile to figure out the answers to the security questions that protect your bank account? It might be a little too easy to find out your mother’s maiden name, the city where you met your spouse, the mascot of your high school, or the name of your first pet.
While it might be difficult remove all this information, you should at least consider your security before posting online. You can also choose security questions with harder-to-guess answers, make up unrelated answers and save them in a password manager, and set up two-factor authentication to make it harder for the wrong people to access your accounts.
Share your personal information only when necessary
Many organizations will ask for personal information that they don’t actually need. You don’t have to give your email address, phone number, or birthday to an organization just because they ask for it. Before sharing personal information with a medical provider, utility company, retailer, or landlord, make sure they really need it.
Be aware of your surroundings when you’re sharing sensitive details
Identity thieves sometimes get information by looking over your shoulder when you type in a PIN, listening while you give a credit card number over the phone, or stealing your wallet or purse when you aren’t paying attention. Be careful and aware of your surroundings when you’re in public, and be smart about what you share. For example, don’t give your credit card or Social Security number over the phone if someone else could overhear your conversation.
Check your financial statements often
Checking your bank and credit card statements won’t necessarily prevent identity theft or fraud, but it can help you catch problems earlier on. Look at your financial statements regularly and keep an eye out for unfamiliar charges and suspicious activity that could indicate your accounts are being used fraudulently.
What to do if your identity has been stolen
If you find out that your identity has been stolen, the first thing you should do is take steps to prevent further damage.
After you’ve taken initial steps, we suggest reviewing the FTC’s resources regarding identity theft for instructions dealing with specific scenarios.
How to report identity theft
While identity theft is stressful, reporting it is relatively straightforward. In most cases you’ll want to report ID theft to both the Federal Trade Commission and the credit bureaus.
For more information about handling ID theft, check out our previous post about what to do if your Social Security number gets stolen.
Children and identity theft
About 4% of identity theft victims in 2016 were 19 and under.1 While this isn’t a huge percentage, it does mean that parents should take some precautions to make sure their children’s personal information is secure. All the companies we recommend offer child ID protection, so if you have children, you may want to add this service to your plan.
Identity theft statistics
Identity theft is a serious issue in the United States, and in 2016 the Federal Trade Commission received 399,225 complaints of identity theft.2
While ID theft complaints were down in general, there was a dramatic increase in the number of complaints about ID theft used for credit card fraud last year. In 2015, 15.9% of identity theft complaints were connected to credit card fraud. In 2016 it was 32.7%, which is a 16.8% increase in just one year.2
2016 also marked a fairly significant increase in bank fraud—it went from 5.9% in 2015 to 11.8% in 2016.
A breakdown of how information is misused
Identity thieves use stolen information for many types of fraud:3
You may notice that these percentages add up to more than 100. In many cases reports of identity theft include more than one type of fraud, so it is possible that you could have your information used for credit card fraud and for utilities fraud.
These statistics show that identity theft is still a serious issue with significant financial consequences. If you’re looking for help protecting your personal information and all the accounts associated with it, we are confident that any of the identity theft protection companies we recommended can help you improve your security.