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Top 6 Ways to Reduce Identity Theft

This past week, I've heard the phrase "I never thought it would happen to me" more than ever before. A rather crafty scam artist took a list of names and phone numbers and started sending multiple phishing texts and phone calls to my clients and others across the nation. Because of the timing and persistence of these points of contact, many people were tricked into entering their card number and pin. Now before you go thinking you would never provide such information to somebody, let me tell you that the methods of this scammer were quite convincing in many instances. Luckily, we are positive the list was not secured via our database, so no sensitive information was compromised, but the growing risk of identity theft has never been more apparent to me.According to Javelin Strategy & Research reports, there were over 8 million cases of identity theft in 2010, resulting in an average of $630 per victim in out-of-pocket costs on top of the damage to their ever-important credit scores. With 10 percent of the US population falling victim during the past 3 years, it appears it's becoming harder and harder to avoid identity theft without a little more personal effort from each of us.

 

Top 6 Ways to Reduce Identity Theft

1. Never respond directly to information seekers - If you receive a text, email, or phone call asking for specific information, don't respond. Instead, contact the institution yourself and then give the information to the correct employee.

2. Don't assume it will never happen to you - Place a hold on your mail when you leave town, and take that social security card out of your wallet! The truth is, identity theft does happen, so keep the important information somewhere safe.

3. Keep your personal information personal - We receive an inordinate amount of mail, including junk mail & credit card offers, with varying degrees of sensitive information. Invest in a shredder. Tearing a form in half and tossing it doesn't keep a fraudster from reproducing that form and submitting it. Shredding those documents means you have a better chance the thieves will move on to your neighbor whose documents aren't in a million pieces.

4. Passwords - You've heard it before, but do not use the same password for every account! Especially financial accounts! You can guarantee that if one account is compromised, a hacker will try every other account he can think of. Even slight variations of the same password could save you from a headache and thousands of dollars in losses.

5. Know the details on your credit report - Twenty percent of victims don't learn their identity has been stolen for four or more years! Tens of thousands of dollars in damages and weeks of diligent repair work could be avoided through checking your credit score on a semi-regular basis.

6. Be vigilant - You don't need to be paranoid, but be careful. Review your bank and credit card statements each month, keep up-to-date on the various scam tactics, and be aware of your surroundings. Even more, investing in identity theft protection can provide an extra layer of security for those that may be especially at risk. As they say, an ounce of prevention is worth a pound of cure.

Photo credit: Shutterstock / John Kwan

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Logan Abbott's picture

Logan Abbott is a personal finance and credit card expert with over 5 years of experience writing about each topic. He is a graduate of the USC Marshall School of Business, and also contributes to other online finance publications. He has been quoted in the New York Times, San Diego Union Tribune, TheStreet, and more.

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