One of the things you need to be wary of is the fact that identity theft could be a very real problem for you. There is no way to completely prevent identity theft, but you can catch it early. And, indeed, the earlier you catch identity theft, the better off you are. One of the things you can do to help catch identity theft earlier is to look for unusual activity in your finances -- especially when it comes to credit cards.
Do You Recognize that Credit Account?
One of the big tip offs that you might be a victim of identity fraud is an account that you don't recognize. You might get a letter in the mail explaining that an account was closed -- and you may not recognize the account. When this happens, you need to contact the customer service department of the credit card issuer in order determine what happened. It may be clerical error -- or it may mean that someone opened the account in your name.
Another thing to watch out for is the appearance of unknown credit card statements in your mail box. A sophisticated phishing scam may be in the offing, and that could be a problem. These fake credit card statements are either for a credit card account you don't have, or they show the wrong amount owed on your bill. You call the number listed on the statement, and your information is taken; your identity stolen like that. Rather than trust the number on the statement, you should look online at the company's official web site and get the phone number from there.
Check Your Credit Report
You should also look for inconsistencies and errors on your credit report. Look for accounts that are not yours, but that show up in your report. You are entitled to a free credit report each year. You have to request your free credit report by mail, though. In Canada, the three main bureaus are Equifax Canada, Trans Union Canada (Trans Union Canada Echo Group for Quebec) and Norther Credit Bureaus. Send your request via mail, and you will be offered a credit report in the mail. Check through it for indications that someone has opened accounts in your name, signaling identity theft.
Read Through Your Bank and Credit Card Statements
Finally, you need to look through your bank statements and credit card statements, watching for unusual activity. Keep track of your spending in personal finance software or in a ledger. Each month, reconcile your records with what is in your statements. This includes keeping track of credit card spending. You want to make sure that you know where your money is going. If something unusual comes up on your statement, that could be a sign that your identity has been compromised, and that you need to take action to remedy the situation.
Only by remaining vigilant can you catch identity theft. You probably don't need identity theft insurance; keep an eye out for unusual activity, and when you see it, immediately follow up.
This post was included in the Carnival of Personal Finance at Well Heeled Blog.
Image source: Ski Mask Kid via Flickr
