Preventing Identity Theft Can Save Your Recovering Efforts

This section is necessary if you want to recover from bankruptcy. A credit monitoring service can help with this. However there are other things that can help you in your fight. When you have declared bankruptcy, you do it to get a second chance. This cant happen if your identity is stolen from you. This will be a larger section as it covers a big aspect of keeping your credit on track.

The crime of identity theft is on the rise big time. Recent surveys show there are currently about 9 million victims each year. How it works is that criminals steal Social Security numbers, driver's licenses, credit card numbers, ATM cards, calling cards, and anything else they can get their hands on that offers your information. They use this information so that they can impersonate their victims, spending as much money as they can in as short a time as possible before moving on to someone else.

Right now there are two basic types of identity theft which are:
Account takeover: this happens when a thief gets a hold of your current credit account information and purchases products and services by using the actual credit card or just the account number and expiration date, and back of card code.

Application fraud: this is also called "true name fraud." The thief will use your SSN and other ID information to open new accounts in your name. This takes a lot of time to hear about unless you have a credit monitoring system working for you.

Generally, victims of credit card fraud are not liable for more than the first of the loss (Lending Act, Fair Credit Billing Act,15 USC sec. 1601). Most of the time, the victim will not be required to pay any part of the loss; however debit card users have less protection against fraud.

When this fraud happens; your accounts will be wiped out, but you could be liable for the total amount of the loss depending on how quickly it is reported (Electronic Funds Transfer Act,15 USC sec.1693).

Even though most victims are usually not stuck paying their imposters' bills, they are often left with a bad credit report which can be horrible if you just went through a bankruptcy. Meanwhile, you will difficulty getting credit, obtaining loans, renting apartments, and even getting hired at a new job. In fact, you cant take advantage of all of these efforts to help you learn to rebuild your credit when a fraud takes place. Do you see now why this section is so important?

Victims of identity theft find that the police cant do much to help you either, as it can be hard to prove that the fraud took place. Stealing wallets used to be the best way identity thieves obtained Social Security numbers (SSNs), driver's licenses, credit card numbers and other pieces of identification. Now they have many ways of getting your information without you knowing about it at all. Here is how:

"Dumpster diving" in trash bins is common. Thieves look for un-shredded credit card and loan applications and anything else that would contain SSNs.

Stealing mail from mailboxes which can give them access to brand new credit cards, bank and credit card statements, pre-approved credit offers, investment reports, insurance statements, and even tax information.

Accessing your credit report is easily done if the thief is an employer, loan officer, or landlord.

They can get names and SSNs from personnel or customer files in the workplace.

Shoulder snatching at ATM machines, direct debit purchases and phone booths is an easy way to get your pin numbers.

Internet sources, such as via public records sites and fee-based information broker sites.

Sending emails from your banks that asks you to visit a web site that looks like the banks in order to confirm account information. They call this phishing and it gets more popular every day.

You cant prevent identity theft in every case as identity theft is relatively easy because of lax credit industry practices, careless information-handling practices in the workplace, and the simplicity that goes with getting SSNs. But you can reduce your risk of fraud by following the tips in this section.

The most important advice I can give you is to check your credit report at least once a year. You can catch the fraud quicker this way. Here are some more tips to help you.

Credit cards, debit cards, and credit reports:
1. You have to lower the number of credit and debit cards you carry around every day in your wallet. I would recommend that you do not use debit cards at all because of the potential for shoulder snatching anyway. Instead, you should carry one or two credit cards and your ATM card in your wallet and that is it. Debit cards may be popular but you have to take advantage of online access to your bank account to monitor account activity frequently. Report anything strange quickly.

2. When you are using your credit and debit cards at restaurants and stores, pay close attention to how the magnetic stripe information is taken. Dishonest employees have been known to use small hand-held devices which are called skimmers to quickly swipe the card and then they download the account number data onto a personal computer later on.

3. Do not use debit cards when you are shopping online. Use a credit card because you are better protected in case of fraud.

4. Photocopy of all your credit cards, debit cards, bank accounts, and other financial information such as the account numbers, expiration dates. Just dont carry it around with you in your wallet or purse. This way if the information is stolen, you can report it.

5. Never give out your SSN, credit or debit card number or other personal information over the phone, by mail, or on the Internet or if you are the one that initiated the telephone call.

6. Always take credit card receipts with you whenever you get one. Never toss them in a public trash container. Remember also not to carry them in the shopping bag.

