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Identity theft is a real problem. Last week, I wrote about my identity theft story, and gave tips on how to deal with it if it happens. But the best way to deal with identity theft is to prevent it from happening in the first place. Pay attention to these ten ways to prevent identity theft and avoid being a victim.
10 Ways to Prevent Identity Theft
Pay with Cash
My favorite way to prevent identity theft (and one that isn’t listed on any other post I’ve seen regarding identity theft) is to pay with cash. This is actually one of the main reasons why I tend to use cash over card! I’m fairly certain that my bank information got stolen with a skimmer at a gas station. I now only use cash to pay for gas and guess what? It really doesn’t take that much longer. Yes, I have to go inside and actually speak to the cashier, but doing that is well worth the peace of mind I have in knowing that my card information won’t be stolen at the pump.
It’s also best to use cash at restaurants. Although it hasn’t happened to me (that I know of), tons of people get their card information stolen while trying to pay for meals. I know this because I had an unscrupulous boyfriend who admitted to doing this crap to people, and who told me that it basically happened at every restaurant he worked at (we are no longer together).
My European friends may be wondering how this happens. Well, Europe is really ahead of the US when it comes to paying for stuff at a restaurant. In every European country I’ve been to, the server brings the little machine to you, you swipe your card and complete the transaction. In the US, the waitstaff takes your card to the back somewhere, and swipes for you, bringing you the receipt upon completion. Your card is alone with a random person in the back of a restaurant. It’s way too easy for someone to copy your information during that time.
Paying with cash also prevents nefarious people from shoulder surfing and obtaining your card information at the ATM and at check outs. Which brings us to our second way to prevent identity theft.
Stay Alert in Public
If you are going to use a card in public (or even at an ATM to get cash) stay alert. Be mindful of people around you who may be trying to steal your card information. These shoulder surfers are peaking over your shoulder or around your waist with their cellphones, ready to grab photos of your information if you aren’t careful.
A good way to prevent shoulder surfing is to cover the pin pad during transactions. You should also keep your card number and security code covered and out of view of those around you. I know it’s not something you normally think about, and it may feel awkward at first. But try to keep the most important parts covered with your hand when you pull it out. It will become second nature after a while.
Monitor Your Credit and Accounts
Ok, so monitoring your credit report and all of your accounts may not exactly prevent identity theft, but it will help you catch and resolve any problems. It may also prevent a bad situation from turning into a terrible situation, which is also important.
If you monitor all of your accounts regularly, you should be able to catch any suspicious activity before it causes you undo hardship. Monitoring your credit reports will ensure that no new accounts have been opened in your name. This is crucial because sometimes people don’t steal your bank information, but with your address and phone number they can open brand new lines of credit. All of your real accounts look just fine, so you may not even realize that your credit is slowly being destroyed.
Another new thing that I just heard of is when nefarious players open new lines of credit in your name, then slowly build that credit. You may be thinking “hey, this is the Santa of identity theft, they are actually helping me out!” but that’s not the case. They target folks with poor credit because they are less likely to monitor their accounts. They can slowly build the credit to the point where they can take out a huge amount, then ditch out, leaving the credit in shambles. It’s really the long con of identity theft. Monitoring your credit will help you identify any items that shouldn’t be there, and the faster you find them, the easy they are to get off your report.
Freeze Your Credit
Freezing your credit can be annoying, but it’s also one of the best ways to prevent identity theft. If your credit is frozen, no one can open new lines of credit in your name. This includes you though, so if you are shopping for a new home, car, credit card, or anything else that you might need credit for, you will need to call and unfreeze your credit.
Freezing your credit won’t, however, prevent people from stealing and using the accounts you already have open. You still need to protect your bank accounts and current lines of credit.
Use Strong Passwords (and Change them Often!)
Password hacking is one way that thieves can access your account information. I’ve been getting notifications on Chrome lately that my passwords to certain websites may have been compromised. The best way to protect your passwords is to use strong passwords that aren’t easily identifiable with you, and change them often.
A strong password has a combination of letters, numbers, and special characters. They also sprinkle in a few capital letters, just to keep things interesting. Avoid using things that are special to you, like children’s and pets’ names, your home town, or your favorite sports team.
The strongest passwords are random numbers and letters, but those can be difficult to remember. I know experts don’t recommend writing down passwords, but if you keep a log of passwords in a private journal locked up in your house, it’s probably going to be safe from hackers.
Another thing you can do is use some type of two-factor authentication. Most banks and credit card companies offer this option. Ever since my first experience with identity theft, I’ve needed to send myself a text in order to log onto my bank account. So not only do I need to know my user name and password, but I also need to have my phone with me, and enter the code I receive via text. It adds an extra layer of protection to my account.
Protect Your Computer
Protecting your passwords is only half of the battle when it comes to safeguarding your personal information in a technological world. You also need to protect your computer. This means both physically and in the digital world.
Physically protecting your computer is common sense. Don’t leave your laptop unattended at coffee shops, airports, or anywhere else you might be using it.
