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Your Data's Been Stolen. Don't Panic

Losses from identity theft are down, but we're still $45 billion in the hole.

Beth Givens is director of the Privacy Rights Clearinghouse.

So-called breach letters -- news that your personal data has been compromised -- are a dime a dozen now. Should they go straight into the circular file?
Every adult should expect to get a letter if they haven't already. I've received three. Indications are that the situation is getting worse, but we don't know whether that's because there are more reports or because there are more breaches.

Don't ignore a breach letter if you receive one. Read it carefully. If the breach involves an existing account, I recommend that people simply monitor their monthly statements. It's more serious if your Social Security number has been compromised.

How so?
Your Social Security number is the key piece of data that identity thieves need to open new accounts in your name. That's more difficult to recover from, and it takes more time. We still tell people not to panic -- there's not a lot of evidence that connects the dots between data breaches and ID theft. There's little likelihood that you'll become a victim because of a security breach. Even so, you should take steps to protect yourself.


What steps?
Establish a fraud alert for 90 days. That's a statement on your credit report that says you may be a victim of fraud and should be contacted before any credit is issued. All you do is make a toll-free phone call to one credit bureau and it has to contact the others. The problem with fraud alerts, we've learned, is that merchants don't always pay attention.

What's the next step?
A security freeze is the ultimate identity-theft prevention. It essentially renders your credit report inaccessible, so a merchant won't open a new account.

Before you establish a freeze, ask yourself whether you'll be entering into any credit transactions in the near future, including refinancing a mortgage, buying a new car, opening a new credit card -- or even applying for a job. You'd have to unfreeze your credit report, then refreeze it, each time paying a fee to each of the three credit bureaus.

What can consumers do preventively?
Assume that your personal information is at risk and build protection strategies into your life, such as ordering your free credit reports every year.