How to Avoid ID Theft  Fraud Alerts  How to Freeze your Credit Report What is Identity Theft? Identity Theft Data Tax Return ID Theft

How to Avoid Identity Theft for Free

How to Avoid Identity Theft for Free

Do not pay for credit monitoring until you read this!


No one is tellling the truth about how to prevent idenity theft.  I don't know why.  Identity theft is a major financial problem in the United States, primarily because it is a very easy crime to commit.  If no one has obtained credit in your name or used your credit card information to make illicit purchases you have indeed been very lucky. 

The reason I started this page is that no one was telling the truth about preventing ID theft.  Authors were writing articles that misled readers into thinking that by taking certain precautions with your sensitive information ID theft could be minimized.  That simply isn't true.  Conventional tactics have minimal effect.  There are, however, some simple things you can do that will help significantly and we will cover that here. 

I am a retired Postal Inspector.  I investigated ID theft, among other crimes, for over thirty years.  As I said, the reason ID theft is so prevalent is because it is so easy.  If you have someone else’s identifying information, i.e. their date of birth, Social Security Number, credit account numbers, etc., pretending to be that person is not hard.  It is well within the capabilities of even many intellectually challenged criminals.  Keeping your personal information out of the hands of criminals is impossible.  Yes, I said impossible.  Read on, please.

I am very particular with taking precautions with my credit cards and despite that my credit card has been cloned three times.  Each time someone got my credit card information and made several charges in a two day period.   Each time I still had the credit card in my wallet and some criminal somewhere was making charges on it.  They had imprinted the magnetic strip on their card with the data from the magnetic strip on my card. That is called cloning.  It was very upsetting.  You may have experienced the same thing.

There has been a lot of misinformation and incomplete information circulated about identity theft.  Some of it has been by well meaning journalists.  Some misinformation has been promoted by service companies allegedly trying to protect you from identity theft for a fee.  There are dozens of ads on television and other places that lead you to believe they can help you for free but they all want to sell you something.  Virtually every single one wants a fee for their services, no matter what they claim in their ads.  It is time the misinformation ends. 



These are many of the conventional things that consumers are advised to do to avoid Identity Theft:

  • shred letters containing credit card offers
  • don’t let waiters take your credit card out of your sight at restaurants
  • don’t mail bill payments by putting them in your curbside mailbox and raising the flag (you are just telling mail theives where they can get your checking account number)
  • don’t give your credit card number or social security number to solicitors who call you on the phone
  • memorize your passwords and PINs – don’t write them down
  • check your credit report regularly
  • watch for phishing – emails that pretend to be a financial institution you do business with
  • only make online purchases from sites you trust
  • secure your home WiFi network with password protection
  • don’t let anyone see you put your code in ATMs
  • never give out your Social Security Number
  • cancel unused credit accounts
  • Subscribe to a credit monitoring service (understand they generally notify you the day after someone gets credit in your name and they charge significant fees)

All these things are good practices and I encourage them, but they will not stop ID thieves. 


We tend to hear about thefts of information during Internet purchases, mail thefts, phishing, and fast talking telemarketers because it makes good news copy, but this is not how most ID theft occurs.  How does most ID theft occur?  Please, if you don’t read anything else in this post, read the next sentence.

ID theft usually starts with a corrupt individual who works in a legitimate business and is in a legitimate position to obtain sensitive information. 

If this doesn’t make sense, let me give you some actual examples encountered during previous investigations:

·         A corrupt clerk at an auto dealership who was assigned to file credit applications was copying information from them and using the info to obtain credit in customers’ names.

·         A corrupt employee of a medical microfilm imaging company was using information from patient files to obtain credit cards in their names at a private mailbox she rented.  The victims were patients of physicians whose offices used the microfilm imaging service.

·         A motel employee who was stealing the information from customers’ credit cards was using the info to make mail order purchases.

·         A mall store employee stole information from customers credit cards and then encoded his own credit cards with the customers’ credit card account numbers.

·         A department store employee who worked at a refund counter at a discount department store stole the information from customers’ credit cards and then called the credit card company pretending to be the employee.  She used information from the refund application and the credit cards themselves to request “duplicate” credit cards from credit card companies.  She had the cards sent to an address under her control.

·         A corrupt employee who worked in the accounting section of a hospital copied down the personal information about patients and sold it to other criminals who filed hundreds of fraudulent tax returns.

·         A dentist office employee who copied down account and credit card information and then simply called the credit card companies and requested “replacement” cards be mailed to the customer.  Then she checked the customers’ mailboxes and took the cards when they came in.

