Protecting against identity theft

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Identity thieves love to work overtime.

About 8.3 million adults, or 3.7 percent of the adult population, were victims of identity theft in 2005, the Federal Trade Commission recently reported. That's down from the FTC's 2003 report, though the commission said the drop wasn't statistically significant. Computer security analysts disputed the FTC's numbers, arguing incidences of identity theft are much higher.

If you're a victim of identity theft, it's significant, no matter what the experts say. The high-stress holiday shopping season creates lots of opportunities for crooks to steal personal information. Here's how to avoid becoming a statistic:

n Safeguard your personal information. When you head out to the mall, don't carry credit cards, debit cards or other cards you don't need. And make sure personal information in your home is secure. Sixteen percent of victims said their information was stolen by someone they knew.

n Monitor your accounts. If you're victimized, time is critical. Nearly one-third of victims who discovered the problem six months or more after their information was stolen suffered out-of-pocket costs of $1,000 or more, compared with only 10 percent of those who detected the problem earlier, the FTC said. All three credit bureaus, along with many banks, offer credit-monitoring services, typically for a monthly fee. Most credit-card issuers and banks offer free online accounts that let you regularly check activity in your account, instead of waiting for bills to arrive in the mail. You also can protect yourself by periodically reviewing your credit reports. You can get a free copy of your credit report once a year from all three credit bureaus at annualcreditreport.com.

n When shopping online, deal only with secure Web sites. Before providing information, make sure the site's Web address begins with "https," which indicates your credit card information will be encrypted when it's transmitted over the Internet.

n Always log on directly to the Web site. Don't respond to links in e-mails. These may be phishing scams operated by thieves seeking to obtain personal information.

n If you plan to make many online purchases, consider using one credit card for all your transactions, said Ben Woolsey, director of marketing for CreditCards.com. You're more likely to notice unusual activity on such a dedicated card than on the card you use for most everyday transactions, he said. And if you see something suspicious, you can close the account.

If you're really worried about identity theft, or fear you've already been victimized, putting a security freeze on your credit reports might help you sleep at night. A freeze prevents card issuers, lenders and others from reviewing your credit history. Without that information, they won't issue credit, making it nearly impossible for a crook to set up fraudulent accounts in your name.

"A security freeze is the strongest measure you can take to protect yourself against identity theft," said John Rother, executive officer for policy and strategy at AARP.

Until recently, your ability to freeze your credit depended on where you lived. On Nov. 1, the three credit bureaus began offering a security freeze to consumers who live in the 11 states that haven't enacted security-freeze protections - along with residents of the five states that limit credit-freeze protections to identity theft victims. You can find a rundown of state laws at financialprivacynow.org. The site also explains how to request a freeze from Equifax, Experian and TransUnion if you live in a state that hasn't enacted freeze protections.

Unless you live in a state that mandates a lower fee, you'll have to pay $10 to each of the credit bureaus to freeze your reports, for a total cost of $30.

Be aware - once you freeze your credit reports, you won't be able to get instant credit. You'll have to lift the freeze before you apply for a credit card, car loan or mortgage. The credit bureaus each charge $10 for this service, unless your state mandates a lower fee.

Officials with the credit bureaus say only a small proportion of consumers have requested a freeze. Rother said that might reflect a lack of awareness. An AARP survey found that 81 percent of older consumers are concerned about identity theft, but only 31 percent were aware they could freeze their credit reports.

"Even though there's a broad level of concern about identity theft, and people are aware there's a problem," Rother said, "there's a big gap between being aware of the problem and knowing what to do about it."