How Can I Protect Myself From Identity Theft?

Two readers wrote to Debt.com Chairman and CPA Howard Dvorkin inquiring about identity theft. One had experienced their first fraudulent charge on their credit card, while the other learned that his fiancée had lost thousands of dollars because her simple passwords were easy bait for identity thieves. Dvorkin gave them some tips for preventing identity theft in the future and being smart about protecting personal information.

First brush with ID theft

Question: So I had my identity stolen last month. Never knew what that really meant before. Here’s what it meant for me: Someone in Roanoke, Virginia, was buying sneakers and TVs on my credit card.

I was lucky, though. The credit card company called to tell me. So I didn’t get charged, but I did have to stop using my card until I got a new one sent to me.

I have no idea how the hell someone stole my credit card number. Now I’m freaked out it’ll happen again. Anything I can do to prevent it? How can I protect myself from identity theft?

— Andrew in Philadelphia

Howard Dvorkin CPA answers…

You’re not alone, Andrew.

What’s so frustrating is that protecting your identity is quite simple. While many topics covered here on Debt.com can require some time and brainpower – from learning about your retirement saving options to saving on your student loans – these solutions are easy.

Identifying the solutions

I don’t know how your credit card number was stolen, Andrew, but I can share three simple ways to lower the chances it happens again…

1. Shred those paper statements. We live in a tech era, but criminals make money by thinking old-school. Your monthly credit card statements contain all the information they need to run up big bills in your name.
2. Check those statements. You were lucky, Andrew, that your credit card company recognized a suspicious pattern of spending. The best companies do that to protect both you and themselves. However, no system is foolproof. Review your statements each month to ensure you made all those purchases.
3. Don’t sign blank receipts. If you’re ordering take-out from a restaurant and there’s a space for a tip, draw a line through it. Some of the hardest credit card theft to notice is the smallest.

If you do spot a problem, call the number on the back of your credit card right away. While many Americans complain about poor customer service in many areas, I’ve seldom heard any horror stories from credit card users either reporting or inquiring about fraud. These companies are serious about catching bad guys, and they desperately want your help.

Other kinds of ID theft

Of course, ID theft comes in many flavors. That’s why you should never carry your Social Security card in your wallet or give your Social Security number over the phone to anyone you don’t know. It’s why you should frequently change your online passwords and password-protect your smartphone and laptop.

If you want more advice on preventing ID theft – from simple tips all the way up to credit monitoring services – Debt.com has dedicated an entire section of its Education Center to the topic. As always, all the advice is vetted by experts and totally free.

The dangers of simple passwords

Question: I already know that fights about money are a major reason why marriages go to hell. So before I proposed to my girlfriend at Thanksgiving — in front of her family, which was cool — we sat down and reviewed our finances.

Turns out, we’re good. She’s got a few grand on her credit cards but nothing else except a car loan. I got $12,000 left on my student loans, but I cut my payments with one of your programs. 

Here’s the thing, though: Over the holidays, she got hacked. Her identity got stolen. And I just learned it’s happened, like, four or five times before! It’s her fault, too. Her passwords are all, “me123” (with “me” being her name). She uses public wifi in coffee bars to pay her bills, and she clicks on attachments in her email even when they’re from people she doesn’t know.

She’s lost hundreds of dollars in these hacks and says she’s gonna change. But she still hasn’t changed a single password. I’m afraid to marry and spend lots of time and money dealing with this stuff. What can I do to make her understand? This is really bugging me, because it’s such an easy thing to fix but she won’t do it, not even for me and our future.

— Juan in Arizona

Howard Dvorkin CPA answers…

I completely understand your frustration, Juan. In fact, I’m even more upset than you are. You’re angry at your fiancée, while I’m mad at the world.

In 2018, Debt.com reported how ID Theft Is More Common Because We’re More Lazy. “Americans aren’t doing enough to protect themselves from getting identities stolen,” we concluded after studying the latest research.

The University of Phoenix released another study on the topic. It pretty much describes your fiancée…

• 52 percent of U.S. adults “are willing to overlook cybersecurity risks for the sake of convenience.”
• “60 percent use open Wi-Fi networks even though they don’t trust them – because “the convenience of using the unsecured network outweighed any potential risk.”

So what can you do? I can’t give you a perfect solution, Juan. Why? Because sadly, the most effective solution to being careless on the Internet is to, become a victim of identity theft. In my experience, the cost in hours and dollars is so steep, most people vow, “Never again will I ignore Internet security.”

Unfortunately, your fiancée has been a victim many times, yet the hard lessons haven’t sunk in. So I have two suggestions.

First, before you marry, you need to agree: You’re in charge of the finances until she can adhere to the basics of online security. That means no joint credit or debit cards, and only you have access to online banking. She can (and should) view that information, but she shouldn’t be able to log on without you.

Second, you may want to buy a service like LifeLock. This protection service not only alerts you to bad things, but also offers insurance if something bad does happen. Check this out, and I really hope your fiancee doesn’t let her sloppy web habits torpedo a lifetime of happiness.