12 Tips to Prevent Identity Theft

Identity theft is very much in existence and is a federal offense. It is not something that paranoid people worry about, but is a crime that has affected more than 250,000 Americans in the year 2009 alone. Of these 17 per cent were subjected to credit card fraud, another 16 per cent to documents/benefit fraud, 15 per cent to phone/utilities fraud and 13 per cent to employment fraud. 10 per cent were subjected to bank fraud and 4 per cent to loan fraud. By statistics alone, you have excellent reason to be careful.

Identity theft offenders steal some one else’s identity to meet their own ends; either for economic purposes or for committing some other sort of crime. These criminals make use of your social security number, bank account or credit card number, telephone calling card number and similar identity data. You could end up losing your money, your credit record, financial reputation and even social reputation and standing as well if the thief does some crime in your name.

The thieves usually get information by methods such as stealing your wallet, mail or purse. They may also get personal information from you by posing as credit card companies or legitimate companies. They may even steal information from businesses or use bribes to get the information. Some identity theft victims have claimed that the theft was done by people known to them. This is why you need to be very careful.

Here are a few tips that can help you avoid identity theft:

1. Shred Documents Containing Financial And Personal Information after Use. The information in there can get into wrong hands and be used to steal your identity. Somebody doesn’t have to break into your house or steal your mail to get their hands on your personal and financial information. Instead, a seemingly harmless credit card statement or other document thrown in the trash can be picked up by anybody as they walk down your street on trash day. You don’t need anything fancy, but a 30 dollar shredder will at least help minimize the chances of somebody getting their hands on your important information and could prove to be priceless.

2. Protect Your Social Security Number, Passport And Bank Cards. This should go without saying, but don’t carry these around. Don’t write your social security number down and carry it in your wallet and don’t carry a bunch of credit or debit cards around if you don’t need them. Keep your Social Security card and passport locked up and only bring them out if you need them for something. And when you’re carrying credit or debit cards, only take the ones you plan on using with you. A lost or stolen purse or wallet can be a financial nightmare.

3. Do Not Give Out Personal Information To Anybody Over Phone, Mail Or Internet. Unless you have initiated the contact, in which case you can be sure of the person at the other end, don’t give people sensitive personal or financial information, not even to somebody claiming to be calling from your bank (your bank will already have the info). They may ask for a piece of identifying information, last four-digits of your Social Security number or part of an account number, but they shouldn’t be asking for every little detail. If someone calls you to offer credit cards or any other offer, ask them to provide you with a written application. If your bank or any other financial institution calls you and begins asking more information than you’re comfortable giving out simply hang up and call them directly and then ask about why they were calling to make sure it is a legitimate request.

4. Secure Yourself While Using Internet. Use firewalls, anti-spyware, anti-virus and other protection on your computer. Keep them updated and download new versions as they become available. Also, type in known web addresses and do not click on links in unsolicited mails. The number one method of identity theft is through the web. Thieves prey on people who click links in spam emails and who visit illegitimate websites. So, just be aware of what you’re doing online. If you’re using a wireless network at home be sure to secure it with the strongest method possible. I can’t tell you how many people are using completely unsecured networks just in my neighborhood alone. Take a moment to read through your router’s manual and set up the proper security. Otherwise smart thieves could be monitoring your internet connection.

5. Use A Password which is Difficult to Guess. Another obvious tip, but it needs repeating because of how common the problem is. Don’t use something obvious like your’s or your mother’s maiden name, date of birth, digits of your social security number, and so on. After working in tech support for a number of years I can’t tell you how many times people would use overly simple passwords. Just because it’s long doesn’t mean it’s secure. Also, be sure that nobody is watching you while you type in your password and don’t type in sensitive passwords on public computers.

6. Keep Your Info Secure. If you share your residence with some one or employ some one for service, keep your personal info such as passport, social security number, checkbooks, and anything else of value locked up. Sure, you might not think the plumber is a bad guy, but while he’s down fixing a pipe he might also be snooping for account numbers. Invest in a personal lock box or filing cabinet to keep the majority of your important financial documents secure.

7. Protect Your Data From Radio Frequency Theft. Your documents such as credit cards and passport may have tags which makes them susceptible to theft using radio frequency (RFID). Use metal lined wallets or invest in a protective shield for your cards. While not an incredibly common type of theft right now, it is becoming increasingly important to protect this type of data.

8. Cancel Credit And Debit Cards If You Lose Them. Even if you think that you have just misplaced them, it is better to inform the bank or issuer immediately. Every minute your card is missing is a minute a thief could be racking up charges. Sure, you may not be liable for the charges anyway, but it’s still a hassle to deal with fighting all the charges. When you notice a card missing just call your bank and let them know. At the very least you can place a temporary hold on the card so that if you do find it you can turn it back on with ease.

9. Inspect Your Credit Reports, Financial Statements And Bills. Peruse your bank statements, bills, credit report, and mail for irregular activity such as transactions or purchases you did not make; or credit denials which cannot be normally explained. You are allowed a free credit report at least once a year. Make use of it. If you already used your free annual credit report and suspect there may be a problem you can always pay a small nominal fee for another report. It’s better to spot a problem early rather than find out too late.