7. Never allow your credit card number to be written onto your checks.

8. Watch the mail when you expect a new credit card to arrive.

9. Order your credit report at least once a year.

10. Get a free credit report from Equifax, TransUnion, and Experian

11. If your state allows it freeze your credit reports. By freezing your credit reports, you can prevent credit issuers from accessing your credit files except when you give your express permission. In most states, security freezes are available for free.

12. Several companies offer credit monitoring services for an annual fee ranging from -0 a year like I said above, take advantage.

13. There are many identity theft insurance products that you can use. I dont recommend them unless they are free or a cheap add-on to an existing insurance policy.

14. When you are dealing with passwords and PINs, do not use the last four digits of your Social Security number, birth date, middle name, consecutive numbers or anything else that could easily be found out by thieves. You should think to use passwords that combine both letters and numbers.

15. Ask your financial institutions to add extra security protection to your account. Most will let you use more than one when accessing your account. Again, dont use easy things to figure out. If you are asked to create a reminder question, do not use one that is easily answered by others.

16. Memorize all your passwords. Do not write them down.

17. Cover your hand when you are using an ATM machine or debit.

18. Protect your Social Security number at all costs. Only give it out when it is absolutely necessary. It is this information that the thieves are looking for. If a business asks you for your SSN, you should ask if there is an alternative number that can be used instead. Ask to see the company's written policy on SSNs.

19. Do not have your SSN or driver's license number placed on your checks. This may sound like a given, but you would be surprised how many people do this.

20. Do not say your SSN out loud in public. Dont let anyone say it out loud either.

21. Examine your Social Security Personal Earnings and Benefits Estimate Statement each year.

22. Do not carry your SSN card in your wallet unless you know that you will need it. Photocopy your cards instead and then make them wallet size.

23. If you live in a state that uses the SSN as your driver's license number, I would tell you to simply ask for a different number.

24. Use a firewall on your home computer which will help to keep hackers from getting hold of your personal identifying and financial data from your hard drive. This is especially important if you are using DSL or cable modem.

25. Install and update virus protection software to prevent a worm or virus from causing your computer to send out files.

26. Password-protect any of your files that contain personal information like, such as banking information and credit card info.

27. When shopping online, do business with companies that provide transaction security protection such as Verisign and read their privacy policies.

28. Before you get rid of your computer, use a wipe out utility program. Delete is just not good enough.

29. Never respond to email messages asking for your personal information, no matter who they are from. Your bank will not ask and if they do call them instead.

30. Be aware that file-sharing and file-swapping programs like Ares, Morpheus, and Kazaa.

31. Never carry extra credit cards, debit cards, your Social Security card, birth certificate or passport in your wallet or purse.

32. If possible, do not carry other cards in your wallet that contain the Social Security number (SSN), except on days when you need them.

33. If you want to lower the amount of personal information that out in cyber space you can do these things:
-Take your name off of marketing lists of the three credit reporting bureaus which are Equifax, Experian, and TransUnion;
-Sign up for the Federal Trade Commission's National Do Not Call Registry;
-Sign up for the Direct Marketing Association's Mail Preference Service.
-Have your name and address removed from the phone book and reverse directories.

34. Install a mailbox that you can lock at your house. Or use a post office box or a commercial mailbox service.

35. When you are ordering new checks, pick them up at the bank. Don't have them mailed to your home.

36. When you pay bills, never leave the envelopes that have your checks or money orders in them at your mailbox for the postal carrier to pick up.

37. Each month, you will want to review your credit card, bank and phone statements

38. Try to make as many of your bill payments through automatic deductions from your checking account or use internet banking and pay them yourself.

39. Do not throw out pre-approved credit offers without tearing them up.

40. Use a gel pen for writing your checks because it has been stated that gel ink contains tiny particles of color that are trapped in the paper, so it is very difficult to wash the check and re-write it.

41. You must demand that financial institutions keep your data safe. Dont let your bank use easy to decode numbers on your cards. If you have been given the last four SSN digits as a default PIN, change it to something else immediately. Insist they destroy paper and magnetic records before getting rid of them.

42. When you fill out loan or credit applications, ask how the company disposes of them. Some auto dealerships, department stores, car rental agencies, and video stores have been known to be careless with customer applications once they are finished with them. When you pay by credit card, ask the business how it stores and disposes of the forms. When you do this online, be sure the company uses secure transmission and storage methods.

43. Store all of your canceled checks in a safe place. If you rent a storage locker, take extra precautions when you are storing cancelled checks, tax return information, and other sensitive financial information. Thieves love these.

44. Store all of your personal information in your home, especially if you have roommates.

45. Any company that handles personal information should train all its employees, from top to bottom, on responsible information-handling practices.

This information was adapted from http://www.privacyrights.org