Protecting your computer in the digital world is a little less intrinsic, but still important. Make sure that you have a lock screen password, and don’t let any websites auto store your important passwords. Don’t log into any of your financial accounts when connected to public WIFI, and make sure that your home network is secure. Avoid questionable websites, and ensure that you have good antivirus and anti-malware programs installed. Taking these steps will help prevent malicious code from getting into your computer, and will help ensure that your personal information is safe from hackers.
Protect Your Mail
Fraudsters don’t have to be high tech. Not everyone who is out to get your identity is going to do it by hacking your computer and stealing your information on line. Some simply go after the personal information that’s sitting right outside your home – in your mailbox.
Most people get tons of spam mailers from credit card companies and home refinance companies. It is all too easy for people looking for a quick buck to steal these offers out of the mail and apply for them. They have your full name and address right on them! Although I hope that those companies have ways of preventing fraud, I’d rather count on myself then on them. Make sure you are bringing your mail in everyday, as soon as possible. This will give people less of a chance to steal these offers right out of your box.
This is also another reason why monitoring your credit is so important. If someone does nab something out of your mailbox and gets issued a new line of credit in your name, you will see it.
Use a Shredder
Speaking of low tech – dumpster diving is still a real thing. Usually, we think of dumpster diving in terms of flipping, or grabbing couches off the side of the road on trash day. But some folks take it to a whole new level. They are dumpster diving for your personal information.
Think about how many documents you have in your house that have your personal information on them. Those credit card offers we just talked about have your name and address. You might have tax forms with your social security number or date of birth on them. Utility bills have all of your account information right there on them – how easy do you think it would be to call a utility company and order new service with just the information on the bill? I’ll bet you have tons of random documents laying around with personal information on them.
The best thing to do with this stuff is shred it before you throw it out. Invest in a shredder, and run everything that has any personal information on it through the shredder before you toss it. This will stop anyone dedicated enough to go through your trash from gaining your personal information.
Set up Security Alerts on your Bank Cards and Credit Cards
My Capital One credit card sends me email notifications for shady looking transactions. Usually, this happens if I’m making a large transaction or if I’m gas station hopping. I need to pull out my phone and respond to the email that yes, I really did intend to buy a thousand dollars-worth of junk at Michaels, or yes, I did just get gas in Pennsylvania and West Virginia in the span of two hours. If I don’t respond, the transaction won’t go through. I also have the option of responding that no, I was not actually trying to spend a thousand dollars at the nearest cigar shop. If that happens, they will automatically cancel my card, and I’ll have to get a new one.
Although it can be annoying, I’m incredibly thankful for this service. They may not catch all suspicious activity, but it’s good to know that they are paying attention, alerting me, and trying to stop fraudulent activities.
Know the Scams
Many identity theft scams come to you via telephone or email. There are so many that it’s impossible to name them all, and nefarious players are always coming up with new ones.
It’s important to know that legitimate companies (and government agencies) will not call you and try to guilt or strong arm you into giving personal information over the phone. The IRS will not call and threaten to arrest you if you don’t pay immediately. Your bank will not call you to verify your account number. Your social security number does not expire.
These are some of the common phone scams that I’ve heard of, but the bottom line is to never ever give out personal information on the phone when someone calls you asking for it. If you aren’t sure, you can always hang up and call back from the company’s official registered number (call the number on the back of your bank card, go to the IRS website and call their number, etc.). There are no real-world repercussions for verifying the identity of anyone who calls you. If they say those things are not allowed, it’s a scam.
Email scams are incredibly common as well. Generally, email scams come in the form of phishing. That means a fake website will send an email posing as a legitimate site. You might get an email that looks like it’s from your bank, asking you to “click here” to verify your account. The link will even take you to a legitimate looking website. But there are always signs. The URL won’t be right – instead of bankofamerica.com, it will be something like bankofamerica.ex.com or bankofamerican.com. There may be some typos on the webpage, or it might look slightly different than you are used to.
The important thing to remember is to never enter your account information if you clicked on an email link. If you did receive an email asking for information, call the official number of the company to resolve any potential problems. If you need to log into your online account, do so from a trusted URL.
Consider a Credit Monitoring Service
A final and bonus (this is the 11th, if you were counting!) way to help prevent identity theft is to use a credit monitoring service. Companies such as Identity Guard will monitor your credit and alert you if there is any suspicious or unusual activity. Some plans even include credit monitoring and access to your credit report from all three of the big bureaus. These services prevent you from having to do all this monitoring yourself. I like Identity Guard because they use IBM® Watson™ Artificial Intelligence technology to constantly scan the web for threats to your identity. No human can be dedicated like that 24/7.
Other Ways to Prevent Identity Theft
Identity theft is a growing type of crime. We always have to be a step ahead of the people trying to take advantage of us. This list of ways to prevent identity theft is not all-inclusive. I’m sure that people smarter than me have developed other methods, and I’d love to hear about them! So if you have another way to prevent identity theft, I’d love to hear about it in the comments!
Melanie launched Partners in Fire in 2017 to document her quest for financial independence with a mix of finance, fun, and solving the world’s problems. She’s self educated in personal finance and passionate about fighting systematic problems that prevent others from achieving their own financial goals. She also loves travel, anthropology, gaming and her cats.