12 Things You Should Know About Identity Theft And How To Protect Yourself

If you're anything like me, every time you enter your credit card number or write down your Social Security number, you cross your fingers and say a prayer.

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Someone's always watching ... 👀

And while being paranoid sucks, that feeling is well founded as identity theft becomes more and more common.

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According to the Federal Trade Commission (FTC), the number of identity theft reports TRIPLED between 2017 and 2021 (371,000 reports in 2017 and 1,067,000 so far in 2021).

Talk about scary.

To figure out how to avoid identity theft — and what it is — I talked to the big dogs, aka the FTC.

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The FTC is a US government agency whose job is to protect consumers and enforce the law. They're the people you should contact if (knock on wood) your identity is stolen.

The FTC's identity theft program manager, Kelle Slaughter, was kind enough to answer my questions.

1.To start, she explained what identity theft is and how it can be used against you.

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If you're like me, you may throw this term around, but do you know what it actually means?

According to the FTC website, "Identity theft is when someone uses your personal or financial information without your permission. They might steal your name and address, credit card, or bank account numbers, Social Security number, or medical insurance account numbers."

They can then use this information to buy things with your credit cards, apply for new credit cards in your name, open a utility account (gas, phone, electric), apply for loans, steal your tax refund, use your health insurance to get medical care, or even pretend to be you if they are arrested.

Phew.

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2.Keep in mind that identity theft can happen to anyone, and it doesn't always happen because of a misstep you made.

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Slaughter told me via email, "The more people use their personal information, the more chances it could be their information is compromised by no fault of their own."

So while you may be careful about who you share information with and how, she explained, "A person can use a secure app or website to make a purchase and still later find that the company had a data breach exposing their personal/sensitive information."

There's also the sad reality that sometimes close friends and family members (who know everything from your birthday to maybe even your PIN) can use your information to open new lines of credit or get out of trouble with the police (for more horror stories, check this out).

3.To reduce your risk, shred documents with personal information on them and wipe technology you're getting rid of.

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Slaughter suggested that you "shred paper documents. If you’re getting rid of an old computer, be sure to sign out of all your online accounts, and un-pair your computer from Bluetooth devices like your mouse, keyboard, or wireless display. Then erase your computer’s hard drive."

4.Keep your software up-to-date.

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As it turns out, that annoying reminder to "update your software" is actually important. Slaughter said, "Updating software regularly — as soon as possible when a newer version comes out — helps make sure that you have critical patches and protections against security threats."

Who knew?

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5.Avoid giving out your Social Security number and other personal information.

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The more you can avoid writing down or typing in your Social Security number, the better. Slaughter suggested, "You may want to ask why a business is asking for your date of birth or Social Security number or other information. Don’t be afraid to ask why they want it — and to say no if you feel they don’t really need it."

In addition, scammers will pose as employees of the Social Security Administration, IRS, or another government agency and ask for your personal information on the phone, online, or even via snail mail.

Slaughter explained, "The government will never contact you out of the blue and ask for personal information, like your Social Security number, credit or bank account number, or even date of birth. If you get an unexpected call, text message, or email requesting personal information, hang up the phone or delete the message. It’s a scammer."

6.Use a strong password — and consider multifactor authentication — for your online accounts.

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Making sure you have a strong password is obvious, but Slaughter also recommended setting up multifactor authentication, which will require you (and a potential identity thief) to prove your identity by typing in a code received by text or email, or getting your finger or face scanned.

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7.Don't keep personal information in your wallet or on your phone, and cover the keypad when you enter your ATM PIN.

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Be smart about what you carry around with you. Slaughter's suggestion: "Minimize the personal information you carry in your wallet or keep on your phone. Use a pass code, for example, to make certain that if you lose your phone, you don’t also lose the personal information that you’ve stored on it."

And it may seem obvious, but when you enter your debit card PIN at the register or at the ATM, be sure to shield the keypad.

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8.Be wary of what you post on social media.

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Believe it or not, what you share on social media could help a thief steal your identity. As Slaughter explained, "Sometimes people share personal or sensitive information on their favorite platforms. Identity thieves are always watching and may use information they learn."

For example, if you're obsessed with your dog, Waffles, who is 16, the thief may assume that your bank password is some variation of "Waffles16."

9.When you shop online, look for the padlock before the URL, and use your credit card rather than your debit card.

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If you're a big online shopper, look for the little padlock before the URL in the search bar at the top of your screen. According to Slaughter, that will "ensure you are working with a reputable site that uses encryption."

She also recommended using a credit card, rather than a debit card, when you shop online because "if there is a problem, you can dispute or stop payment with your credit card company."

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10.And make sure you review credit and debit card charges regularly, and check your credit reports at least once a year.

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Often, an unknown charge is the first sign of identity theft, so you should review your credit card and debit card accounts regularly to make sure you made all the charges.

"And check your credit reports regularly. You can get your free credit reports by visiting AnnualCreditReport.com. When you get your reports, look them over carefully, and dispute any errors or inaccurate information you find," explained Slaughter, who noted that the three credit bureaus are Equifax, Experian, and TransUnion.

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11.If you suspect something is wrong, freeze your credit and set up a fraud alert.

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Slaughter explained that freezing your credit "restricts access to your credit report. This means you — or others — won’t be able to open a new credit account while the freeze is in place. Freezes are free, and you can easily lift them if you need access to credit."

To set up a credit freeze, contact each of the three credit bureaus — Equifax, Experian, and TransUnion. You can remove the freeze at any time.

In addition, you can place a fraud alert, which provides yearlong protection. A fraud alert will make it harder (though not impossible) for someone to open a new credit card in your name.

To set up a fraud alert, contact just one of the three credit bureaus — Equifax, Experian, or TransUnion (the one you contact will tell the others). The alert lasts one year and can be extended.

12.And if it turns out you are a victim of identity theft, report it to the FTC at IdentityTheft.gov and start your personalized recovery plan.

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Slaughter said, "Generally, we recommend that people visit IdentityTheft.gov, the government’s one-stop resource for reporting identity theft."

Because recovery can vary based on the type of identity theft — it turns out there are more than 30 types, ranging from child identity theft to tax identity theft — you can use the resources at IdentityTheft.gov to figure out next steps and start working toward recovery.

Have you ever experienced identity theft? Share your story in the comments.

And for more stories about life and money, check out the rest of our personal finance posts.