Make These Small Changes in Everyday Habits to Reduce the Risk of Identity Theft

It may never be possible to entirely eliminate the risk of identity theft. But you can make it harder for the thief to get to your identity. Hopefully, hard enough that he goes looking for some other easy victim and leaves you alone. At the very least, make sure you don’t serve up your identity to the thief on a silver platter. Here is a checklist of some of the small changes in every day habits that can reduce the risk of identity theft significantly.

Shred any documents containing personal information before throwing them away.

You can get paper shredders for as low as $7.40. And yet, I am surprised how many of my friends don’t use them! The mail you throw away everyday is a gold mine of information for an identity thief. Your bills and statements can provide a lot of personal information. If you have any pre-approved credit-card applications, the thief can easily open a new account with his/her address and you may never even find out about it until you apply for a loan and get rejected! If you can afford it, get a cross-cut (or confetti) shredder. If not, at least buy a cheap strip-cut shredder and make it a habit to run any papers with personal information through the shredder.

Be conscious about the places where you leave your personal information lying around unconsciously.

Most of us do not leave personal information lying around consciously. Its times when we are not consciously aware that can come and bite us in the back later. For instance, I had a bill that needed to be taken care of during business hours, a time when I am usually at work. So I took the bill with me to work but after paying it off, I put it in my desk drawer. Usually my desk drawer only has a bunch of office supplies and so I never really lock it. Over a period of time, several bills stacked up there. Recently, when I was cleaning my desk, I realized my mistake and brought it back home with me to be shredded. I don’t know how many people had access to that drawer in the mean time, and I sure hope to god, none of them bothered to open the drawer and look for forgotten bills! Watch out for such unconscious mistakes. Other common mistakes – leaving your wallet in insecure lockers at the gym, leaving your papers in your car where they can be read or stolen easily, leaving mail with your personal information in an unwatched “out” tray for pickup, leaving your computer unlocked when you step away from the desk, etc.

Do not carry more than 2 to 3 credit or debit cards in your wallet.

According to the myFICO website an average consumer has a total of 13 credit obligations on record at a credit bureau, of which 9 are likely to be credit cards. If you are an average Joe with 9 cards, I would recommend leaving 7 of your cards at home in a safe place. That way if your wallet is stolen, it will be a lot easier for you to contact your credit card companies in a timely fashion and put a hold on your accounts.

Check if the credit card receipt before discarding it away.

We have a small local deli near out office. The food is good and it is quite convenient to go there for lunch. After paying for my food, out of habit I routinely checked my credit card receipt before throwing it away. To my surprise, my *whole* credit card number was printed on it! Not many people realize that some older credit card machines still do this. And since the bill is usually for a small amount, they just throw away the receipt without paying too much attention. How much easier can it get for a thief looking for a credit card number?

Check your bills carefully.

This is in general a good practice – not just for preventing identity theft but even from a personal finance perspective. When you receive your monthly bills, make sure you look through all the charges. For an ID theft perspective, make sure that it was you that actually made those charges. A charge that you did not make could be the first sign of victimization. By taking immediate action, you may be able to nip it in the bud.

Be careful about information given on the phone.

First off, never give out any information unless *you* initiated the call. Second, before giving out the information, check what it is for. Especially, if the request is for your SSN, check if you can use some alternate number, and unless it is absolutely necessary do not give away your SSN. Third, make sure you are not within someone else’s earshot when you call out your SSN, credit card number, your mother’s maiden name, etc on the phone. Finally, do not have the person repeat back the information to you, since you don’t know who is within the earshot of that person.

Be careful while using debit cards at ATM's, grocery checkout counters, gas stations etc.

Watch out for "shoulder surfers" who can memorize your card number and the pin and have easy access to your money. Do not hold out your debit card in a position that it may be easy for someone to read the numbers. Shield the keypad with your body while you enter your pin. Do not hesitate or be shy to tell a person to back off if they stand too close to you wile your enter your information.

Utilize the security options provided by your credit card!

As soon as you get a new credit card, sign the back of it. I don’t know how much this helps though. A quick detour for a short story: Both my friend and I used to have a similar credit card. At a restaurant we both paid using our credit cards. When we put it away though, somehow the cards got exchanged. We used the other person’s card for two full days without either of us, or any of the cashiers noticing it. When the monthly statements came we checked to see if the credit card company had realized that the bills were signed by an entirely different person, but there was no notification. So, yes, the signature is out there to protect you. But no, it does not always do so. So if possible try and get a card with your picture on it. And when possible set up security questions for which the answers are hard to guess.

