Credit - Article 8.

IDENTITY THEFT

Scary words, aren't they? We've heard enough of the horror stories to believe that one of the worst things that can happen in and to our financial lives is to have our "identity" stolen, our credit usurped by a malicious stranger. Identity theft may not actually happen all that often, but it can surely cause extraordinary grief when it does happen - years of dealing with the effects of unpaid debts and disbelieving creditors.

The simple truth is that there is risk in all aspects of our lives - risk in crossing the street or falling in love or using a credit card. There is no real benefit to living a completely insulated life, for to do so would mean that you never venture away from home, never ride in a car, never eat anything you didn't grow yourself. And, even if I chose to live in a sterile environment, my luck would have me fall in the bathtub….so I figure the best I can and should do is to live a normal life and take reasonable precautions against knowable risks.

We buy insurance in case our car is in an accident and in case the house burns. We buy life insurance to provide financially for our families if we die prematurely. We cook our steaks thoroughly (well, at least some of us do, anyway).

We assume for the purposes of this discussion that credit is useful and perhaps even important enough for we middle class Americans to have and use credit, including credit cards. What sort of "insurance" can we take out to minimize the risk that our credit may be misused by another?

	We start by making it as difficult as possible for the thief to steal our identity - treat your credit cards and identification just as cautiously as you'd treat a thousand dollars cash money;
	Never, ever give identifying information to anybody who asks, unless you initiated the contact or made the phone call, for no reputable business will randomly call you up and ask for information such as an account number or social security;
	Do not have your social security number printed on your checks or otherwise make it easily available;
	Check your bank statements to confirm that each debit was actually incurred by you and similarly verify each charge on each credit card bill - and then specifically confirm any you have doubts about;
	When setting up PINs (personal identification numbers) and account passwords, do not use the same "secrets" for all of your accounts; also, avoid easily "guessable" choices, such as your birthdate or telephone or address; it makes sense to change them from time to time;
	Obtain a copy of your credit report at least annually just to see if there is any activity you cannot explain.

If you have already been burned, close all of your accounts immediately, notifying each creditor, each bank and even the Social Security Administration of the theft. Get the police involved - a contemporaneous written police report will be vital each time you have to deal with the consequences of the theft. Prepare to fight to protect yourself against the long-term mess the theft may have created.

Insurers are now offering so-called "identity theft" policies. If this interests you, be aware that the fine print in such a policy may well set up coverage in such limited circumstances or in such a low total limit of liability that you aren't really buying much protection. The best defense is and will continue to be vigilance and intelligence.

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