10. Maintain Meticulous Records Of Your Financial Transactions. These will help you identify any discrepancy in your statements immediately. I know it’s easy to get into the habit of just glancing over a statement before shredding or trashing it, but take a few minutes each month to really look things over. A thief who has your information may simply be doing test transactions that amount to little more than a couple of dollars and could go undetected for months before they wipe out your entire account.

11. Have Your Mail Held At Local Post Office While Traveling. Your mail can be stolen and the info used for stealing your identity. If you take a little vacation you should schedule a hold for your mail. This ensures no mail is delivered and left sitting in your mailbox while you’re away. It may be tempting to have a friend or neighbor get your mail for you, but it’s better to play it safe and just have the post office hold it. It doesn’t cost anything and it’s the most secure method of holding your mail.

13. Use a Private Area If You Need to Pass Financial Info Through Telephone. Cell phones are our lifelines. We take them everywhere we go and conduct most of our business over the phone. While in a public place be mindful of what you’re saying. What could be a seemingly harmless conversation could be providing an eavesdropping thief a ton of information to be used against you. Take a moment to step outside or into a less-crowded place before talking about anything personal or financial in nature.

Following these tips should protect your from identity thefts in most cases. If you do find any discrepancies, close any unauthorized accounts, inform banks, and file a police report. Report your complaint to Federal Trade Commission. Prompt action will help immensely in a situation like this.

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America’s new debtor prison: Jail time being given to those who owe

Debtors prisons were federally abolished in the United States in the 1800’s, yet in certain states, they seem to be making a comeback. Out of Minnesota come disturbing reports of Americans being thrown in jail due to outstanding bills — sometimes for as little as $85. The Star-Tribune of Minneapolis profiles a number of people who say their debts got them jailed, including Joy Uhlmeyer a 57-year-old patient care advocate who was pulled over on her way home from visiting her elderly mother and put in jail for a night for missing a court hearing about unpaid debt.

The Star-Tribune reviewed the state’s court documents and found that arrests like Uhlmeyer’s are up 60% in Minnesota over the past four years. And Minnesota isn’t the only state where this is happening. It’s a turn of events Ed Mierzwinski, consumer program director at advocacy group U.S. Public Interest Research Groups (or PIRG), calls a “very bad situation for consumers.” Mierzwinski attributes the practice to “bottom-feeder debt collectors [who] are very aggressive.”

People who are imprisoned for their debts are technically locked up for contempt of court after failing to appear for a hearing pertaining to their debt. It’s a legal loophole that debt-collection companies are increasingly using. Here’s how it works: First, the collections company files a lawsuit against the debtor, which requires them to appear in court. If the debtor doesn’t show up, the creditor wins a default judgment against them. This allows them to ask the court to schedule another hearing at which the judge can go through the debtor’s assets and determine if actions such as wage garnishments or bank account seizures can take place.

If the debtor doesn’t show up to that hearing, the hammer of justice can come down hard and fast. From there, the judge can order the debtor in contempt of court and issue a warrant for their arrest. If this seems unnecessarily punitive, the price to get out of jail is even more so, say consumer advocates: Generally, the judge sets the cost of bail at the amount of the disputed debt, an amount which is then turned over to the creditor.

“This is the private use of government resources to collect debt,” Pete Barry, partner at law firm Barry & Slade LLC, told Walletpop. One of Barry’s clients was arrested at her workplace for not filling out and sending back a form demanded by the creditor. The client, Barry says, suffered the humiliation of having to have her boss come to the jail and post a bond before she could be released. The bond money, he added, was turned over to the creditor. “They’re using the court system as their collection agent,” he says.

“There are big issues,” says Ira Rhinegold, executive director of the National Association of Consumer Advocates. “Minnesota isn’t the only place it’s happening, but it seems to be the worst. They’re leading the way,” he says, noting that NACA has heard similar stories out of Wisconsin, New Jersey, Arkansas and Washington.

Rhinegold tells Walletpop that some unscrupulous debt collectors never even send debtors the required notification that the case is being taken to court. Then the debtor fails to show up and the collector wins a default judgment, which can pave the way for imprisonment until they post their bond.

What’s behind all of this? “In some ways it stems from the growth of the debt buying industry,” says Rhinegold. Collection agencies buy debt for pennies on the dollar, then hire lawyers to chase after even the smallest amounts. Of all of the unfair aspects of this chain of events, advocates say the most galling is that, in many cases, consumers may not even be legally responsible for the debts for which they’re being jailed. In fact, the debt may not even be theirs, the amount may be inflated by penalties and attorney’s fees, and it’s almost certainly been written off by the original creditor — who then resold it for pennies on the dollar to a debt-collection firm that plays hardball to get money from consumers. Often, says Rhinegold, the collector doesn’t even have the paperwork that would prove that existence of the debt. In these cases, the judge will dismiss the case against the debtor. All the debtor had to do was show up for their day in court.

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For this reason, Gail Hillebrand, financial services campaign manager at nonprofit Consumers Union, says it’s vitally important for consumers to respond if you get a letter threatening legal action and requiring a court appearance. The name of the collector can change because of how often debt is resold, she warns. So if you have an outstanding debt, don’t assume that a notice that seems to come from a different company than the original lender is junk mail. “The problem is that people don’t realize what it is,” she says.

It’s important to do some research first, though. If the debt isn’t yours, you can dispute it. Even if it is, showing up to court can sometimes lead to an outcome in your favor if the collector can’t prove you owe the debt. Either way, it will keep you from being hauled off in handcuffs.

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