Don’t wait until it’s too late! There are several ways for individuals to protect themselves from becoming the victim of identity theft:

• Obtain and examine personal credit reports from the three major credit reporting agencies: Equifax, Trans-Union and Experian. Report any incorrect information back to the agency immediately. Reports should be checked at least once per year. Residents of Massachusetts, Maine, Vermont, New Jersey, Maryland and Colorado are entitled to one free credit report from each agency annually. Also, if you have been denied credit within the past 60 days due to information on your credit report, you are entitled to a free copy of your credit report regardless of where you live. If you do not fall into either free report category, Federal law has mandated that credit reports need to be made available to individuals for a reasonable charge. Expect to pay between $9.95 to $12.95 per report.
• Carefully destroy any "pre-approved" credit card applications received in your mail that someone could use to get a credit card issued to them in your name. Also destroy other documents such as bank statements, investment statements and credit card statements that contain personal information.
• ATM use: Cover keypad so that your password cannot be seen by others. Be aware of other people nearby that may be watching you type your password. Recently, identity thieves have been caught using miniature video cameras installed near ATM's to capture password information.
• Debit card use: Many retail establishments have point-of-sale devices where the customer swipes their debit card then enters their password. Cover the keypad, similar to using an ATM, to conceal your password. The next person in line could be watching your every move.
• Internet use: Many institutions from banks to investment houses offer internet access to customers. Be very careful especially in public areas such as a library or internet café when typing in user names and passwords.
• Computer use: Make sure that your home computer is equipped with up to date virus protection software. Run complete system scans at least once per week. There are many other software products that are available such as spyware remover and firewall software. All of these products will help prevent unauthorized access to information stored on your computer. Consult a computer professional to assess if your computer is properly protected.
• Computer use for Windows users: Run the Windows update program on your computer frequently. Updates often have enhanced computer security features. A connection to the internet is required.
• Computer use for those with wireless networks installed in their home:. Make sure that the firewall feature is enabled so that others cannot access your home network.

If in spite of your best efforts, you become an Identity Theft victim, take the following steps immediately:

• Notify the Authorities: Report the fraud as soon as discovered tone of the three major credit bureaus: Equifax (800-685-1111), Experian (888-397-3742) or TransUnion (800-916-8800). The bureau you contact will alert the others. They’ll also place a fraud alert on your credit file, which lets creditors know to contact you before opening a new account or processing account charges.
• File a report with your Local Police and a complaint with the FTC: The FTC helps law enforcement agencies investigate Identity Theft. If you think that someone might may use your Social Security number, driver’s license or passport, contact the United States Social Security Administration. United States Department of State Transport Services and your state’s Department of Motor Vehicles.
• Prevent further damage: Close all suspect credit or bank accounts. Ask a financial institution to help you follow-up with a written “ID Theft Affidavit.” Developed by the FTC in collaboration with banking, credit and consumer advocates, this is a simple, accepted way to report fraudulent claims to credit issuers, banks and other financial institutions.
• Document everything: Request a letter from each of the three major credit bureaus and a police report as proof of the crime and pending investigation. Keep all documents, including detailed notes and dates of related phone discussions for reference.

Protecting yourself from identity theft takes persistence and vigilance. The penalties include loss of assets and financial character, as well as the time it takes to sort out the mess and restore your reputation. Forewarned is forearmed. By exercising a little care and raising your awareness, it’s possible to avoid becoming an unwitting victim.

Timothy J. Mahoney, CPA, MBA, is a senior professional staff member at Abrams Little-Gill Loberfeld PC (ALL), a mid-sized Certified Public Accounting and Business Advisory firm located in Chestnut Hill, MA. He can be reached via email at timm@all-cpas.com.