It doesn't take much to become an identity fraud victim. If you throw a bank statement in the trash without shredding it, or forget to arrange to have your mail picked up while you're on vacation, personal data can be stolen.
People can have their identities stolen even when they're being careful: the Federal Trade Commission warns about a process called skimming where an electronic device is used to illegally store and retrieve credit card information used in legitimate purchases. This can be done by an employee without a store owner's knowledge, often undetected until it's too late.
Pretexting is another tactic used. In pretexting, you receive a phone call or e-mail from someone claiming to represent a company. The caller asks for your personal data to update files or change passwords. Never give out personal information during an incoming call or e-mail that you didn't initiate.
Identity fraud is the next step after identity theft. If your driver's license number is stolen, a fake ID can be created; once the ID is ready the thief can open new accounts in your name, apply for loans, even get medical care. There are as many ways to use your personal information illegally as there are legitimate uses.
You can protect yourself from identity theft and fraud in many ways. Start by shredding your mail and receipts that you don't need to save. Add an extra layer of protection by getting a private mail box or a post office box, and keep your mail under lock and key. If you're worried about credit card skimming, MSN Money writer Jeff Wuorio says you should pay cash instead, unless you can keep the credit card in your hand for the entire transaction.
Keep your personal data safe by refusing to give your information out. Have you ever been asked for your phone number at the checkout counter? Tell the sales clerk the number is private, and do the same with your home address. Have you ever called a credit card company to ask a question? Does the rep ask for your credit card number? Be aware of where you are when reciting those numbers. If someone is nearby to overhear you, they could be committing those numbers to memory.
MSN.com reports 750 thousand people a year are victims of identity theft and fraud. A lot of people become instant experts on how to protect their data, but only after becoming one of those victims. Protecting your information may not save you from a determined thief, but you can make yourself a much less appealing target for identity fraud.
On the next page, find out about a growing form of identity theft -- health insurance fraud.