Freeze your credit report if possible.

Some states allow the credit report to be frozen. Here is a list to check if your state offers this. If so, consider freezing your credit report. What this does is, it prevents anyone from accessing your credit files unless you give explicit permission by unfreezing your account for a short period or by providing access to a particular credit. This can prevent a thief with your personal information from opening an account with your SSN and running up a huge debt.

Obtain your credit report from each of the three major credit bureaus once every year and review them thoroughly.

By law, you can get a free copy of your credit report each year from each of the credit reporting agencies. Since there are three credit agencies, once every 4 months, request for a copy from one of the bureaus. If you are unfortunate enough to be a victim, at least make it a little easier on yourself to recover by catching on as early as possible.

Do not use unlocked mailboxes.

Which one do you prefer? An ornate and pretty old-fashioned mail box in front of the house or the ugly post office installed box at the end of the street? Ugly it may be, and a lot farther from your home – but a post office installed mail box can be a lot safer than an old-fashioned box in front of your house. If you have to use a mail box in front for the house, make sure you install a locked box which is harder to tamper with. Also, before going away on long trips make sure you have your mail held at the post office.

Protect your computer

Set up firewalls. Install and regularly update your anti-virus software. Protect any files with sensitive information either with a password or encrypting them. Have a separate “guest” account for use by guests. Disconnect Internet connection when not using it. With so much of information available on your computer (not just the files you save, but cookies and other information that is saved without your knowledge also), think of protecting your computer in the same terms as protecting your home. Would you leave a door or window open? What kind of locks and keys would you use? Who would you let in? Did you realize that when you downloaded that freeware, the thieves may have installed a back door?

Be careful while creating and managing passwords (and PIN numbers).

Make it a habit to choose passwords and PIN numbers that you can remember without writing it down, but at the same time it is hard for someone to guess. Do not use birth dates, anniversaries, SSN(!), mother’s maiden name etc in your password or PIN. An easy way to make a password that is difficult for someone else to guess but easy for you to remember is to use a combination of small and capital letters along with numbers and symbols (@ instead of a, or $ instead of S, etc). Avoid dictionary words. As part of a computer security class I had taken in school, we chose to evaluate the security of one of the servers as our term project. One of our tasks was to try and crack passwords. I was amazed at how many passwords could be cracked by simple open source software while we enjoyed a cup of coffee and looked on!

Make sure you don’t write down your password. Especially avoid having post-it notes with your password or pin lying around on your table, in your drawer, stuck on the computer monitor, saved in the wallet ( yes, some people do that!!) etc. Whenever I create a new account, I usually mail myself very cryptic clue that will help me remember what password I used, but never actually save the password itself.

Avoid having a shared drive on a personal computer that also has personal information

When I was in school it was very common for everyone to have some sort of peer-to-peer file sharing software on their computer. Many of these software set up a shared drive on your machine. This can easily expose your computer to crooks and hackers. One does not even have to be too sophisticated these days to hack into a computer. Exploits for any computer with any configuration are easily available for download, if you just know where to look (ever heard of script kiddies?). Oh, and flash news – if you have a teenage child at home, you will likely have some of these peer-to-peer software already installed on you computer!

Do not click the links in an email to access you bank, credit card, brokerage account etc.

When you receive mails from your bank, credit card account, brokerage account etc, make it a habit NOT to click on a direct link in the mail. Most financial institutions these days have a policy that they will not send a link to you embedded in an e-mail. So the mail could very well be an attempt at Phishing. So, to be on the safer side, always type in the address directly, or use your stored bookmarks.

Finally, be careful while disposing or selling your personal computer.

This is not something you will probably do everyday, but when you do it, be very wary. I would recommend removing the hard drive before selling or disposing your personal computer. Also make sure you use a scrubbing utility to clean out the hard disk first. Here is a great article with details about scrubbing your hard drive to avoid data theft.

Small changes can go a long way in protecting against identity theft. In the US alone, every year millions are victimized. Take care not to become a part of that statistic!

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