Protecting Against Identity Theft

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Protecting Against Identity Theft

Learn how to limit with the amount of your personal information that´s available to the public.

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I am considering going to a mostly cash basis with the passage of the Homeland Security bill. I have nothing to hide, but I just feel uncomfortable with the potential for abuse. Have you any thoughts about privacy?
Anna

Anna has lots of company. Many people are concerned with the amount of their personal information that's available. Computers can store and correlate an awful lot of stuff about us.

Current federal government plans call for law enforcement to assemble databases of all credit card transactions and other personal data. Their goal is to look for patterns that could help them identify terrorists.

Anna makes a valid point. Any time that you have that much information available there is a potential for abuse. Formal government misuse would cause a huge outcry and is probably unlikely. But that doesn't mean that a rogue bureaucrat couldn't make unauthorized use of the database.

We're not going to get into whether it's a good idea to trade privacy for terrorism defense. That's a political discussion. But we will try to give Anna more information so that she can decide how to react with her personal data.

Before Anna decides, it's important to note that government use of your personal records is only the tip of the iceberg. Direct mailers, credit card issuers and other corporations have been collecting the same type of data for years. So the government is only accumulating what already exists.

A third group poses the biggest threat. Criminals have learned to take your personal information and use it to commit identity theft. In 1998 that was made a federal crime. Over 1 million people will be victimized this year. The Federal Trade Commission says that identity theft is the fastest growing crime today. Estimates say the costs are over $10 billion a year.

The next thing is to consider what 'abuse' Anna is concerned about. Would the government use the information it collects about her? If not, is she harmed just because they have it?

In some ways, we're returning to a level of privacy that we had 50 or 75 years ago. At that time, the local grocer knew what breakfast cereal you ate and how much you spent on groceries. Even in large cities you had neighbors who observed a lot of your habits.

So what should Anna do? She may decide that she just doesn't want other people to know what she buys and does.

The best way to limit the amount of information available on her is to avoid credit cards. That will be inconvenient. She'll probably need to open a bank account to turn her paycheck into cash. The bank will require information to open the account. So she still will have some files outstanding.

She'll also find that cash isn't accepted everywhere. It will be difficult to buy airline or other tickets. She'll need to pay utility bills in person or with a cashiers check. That takes time.

There is a reason people use checks and credit cards. They're convenient. Anna will have to decide whether the additional privacy justifies the extra effort.

She may choose to continue to use credit. If so, there are steps that she can take to keep privacy problems to a minimum.

First, find out how information will be used before providing it. Do not give out personal information by phone, mail or in email unless you initiated contact with the organization. Be wary of anyone trying to get your Social Security number, bank account information or other personal information. Especially if they contacted you first.

Many places will try to use your Social Security number as an identification. Even though that is a common practice today the law that started Social Security made it illegal. Your doctor's office won't be happy if you refuse to provide a Social Security number, but you're not required to do so. Their record keeping software will work fine with a made-up number.

Minimize the number of cards and IDs that you carry. Do not carry your Social Security card or number in your purse or wallet.

Watch for your credit card bills. If they're more than a few days late, contact the credit card company.

Your trashcan can be a fertile ground for your personal information. Get a shredder and use it.

Order a credit report from all three credit reporting agencies at least once a year. Make sure that you know about all the accounts listed in your name. You can order a report for a nominal fee at Equifax: 800-685-1111; Experian: 888-397-3742; and Trans Union: 800-916-8800.

Only Anna can decide how much energy she wants to devote to protecting against identity theft. There's no doubt that it gets harder every year. Hopefully Anna will find a balance that's acceptable to her.

________

Gary Foreman is the editor of The Dollar Stretcher.com website and newsletters. You'll find thousands of articles to help stretch your day and your dollar. Visit Today. Read More: http://www.thedollarstretcher.com

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