This is a guest post by Prosper member poppadollars.
A lot has been written about identity theft the last few years. Many people are concerned, and rightly so, that someone will hijack their good name and credit and abuse it. Typically, someone will discover the problem after some time has elapsed and problems have mounted to the point their credit has been seriously impaired. Maybe they apply for a loan and are rejected when normally they would have been approved. Maybe a collection agency contacts them about a delinquent account they never heard of.
Maybe a credit card statement they have routinely received fails to show up in the mail.
After further investigation they may discover loans and credit cards obtained in their name they never applied for or had thrown in the trash. In some cases it may appear that someone has created a whole new life at another address based on their name and credit history.
How can you discourage identity theft?
- Check your credit reports from all three reporting agencies at least once a year (it is free). Follow up on any suspicious activity or accounts you do not recognize.
- Reconcile your bank and credit card statements each month and follow up on any unusual transactions.
- If your mailbox is accessible from the street, rent a PO box and have your bills sent to the PO box (or pay them on-line). This will avoid the bulk of the offers that come to a box on the street where anyone can easily divert them to their own use.
- Buy a shredder and shred anything that has your name and account information on it instead of discarding mail in the trash. It is too easy for someone to dumpster dive and pull your financial information.
- When using your credit card only deal with reputable merchants. Use third party payment options like eBay’s “Paypal” service or a service from your credit card company to pay for items on-line without disclosing your account information to the vendor.
- Never give out personal or financial information over the phone or on-line to someone who has cold called you. Ask for a name and phone number. If they claim to be from someone you normally deal with, obtain the phone number independently through the phone book or other means to make sure you are calling who you think you are calling. Do not click on the links sent in e-mails to access contact web sites. It is very easy to create a web site that looks authentic, but is not the company you think you are dealing with.
- When you mail checks to pay bills, place the envelope in the post office or a collection box, not a mail box accessible easily from the street by anyone in a vehicle. Checks can easily be altered.
Sometimes we joke that the best identity theft protection is to run all your credit cards to the limit and borrow as much as your are able. That way your identity is not worth stealing, but a better solution is to be vigilant and take some routine steps to make yourself less accessible a target.