Are you worried about identity theft?

Have you been taking any steps to help reduce your risk of being a victim of identity theft?

Ask anyone that has been victimized by this serious crime and they will tell you the trouble it can cause. Not only can your credit be destroyed but it will likely cost you a considerable amount of time and money as you try to repair the damage.

Identity theft prevention should be on your mind and the good news is that there are very easy steps that you can take right now to safeguard your information.

• Shred financial documents and anything with personal information. You can purchase a shredder for under $100.00 at the local office supply store and shred everything before disposing of it in the garbage. Another option is to save all of these documents in a box and then take them to a company or service to shred. Your local town may offer an special event once or twice a year where you can bring your documents to be shredded for no charge.
  
  
• Don’t give out your personal information on the phone, through the mail, or over the Internet unless you know who you are talking with. One of the common scams that catch people is when someone calls and pretends to be from your bank or credit card. They sound legitimate and ask you to provide your personal information in order to verify your account. Unless you have initiated the conversation, don’t share your personal information.
  
  
• Protect your Social Security number. At one time many people had their SSN on their personal checks, which obviously is not recommended. Don’t carry your SSN card with you either, as if you lose your purse or wallet your identity will immediately be at risk.
  
  
• Never click on links in an unsolicited email. As discussed in the tips to protect yourself from phishing scams, be skeptical of any email that you receive and type in the web address directly rather than click on the link.
  
  
• Use obscure passwords. It is scary to think of how many people use passwords such as “password” or “secret”. Avoid using common information such as your birth date, name, address, or your maiden name. While it might seem inconvenient to use a password like “tD3bQ2qm28K”, it will be much harder for someone to crack.
  
  
• Keep your personal information secure, even in your home. Many people think they are safe within their home, leaving information out on the table or desk. When you think of the people that might come through your house – repairmen, cleaning people, roommates, and even neighbors or friends, you never know who might be desperate and steal your information.
  
  

As you can see, none of these tips are overly difficult to follow but can really go a long way towards helping you prevent identity theft.

Identity theft is something that you want to be proactive with preventing rather than reactive after it has happened.

Source: FTC.gov

Apparently the system that was breached included information on credit and debit transactions, as well as checks and merchandise returns. The impact is for customers in the US and Puerto Rico but may also include the UK and Ireland. According to the AP, it appears that the credit card companies are taking steps to monitor their customer accounts for any fraudulently activity. However, some customers have had their drivers license information breached as well, so the risk of identity theft is quite high as well.

Are You Kidding Me?
The company spokeswoman has indicated that they believe the security breach took place in May of 2006 but was not discovered until mid-December. Excuse me?!? It took TJX Cos. nearly 7 months to identify that they even had a security breach. That would not instill a lot of confidence in me if I were a customer of their stores. Luckily, we do not shop at any of the companies under their umbrella.

The fact that it took a month to disclose to the public is a little more understandable, as I am sure that law enforcement wanted the opportunity to take action before the story hit the news. However, I really think that the 7 months it took to discover the security breach is completely unacceptable.

Monitor Your Accounts.
For any of you that have been a customer of any TJX stores as far back as 2003, please take the time to closely monitor your accounts for any suspicious activity. In addition, now may be a perfect time to take advantage of the free credit report and review all of your accounts and activity. Due to the nature of the information that was stolen, it is possible that accounts were created that you may not even know about.

It will be interesting to see how TJX Cos. responds to this serious breach of security and the fact that it took them approximately 7 months to discover the problem. If you are a customer of any TJX Cos. store and are concerned or would like more information, they have established a hotline at 866.484.6978 or you can visit their website.

Share your thoughts on this breach and whether or not you will shop at a TJX Cos. store in the near future.

Over at MarketWatch.com, Chuck Jaffe has an article that identity theft insurance is his stupid investment of the week. To be honest with you, purchasing identity theft insurance is something that I have never really even thought of doing and the article explains a few reasons why this insurance is not the best choice in most cases.

One potential problem that I see with the identity theft insurance is people being lulled into a false sense of security and not being as diligent as they should in protecting their personal data.

As the National Association of Insurance Commissioners has noted, identity-theft insurance won’t protect you from becoming a victim any more than fire insurance would stop your house from burning down and “does not cover direct monetary losses incurred as a result of identity theft.”

Assuming that you were to purchase identity theft insurance, it seems that another likely issue of contention is exactly what is covered by your policy and how likely the insurance company is to pay out on various items. There is no doubt that victims of identity theft can rack up considerable expenses, including lost wages from time off work, as they struggle to resolve the problem.

But as is the case with any insurance policy, it is critical to understand the details and fine print. Some policies will not cover lost wages or have different interpretations of what constitutes lost wages. In most cases, even though identity theft insurance premiums are quite affordable, it is an insurance policy that is not worth the hassle and thus has been labeled the stupid investment of the week by Mr. Jaffe.

In my opinion, following the appropriate practices such as checking your credit report on a regular basis, shredding sensitive documents and reviewing bank and credit card statements should help minimize the risk of identity theft. In addition, one of the most damaging impacts of identity theft is the likely drop in your credit score and I do not see the identity theft insurance policy helping much in that regard.

So what do you think? Is identity theft insurance the stupid investment of the week or is it a worthwhile purchase in the event that you do become a victim?

Are you familiar with the term phishing? This article will introduce you to the danger of phishing and provide a few tips that will help protect you from becoming a victim of a phishing scam.

Phishing is the use of spam email messages that appear to originate from legitimate businesses that one might have a relationship with, including banks, on-line retailers, insurance agencies and mortgage companies. The messages typically contain a link to a web site that is designed to look extremely authentic, including copies of official corporate logos and corporate verbiage.

The web sites typically ask for verification of personal information, such as account numbers, passwords and social security numbers. Due to the fact that the email message and web site look so official, it is very easy for unsuspecting recipients to respond, resulting in possible financial losses, identity theft and other fraudulent activity.

The IRS has provided the following tips on protecting yourself from phishing scams and identity theft:

• Be skeptical of communications you receive from sources you are not expecting. Verify the authenticity of phone calls, standard mail, faxes or e-mails of questionable origin before responding.

• Do not reveal secret passwords, PINs or other security-based data to third parties; genuine organizations or institutions do not need your secret data for ordinary business transactions.

• Do not click on links contained in possibly questionable e-mails; instead, go directly to the site already known to be genuine. For example, the only address for the IRS Web site is www.irs.gov — any other variations on this will not lead to the legitimate IRS Web site.

• Do not open attachments to e-mails of possibly questionable origin, since they may contain viruses that will infect your computer.

• Shred paper documents containing private financial information before discarding.

Please share any warnings of current phishing scams or provide additional tips to prevent becoming a victim of these scams.