Monday, December 17, 2007

You can stop Identity theft

Just finished buying holiday gifts online and made payment for your purchases with a debit card or credit card, but what did you do to protect yourself against identity theft?

Maybe not much — most people rarely do anything, if ever, look over their shoulder before handing over their credit card. Most of people don't bother to double-check that a Web site is secure before typing in the digits. But with an estimated 10 million cases of identity theft each year, is asking for a little attention to be paid protect your personal information and your money, safe.

Yes there are more ways to protect your identity theft. There are credit-monitoring services, which can cost more than you feel like spending with the holiday bills rolling in. Also, reviewer argue that they may not be all that effective either, since they're somewhat similar to a fire alarm — it can alert you to a bad situation, but often just a bit too late.

Till now the best solution we have is probably the security freeze, which has been recently made available nationwide by all three credit bureaus. It's basically a padlock for your credit report and perhaps the best way to keep from becoming a victim.

"A credit freeze is an order to the three credit bureaus — TransUnion, Experian and Equifax — that you do not want them selling your personal information to any third party. What this does is make your credit report unavailable to banks, credit card companies, utility and cell phone companies — anyone who might want to look at your credit report before issuing credit," explains Scott Mitic, CEO and co-founder of TrustedID, an identity-theft protection service. If lenders can't see your credit report, they can't issue a thief credit in your name.

But there is negative aspect, is that unless you lift the freeze, you can't get credit either. So is it worth the hassle? Here, a briefing on security freezes and other ways to keep your identity to yourself.

Weigh the cost
The fee for a security freeze will vary state by state, but $10 per bureau seems to be the norm. (Unless you've already been a victim of ID theft, then it's free.)

It would be right to put a freeze on your file at each of the three credit bureaus, otherwise it would be like contacting just one is akin to locking the front door of your house, then leaving the back and side doors wide open. So now we're at about $30. If you have to lift the freeze because you need a new car or want to apply for a mortgage, it's another $10 a pop. Deciding whether it's worth the $60 bucks (more if you have to repeat the process) is really a matter of looking to the future. If you're happy with your house and car, and don't foresee a need for any additional credit cards or loans in the next several years, it may be worth it to place the freeze.

But if your situation is at all in halfway house — say you've just graduated from college, for example, and may be shopping for a home soon — you're probably better off fighting the identity theft battle another way.

Know yourself
Credit freezing help you, they force you to stop and think before spending money you don't have. It might take a few days for the freeze on your credit report to lift, which is long enough for you to decide you don't really need that department store credit card after all. But if you're not the kind of person who plans in advance, you may find yourself in a sticky situation if you forget to lift the freeze and need access to credit immediately.

Then there is a fraud flag. It's basically a note, attached to your credit report by all three bureaus, requesting that lenders contact you by phone before issuing credit in your name. One plus to a fraud flag over a freeze is that it's free. It's also a lot easier to manage than a freeze, but it might not turn out to be quite effective as freeze.

"It's not foolproof," says Mitic. "It's not as safe or as guaranteed as a freeze because you're counting on tens of thousands of different lenders to correctly see this note, correctly call you and correctly verify your identity." Still, lenders are by law required to read and respond to a fraud flag, so it's definitely worth a try.

Arm your computer by updating anti-spyware and anti-virus software. It is always worth the investment. For about $30, you'll protect yourself against programs that can worm into your computer, scan the hard drive for your personal information, and then send the findings into the waiting hands of thieves.

Careful ness is the best way to be protected. If you can't stop an identity theft — and all the protections in the world may not be enough, frankly — you can at least catch it early on. The crime generally comes with one or two red flags.

"If you start to get bills from people or companies you've never heard of, it's a strong sign that someone is impersonating you," says Gail Hillebrand, a senior attorney with Consumer's Union. She also advises to have a closer look to the details of your credit card and bank statements for any suspicious charges, something that is particularly important at this time of year, when we've spent more money than usual at places we may not normally shop. Any charges you don't recognize, no matter how small, should be disputed with the bank or credit card company.

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