·         Restaurant employees who clone credit cards of customers.  There is a small handheld device called a "skimmer" that copies data from the magnetic strip of credit cards.  These can be used by unscrupulous employess of any business to copy your credit card electronically.  Restaurants are just the most frequent place they are used

·         Foreign criminals hack into a domestic Point Of Sale system and download thousands of credit card numbers and personal information.   The recent compromise of Target department store credit card customers is a good example of this.

There are dozens of other examples but you get the idea.  You probably have had legitimate access to sensitive information at a job you worked at.  Think how easy it would have been to steal identities.  That is how it happens and you can’t stop it. 


(as much as humanly possible)

To be sure, practically all employees of car dealerships, doctor’s offices, dentist’s offices, motels, and retail stores are honest, hardworking folks.  The problem is that it only takes that one dishonest employee to steal your identity.  We cannot avoid these businesses.  We do not even want to avoid these businesses.  We need their services and we need their goods.  So, what can we do?

We can do these three simple things: 

  • Have your photograph put on your credit card.
  • Get a credit card from a company that notifies you via text message immediately when it is used.
  • File a “consumer statement” with the credit bureaus asking that you be contacted when a credit application is submitted in your name.

Let’s take these one at a time. 


Here is a picture of my debit/credit card (sans account number!).  It has my picture on it. 


If someone steals my credit card, they are going to need to be a balding old white guy to use it.  Now, to be sure, there are certainly balding old white guys stealing credit cards and I know because I have arrested several.  At least by putting my photograph on my credit card, I have  limited the group of criminals who can use my credit card if they get their hands on it.

Have your bank put your picture on your credit card.  It is usually free but if they charge for it, get it anyway.



Second, I said get a credit card from a company that notifies you via text message when the card is used.  Please understand that there is nothing you can do to prevent the theft of your credit card information.  You just have to accept this.  Just get your head around the fact that if you are going to use a credit card regularly your credit card data is going to be stolen.  It is eventually going to happen to you.  You can’t stop it.  What you can do is limit this illicit use when it occurs.   Usually, you can limit it to one illicit use.  Here’s how.

Some credit card companies offer a service whereby they send a text message to your phone each time your card is used.  I have one.  It works.  Usually when I give my credit card to a waiter or waitress at a restaurant, I get a text message saying my card was charged before he or she returns with the slip for me to sign.  When I use my credit card at a store, I frequently get the text before I get to the door.  When I use my credit card at a gas pump, I routinely get a text message before I finish pumping the gas.  Sometimes there is a delay of a few minutes but it always arrives almost instantaneously.   Below are examples of the text messages I receive when my card is used.

I got both text messages indicating I had used my card at restaurants while I was still sitting at the table.  The second one, from Ruby Tuesday’s, I received before the waitress returned with the charge slip for me to sign. 

If you have this service, when your credit card data is stolen and there is an illicit charge made, you will get the info in real time.  You will be able to notify your credit card company before additional charges are made.   Happily, the first illicit charge tends to be a small charge made by the criminal just to see if the card is usable.  You can’t stop the first illicit charge but charges number two through X can be prevented.  IF you act fast, sometimes you might even get that first one reversed.

Let's say your card was one of the ones stolen by the foreign Target department store hackers.  They will sell the card info to another criminal.  He will usually first make a small charge to make sure it is an active card.  When you see the text message for a charge you didn't make, you will know to shut down the card.  It is just a simple, effective way to avoid ID theft.

Not all banks offer this service on their credit cards.  Mine didn’t.  I got a credit card from another bank just to get this feature.  It’s great.  Get it.



The third thing you can do to avoid ID theft is add a “consumer statement” to your credit report.  Some explanation is in order here.

The Fair Credit Reporting Act of 1992, Title 15 US Code, Section 1681, requires credit bureaus to add consumer statements to credit reports under certain conditions.  The full text of the statute is at  The statute anticipates the use of consumer statements in cases where credit issues are in dispute.  We can use these consumer statements to our advantage as you will see shortly.

When you apply for a loan or a credit card, the bank where you are making application checks your credit.  They order a credit report that details your credit history.  There are only three credit bureaus where they can get credit reports from.  They are TransUnion, Experian, and Equifax.

Interestingly, credit bureaus are not required to notify you when they issue a credit report on you.  They should be statutorily required to notify you (in my opinion) but they are not.  The presumption is that you authorized the credit report and most of the time you did.  When you applied for credit with your bank, you signed a statement agreeing to let the bank order a credit report on you.  The problem is, when an ID thief uses your personal data to apply for credit in your name, he agrees to the issuance of that credit report in your name.

The credit bureaus will permit you to submit a “consumer statement” for inclusion on your credit report if you have been a victim of identity theft.  It is extremely likely you have been a victim of ID theft unless you just turned 18!!  As I mentioned, my credit card has been cloned three times and I check it obsessively.  In this consumer statement say,

“I have been a victim of identity theft and I hereby request that I be contacted at cell phone [your cell number here] to verify the authenticity of any credit application before credit is issued in my name.”

