Identity theft is a crime where a person’s legal identity is stolen and used to conduct financial fraud. Identity thieves steal information about a victim such as bank account information, Social Security number and driver’s license number in order to open accounts in the victim’s name or to change the victim’s account information. In 2009, there were millions of cases of identity theft reported in the United States.

The damage from identity theft is considerable, both to financial institutions and victims. Since most identity thieves are never caught, financial institutions cover a majority of the costs from fraud. The average victim will pay over $1,000 to have their good credit restored and it could take years for their credit record to be rectified. During this time, the victim will not be eligible for home, car or student loans, nor will they pass a credit check required for some jobs. The possible non-financial repercussions to the victim of identity include criminal investigation, arrest and even conviction.

While you can’t prevent identity theft, you can minimize your risk by managing your personal information wisely. Basic, everyday transactions are often the target of identity thieves. A check written at a department store, a credit card receipt from dinner, and other records of day-to-day financial transactions that require the sharing of personal information are all targets for identity thieves.

Here are some steps to help you not be a victim of identity theft:

• Order your credit report from the three major credit bureaus each year and check to see if all the information is correct.  (Equifax, Experian, and Trans Union)
• Follow up with creditors if bills do not arrive on time, as the identity thief may have taken your bill and use that information to conduct fraud in your good name.
• Shred or tear up papers that you do not intend to keep that contain personal, financial or account information.  Examples of these are credit card offers, credit card checks, papers with personal identification numbers (PINs), etc.
• Be careful when sharing personal information in person, over the phone and on the Internet.
• Be careful what you keep in your purse or wallet. If your purse or wallet is stolen, report it right away to the police and follow up with your credit-card company, credit union, and insurance company so they can stop activity on your accounts.
• Keep a copy of all the contact information of your financial companies safe at home so you can quickly contact each institution for reporting stolen credit cards, checks, and insurance cards.

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