Shredding your bills may not be enough to prevent thieves from stealing your identity.
Just ask "American Idol" runner-up Diana DeGarmo. One of her "fans" tried to steal her identity and used her credit cards to purchase thousands of dollars of merchandise online. Bankrate.com recently interviewed her about the experience.
DeGarmo told Bankrate she discovered the problem when her mother called in the middle of the night asking her why she had suddenly spent thousands of dollars on computer equipment and software. The thief had sent a type of spyware called a key logger to her computer, allowing the thief to get a copy of everything she typed into her computer.
To add insult to injury, the spyware the thief had installed on DeGarmo's computer had been purchased with her credit card.
DeGarmo said she had to shut her accounts down and that the credit card company did not hold her responsible for the damage. The "fan" was caught, but, a year later, DeGarmo is still trying to clean up the damage.
The lesson for us not-so-rich-and-famous is that identity theft can take many forms. Here's how thieves might get a hold of your identifying information and how you can thwart them:
- Dumpster diving. The old-fashioned way to steal someone's identity still works. Thieves can find out a lot about you just by picking through your trash or recycling bins. Make sure to shred anything with identifying information printed on it before disposing of it.
- Plain old stealing. Identity thieves may steal your wallet, your purse, your mail, or anything else they can get their hands on that might have enough information to use your accounts or open fraudulent accounts in your name. Pay attention if any of your bank statements go missing from the mailbox. Definitely be on alert if your wallet or checkbook has been stolen, and don't carry your Social Security card. Don't have your Social Security number or driver's license number printed on your checks. Report any thefts and consider putting a fraud alert on your credit reports.
- Phishing. This typically takes the form of an email purportedly from a bank, credit card company, or even the IRS requesting your attention to some urgent matter. The thieves try to trick you into giving away your personal information online. If you have any doubts, don't respond to these emails. Call the institution where you bank or hold your credit card and verify the email if you think they're really trying to get a hold of you.
- Address change. Thieves will sometimes try to divert your bank, credit card, or other financial statements to themselves by changing the address on your accounts. Most financial institutions now send confirmation to both the old and new mailing addresses. If you get one, and you're not moving, you should be on the alert. Call your financial institution immediately.
- Skimming. Using a small electronic device, someone can quickly and easily scan the information off your credit card. This sometimes happens at a restaurant or in a store. The thief may use the card for purchases, sell the information, or make counterfeits. Try not to let your credit card out of your sight when making purchases. Cancel any cards you don't use and closely monitor the ones you use regularly.
- Computer hacking. Your computer stores tons of personal information about you. Protect it by keeping your software up to date and by running anti-virus and anti-spyware vigilantly. If you're getting a new computer, you're safest destroying your old hard drive. Many crafty hackers can pull a lot of information out of your computer even if you think you've erased it.
Don't let your guard down. It doesn't take much for someone with malicious intent to quickly spend thousands of dollars online or tap into your investment accounts. But, it could take you a long time to unwind the damage.