An ounce of prevention Because clearing your name is difficult, your best defense against identity theft is a good offense. Shredding credit-card receipts, cancelled checks and other financial documents is a good first step, but it's no longer enough. Employers have a duty to store any documents with Social Security numbers on them in a secure manner, whether it's in paper-based files or on a computer,'' Givens says. Don't give out sensitive financial information on a cellular or cordless phone, especially if it's an older model. Criminals with radio scanners can eavesdrop on your calls.
Digital phones are harder to monitor.
If you receive government benefits checks, arrange to have them deposited electronically in your bank account. The U.S. Treasury recently announced it will stop printing Social Security numbers on envelopes containing Social Security and Supplemental Security Income checks. But the Treasury says the best way to protect yourself is to have those checks transferred directly to your bank account. If you get a tax refund, you can also arrange for the Internal Revenue Service to deposit it electronically. Get a credit report from one of the three credit bureaus once a year.