To accomplish this, first, order a copy of your credit report from all three credit bureaus.  You can do this for free at   Do not respond to any of the slick television advertisements or other advertisements offering free credit reports.  If you look into them you will find they are virtually impossible to get free.  Every one I have looked into charge for their services.  One is different.  It really is free.

This website, is actually free.  It has links that will take you to each of the three credit bureaus and you really can get your credit report from each one for free.

Be forewarned that the actual credit bureaus will each try extremely hard to sell you something, like your credit score or a credit monitoring service.  If you decline these items, you will still get your credit report and get it for free.  Seriously, it’s a minefield, but if you turn down all the up-sell attempts, you really can get your credit reports for free.

You will need the credit reports in order to file consumer statements.

To add a consumer statement to your TransUnion credit report, send your consumer statement removal request along with your name, address, and TransUnion File Identification Number (FIN) on your credit report to TransUnion Consumer Relations, P. O. Box 2000, Chester, PA 19022.  Here is a link to the web page regarding Trans Union consumer statements:

To add a consumer statement to your Experian credit report send your consumer statement along with a copy of your Experian credit report to :  NCAC, P.O. Box 9701, Allen, TX 75013.  Additionally, they ask that you include copies of two pieces of identifying information, e.g., driver's license, utility bill, bank statement, etc.  Here is a link to the web page regarding Experian Consumer Statements:  They may write you back telling you they put a "credit alert" on your account.  Just write back and insist on a consumer statement and they will comply.

To add a consumer statement to your Equifax credit report, send your consumer statement and a copy of your credit report to Equifax, P.O. Box 740256, Atlanta, GA 30374.  Here is a link to the web page regarding Equifax consumer statements:  

These consumer statements have worked.  I have not applied for credit recently but a friend of mine, who also has a consumer statement on file, did.   He applied for a credit card.  He got a call from the bank to confirm that he was really the one applying for the credit card.  Cool, eh?

*** Update - August, 2012:  It worked for me.  I applied for a new Sprint account and Sprint called me before issuing the account.  The representative told me she saw my consumer statement on my credit report and called before approving the account!



Try the first three techniques first but - There is a fourth technique that really works to prevent ID theft.  It is called a credit freeze.  There is a separate page one this website on credit freezes.  When you apply to borrow money from say, a bank, the bank checks your credit report before they loan you money.  When a criminal pretends to be you and applys to borrow money from a bank in your name, the bank checks your credit report.  A credit freeze makes it impossible for the bank to check your credit report.  When the bank can't check your credit they generally won't loan you or the criminal any money!

The drawback to a credit freeze is before anyone can obtain your credit report, you have to authorize it.  That includes your own legitimate creditors.  If you open accounts very often, it can get to be a bit of a hassle.  For most folks (who open few accounts) it isn't a problem.  If, for example, you move a lot, it can get a bit onerous.



Before I close, let’s talk a little about credit monitoring services.  There really isn’t anything wrong with them other than they are badly overpriced.  These services notify you via email when a credit report is issued in your name.  Say, for example, a criminal applies for a credit card in your name.  The bank who receives the credit card application will almost always pull your credit report before issuing the credit card.  When they do, this triggers the credit monitoring service to notify you of the credit check.  Now, if you had done what I told you to do and filed consumer statements with the credit bureaus you should also be getting a call from the bank, but I digress…  Either way, you can advise the bank that it is a fraudulent application and stop the card from being issued.

Trans Union offers credit monitoring service for $16.95 per month at

Experian offers credit monitoring service for $14.95 per month at

Equifax offers various credit monitoring services from $14.95 to $29.95 per month at

My recommendation is that you not subscribe to a credit monitoring service - at least not until you have exhausted all of the free remedies.  You certainly should not subscribe to a credit monitoring service until you have tried a credit freeze.  Most folks are not going to be the target of repeated criminal attempts to steal their identities.  For most people, using a credit card company that sends text messages upon usage, filing a consumer statement, and making annual reviews of their credit reports is perfectly adequate. 

There is an extremely small percentage of very unfortunate folks, however, for whom credit monitoring actually makes sense.  My guess is maybe one percent.  Identity thieves are networked to a degree.  They tend to sell and trade identities, sometimes multiple times.  If you find yourself the victim of repeated, unrelated, attempts to obtain credit in your name, subscribe to a credit monitoring service.



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How to Avoid ID Theft  Fraud Alerts  How to Freeze your Credit Report What is Identity Theft? Identity Theft Data Tax Return ID Theft