Identity Theft: What can you do?

As a CPA, I am often perceived as having all of the answers for whatever financial question a client may pose – and many times, I do have the answer. It may not always be what my client wants to hear, and it may not always be the only answer, but my work experience makes me uniquely qualified to render an opinion on almost any financial issue. There is one topic, however, that can leave me unable to offer anything but condolences. That topic is identity theft.

My family went on vacation this past weekend for the first time since our son was born. We took a long weekend and went to the beach. Of course, Murphy’s Law prevailed and I lost my wallet somewhere on the beach. I guess wrangling a toddler and keeping up with your personal items was just too much for me to handle – especially since my swimsuit had no pockets! As you might guess, the possibility for identity theft is a real concern for me right now.

The sad fact is that an identity thief doesn’t have to get your wallet to steal your identity. In fact, a determined thief can be nearly impossible to deter. There are, however, several things that you can do to at least make it difficult for someone to steal your personal data:

1. Don’t carry your social security card in your wallet or purse. This is the single most important piece of data that identity thieves want to get access to. With your Social Security Number, they can take out loans, apply for credit cards, and even enter into legal contracts in your name....and you won’t even know until they skip that first payment and the bill collector comes calling. Are there cases when you need to know your Social? Certainly – so memorize it and leave the actual card at home. The times that you actually have to show the card are very few and far between.

2. Don’t use your birthday as your Personal Identification Number. It seems like a basic concept, but so many people still do it. One of the easiest pieces of information for someone to steal is your date of birth, and if that’s the key to all of your bank account, credit card, and other financial information, then you’re in deep trouble. Sure, it’s easy to remember, but pick something else and save yourself the potential trouble.

3. Don’t share everything on Facebook. I know social networking sites are all the rage right now. I have more online profiles that I can keep up with. However, in this age of information and quick connections, it’s more possible to ever to share too much. Do all the Mafia Wars and Farmville that you like, but avoid putting your phone number, address, or date of birth on your profiles. This just makes them 'easy pickings' for identity thieves.

4. Don’t reply to suspicious e-mails. “Phishing” is the practice of using fake e-mails to acquire personal information about victims. Often, phishing e-mails will appear to come from your bank, Paypal, or even the IRS. These messages always take a variation on the same theme – they warn you that you are at some sort of risk and ask you to click a link and verify your personal data. The link takes you to a site that looks a lot like your bank’s website, but it’s really there just to steal your personal information. If you ever think a message may be legitimate, close the e-mail and go to the website using an address that you know is safe.

5. Shred all personal information before you throw it away. Identity thieves are not above going through your garbage, hunting for something they can use. Whether it’s a credit card offer, a paid bill, or especially anything with your license number, SSN, or date of birth on it....make sure any documents containing personal data are destroyed before disposing of them.

6. Periodically review your credit reports. Sometimes credit fraud can be detected early if you take the time to get copies of your credit reports a couple times a year. There are three credit reporting bureaus, and all three could show different data, so you will need to look at all three. Report any suspicious activity immediately.

As I mentioned earlier, there is no iron-clad way to prevent identity theft altogether. However, if you will follow these tips, you can at least make yourself a more difficult target for would-be thieves.

--Dan Musick is the Tax Services partner with Cook & Associates, a full-service accounting firm offering audit, tax, consulting, and bookkeeping services to clients from its offices in San Marcos and San Antonio, TX