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Identity thieves are poised to strike at any time, but you can limit your exposure to painful financial trouble if you're careful.
ID theft occurs primarily through the misuse of personally identifying information, including Social Security numbers, credit card numbers or other financial account information, according to the Federal Trade Commission, which tracks nearly 9 million reports of ID theft annually. The average loss was $371, according to the latest available data.
An FTC fact sheet on ID theft lists the following ways thieves operate:
- Dumpster diving — seeking bills or other paper with your personal information on it.
- Skimming — stealing credit or debit card numbers by utilizing a special storage device when processing your transaction.
- Phishing — pretending to be financial institutions or companies and sending spam or pop-up messages so you'll reveal your personal information.
- Changing an address — diverting billing statements to another location by completing a change-of-address form.
- Stealing — lifting wallets and purses; mail, including bank and credit card statements; pre-approved credit offers; and new checks or tax information.
One of the best ways to secure your identity is to protect your Social Security number. Tips include not carrying your Social Security number in your wallet and not writing it on a check. Ask businesses why they are requesting your Social Security number, and also ask, "How do you protect my number from being stolen?"
Other ID theft-prevention tips include:
- Use intricate passwords — don't use your mother's maiden name, Social Security number, birthday or telephone number. When businesses ask you for your mother's maiden name, in order for you to sign up for a new account, request that you use a password instead.
- Always type the full-name URL of an organization into the address line of your Web browser. Don't cut and paste a URL from an e-mail.