Eight Ways to Avoid Identity Theft and What Your Bank is Doing to Help

Identity theft is one of the fastest growing crimes in the United States and it is evolving in complicated ways that make it harder for you to protect yourself. Education is the one the best defenses to help prevent identity theft.

I have never had anyone steal my identity per se, but I have had my credit card numbers used to make purchases. I have even had gas purchased as far as England using my credit card numbers. Luckily my bank caught the unusual charges and called me immediately to verify the charges and closed the accounts.

I have been attending Dave Ramsey's Financial Peace University and surprisingly during the seventh week class called "Clause and Effect" Dave lists identity theft insurance as one of the 7 types of insurance you should carry. Dave recommends Zander Insurance Group identity theft insurance. You can get yourself protected for as little as $6.50 for an individual or $12.50 month for a family. I am really considering signing us up for this service. If you can't afford that kind of coverage right now here are several things you can do to help protect yourself:

Never provide personal or financial information in response to an unsolicited telephone or Internet request (phishing scams).
Never provide or share passwords over the phone or in response to an unsolicited Internet request.
Review account statements regularly to ensure all charges and transactions are correct.
Use a firewall, anti-virus and spyware protection software at work and at home.
Use a shredder to dispose of personal or financial information.
Employees with access to company computers should be educated about the latest threats and scams, and trained to question any suspicious requests for information.
Be aware that financial institutions will not ask customers to provide sensitive customer information. Sensitive information includes items such as account numbers, date of birth, or social security numbers.
Order copies of your credit report every three months from the different credit reporting agencies to ensure accuracy.

Most banks are now protecting you from identity theft with what is known as multi-factor or two-factor authentication. This type of authentication often drastically reduces the incidents of online identity theft and other online fraud. Bank of America tops in identity theft protection and uses many of these types of authentication that follow:

User selected SiteKey (picture) enables the customer to identify the financial institution. The customer can choose the verification image from a selected database of digital photos.
Challenge questions (provided by the customer) allows the financial institution to identify the customer.

Behind the scenes risk management (invisible to the customer) include:

Customer profiling, which allows the financial institution to identify the customer with new technology.
Transaction monitoring - a non-typical transaction may send up a red flag that prompts the bank to contact the customer by phone to verbally confirm the transaction.

I know a few people who get upset from all the identity tests, but to me it's worth it. It is more hassle to clear your identity than it is to answer a few questions. Follow the steps above and definitely check into identity theft insurance, "All you have to lose is your identity" if you don't.

[This post is written and copyrighted by Financial Elite (http://financialelite.blogspot.com/ ).]

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Most banks are now using what is known as multi-factor or two-factor authentication. This type of authentication often drastically reduces the incidents of online identity theft and other online fraud. Bank of America has won n umerous awards for their identity protection programs and using many of these types of authentication that follow: