6 Things You Must Know About Identity Theft

1. It’s no joke. The film Identity Thief poked fun at the perp, played by Melissa McCarthy, and her hapless victim, played by Jason Bateman. But the movie highlights how pervasive ID theft has become—and how easy it is for criminals to wreak havoc. “There are more people looking over your shoulder,” says George Milne, a professor of marketing at the University of Massachusetts, Amherst, who specializes in privacy. Still, you don’t need to lose sleep—or sign up for pricey monitoring services.

2. Who’s stealing what. About 12.6 million people were victims of identity theft in 2012, an increase of more than one million from the previous year, reports Javelin Strategy & Research. One likely reason: a spike in Web site data breaches. LinkedIn, Sony and Zappos are among the high-profile businesses attacked in recent years. Javelin found that nearly one in four people who were notified that their data had been compromised in a breach became victims of identity theft last year. The fix: Create a variety of passwords so that a thief won’t be able to use a password stolen from one site to enter another. Passwords for your e-mail and financial accounts, in particular, should be unique. Create longer passwords that contain a mix of upper- and lowercase letters, numbers, and symbols.

3. What to watch for. Review your credit reports periodically and check each bank and credit card statement for unauthorized transactions. Bills from medical providers for services you never received could mean someone is posing as you to get treatment. Make a habit of shredding documents that contain sensitive information.

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4. Lock the door behind you. Don’t share your phone number or birthday on social media sites. Keep your computer’s security software up-to-date, and avoid sending personal data over unsecured Wi-Fi networks and Web sites. Set up alerts through your bank and credit issuers to notify you when large transactions—say, $150 or more—take place. Lock your smart phone’s screen with a password, and set up the ability to erase data remotely in case the phone is lost or stolen.

5. Monitor your child’s identity, too. Kids are attractive targets because crooks may be able to use a child’s information for years before anyone realizes something is amiss. Be on the lookout for unauthorized bills addressed to your child or calls from debt collectors. Have the credit agencies run a manual search of your child’s Social Security number to see whether it has been used. If you’re not sure why a school form requires your child’s Social Security number, don’t hesitate to ask.

6. And if worse comes to worst. If you suspect you’re a victim of identity theft, contact the organi­zation involved, such as a bank or credit issuer, and file a police report. Place a fraud alert on your credit reports by contacting one of the three major bureaus (Equifax, Experian or Trans­Union), which will notify the other two. Lenders will have to take extra steps to verify that you are the person taking out credit in your name. In more serious cases, a security freeze, in which lenders must get your permission to pull a report, may be necessary.