After years of advising corporations, investment firms and being directly involved with helping people understand what identity theft is and making recommendations on how they might thwart criminals from turning them into victims. I decided to revisit the topic and share a simple checklist approach to prevent identity theft.

With just a few simple steps utilizing products and services that we either already pay for already or that are free, we will learn to help ourselves and our loved ones.

I’ve looked at very closely all of the identity theft service providers out there and what has become painfully obvious to me is that the only real product they are selling is fear. They capitalize on consumer ignorance. Like any fear monger, these companies peddle their wares successfully because they know many people never take the time to understand the problem or they don’t know where to start looking and educating themselves. Some of these companies intentionally mislead consumers making a profit from deception.

If you doubt anything I’ve stated, get a second opinion! Spend some quality time with the Federal Trade Commission or even your favorite search engine searching for the names of identity theft companies and just see what you find. Knowledge is your friend and that is precisely what this article is for.

First, what is identity theft?

Identity theft is a serious crime. It can disrupt your finances, credit history, and reputation, and take time, money, and patience to resolve. Identity theft happens when someone steals your personal information and uses it without your permission.

Identity theft occurs whenever an identity thief, possibly a stranger or someone very close to you, uses your personal information without your permission, to commit fraud or other crimes. Armed with information like your name, address, Social Security number or credit card numbers, criminals can cause damage that can cost you both time and money.

The fact is that you could already be a victim and not know it. You may be a victim of identity theft if:

• Your credit score seems unusually low.
• Your credit report contains inaccurate personal information or information about transactions you did not make.
• You are receiving credit cards you did not apply for.
• You are not receiving all your mail, specifically bills and financial accounts.
• Banks or finance companies are denying you credit, or only offering you credit with very high interest rates.
• You are being contacted by collection agencies for credit accounts you did not open or merchandise you didn’t buy.

An interesting point to mention about all of the ID theft companies is that the only way they work is if you load up into their online systems the very information you are trying to protect. You will be required to input every credit card number, bank account number, Social Security number, places you have lived and even account login data for as many other external sites as you care to include.

Can you think of any single location with so much personal information except for your home than these identity theft companies? Holy Cow! It’s a cyber-criminal’s dream come true! If the identity theft company were to be breached by hackers, they would have access to every piece of critical and personal information you entrusted to these companies. If you think having a single credit card is bad, just wait until you get everything stolen.

You have no way of actually knowing how well these companies are protecting your data which puts you at a disadvantage unlike protecting this information yourself. The litmus test is to see which companies have more attorneys than they do information security experts on staff.
Second, how do you protect your information?

• Read your credit reports. You have a right to a free credit report every 12 months from each of the three nationwide credit reporting companies. Order all three reports at once, or so as I do and order one report every four months. To order, go to annualcreditreport.com or call 1-877-322-8228.
• Read your free bank, credit card, and account statements, and the explanation of medical benefits from your health plan. If a statement has errors in it or if they don’t come on time, contact the business.
• Shred all documents that show personal, financial, and medical information before you throw them away. Shredders are inexpensive to own. Many communities also have “shredder days” where you can take this material to some location for free shredding.
• Don’t respond to email, text, and phone messages that ask for personal information. Legitimate companies don’t ask for information this way. Deleting these messages is free.
• Create free passwords that mix letters, numbers, and special characters. Don’t use the same password for more than one account. Keep in mind that any sites that have been hacked and account passwords are stolen may be used at other sites you use.
• If you shop or bank online, use websites that protect your financial information with encryption. An encrypted site has “https” at the beginning of the web address; “s” is for secure.
• If you use a public wireless network, don’t send information to any website that isn’t fully encrypted.
• Use anti-virus and anti-spyware software, and a firewall on your computer. There are free versions out there that are generally built into the operating systems.
• Set your computer’s operating system, web browser, and security system to update automatically for free.
• Set the transaction alerts on your accounts to notify you of changes, purchases and other alerts. For example, I set mine to decline foreign country credit transactions unless I’m travelling and a purchase threshold of $1 so I get a notification immediately on every purchase. This is free.
• Check into your insurance company or travel agency products and services. Chances are they have identity theft protections and services bundled with the services you already pay for. For example, my bank and credit card companies protect me from ID theft for free as a customer. My AAA account has full featured ID theft protections bundled in for free.

Third, what do you do if your identity is stolen?

Call one of the nationwide credit reporting companies, and ask for a fraud alert on your credit report. The company you call must contact the other two so they can put fraud alerts on your files. An initial fraud alert is good for 90 days.

Here are your points of contact:

• Equifax: 1-800-525-6285
• Experian: 1-888-397-3742
• TransUnion: 1-800-680-7289

Each company’s credit report about you is slightly different, so order a report from each company. When you order, you must answer some questions to prove your identity. Read your reports carefully to see if the information is correct. If you see mistakes or signs of fraud, contact the credit reporting company.

An Identity Theft Report can help you get fraudulent information removed from your credit report, stop a company from collecting debts caused by identity theft, and get information about accounts a thief opened in your name.

To create an Identity Theft Report:

 File a complaint with the FTC at ftc.gov/complaint or 1-877-438-4338. Your completed complaint is called an FTC Affidavit.

  Take your FTC Affidavit to your local police, or to the police where the theft occurred, and file a police report. Get a copy of the police report.

Finally, make an action plan.

You will need to create a system to organize your documentation and calls. Resolving identity theft takes phone calls, correspondence and an awareness of deadlines.

For example:

• Telephone Calls: Create a log of all telephone calls. Record the date of each call and the names and telephone numbers of everyone you contact. Prepare your questions before you call and then write down or record the answers. I prefer to record my call and conversations and I’m not required to tell anyone I’m doing it.
• Postal Mail: Send letters by certified mail and ask for the return receipt.
• Documents: Create a filing system. Keep all originals and only send or share copies of your documentation, not the originals. Make copies of your identification to include in letters.
• Deadlines: Make a timeline for yourself and list the important dates, including when 1) You must file requests, 2) A company must respond to you and 3) When you must send follow-up correspondence.

Conclusion

I’ve given you quite a lot to think about hopefully. There are so many great resources out there to further help you with fighting identity theft. One of the best resources is the FTC where there are great free videos and materials to help you understand, thwart and combat identity theft. They have so many tips and videos and bits of assistance available for free. I could not encourage you enough to check out their website.

Here is a video I especially enjoyed: Identity Theft: Rapid Response Tips video: http://bcove.me/i1vwwt1f

There is not a single resource or technique I’ve mentioned that is not free to use or is not already associated with business services you already utilize. Don’t waste your money on id theft products from companies selling fear and preying upon consumer ignorance. Buying these services will only increase your risk to identity theft, not protect you from it.