When Cmdr. Gloria Christensen retired from the Navy at full disability because of a service-related head injury 10 years ago, she thought the worst was over. Without family members nearby, she asked for—and was granted—a custodian certified by the Department of Veterans Affairs to help her manage her financial affairs as she recovered.

Now, a decade later, Christensen (whose name and certain identifying details have been changed, at her request) has learned a harsh lesson that she wants to share with other veterans: Someone can cause you tremendous, sometimes irreparable, damage, just by having access to your Social Security number.

While Christensen recuperated from her injuries, she was sustained financially by allotments from her tax-free disability payments, which were administered by her custodian. Christensen never dreamed that the custodian was using her Social Security number to buy and sell stocks on the Internet — racking up enough profits that the IRS came after her for more than $200,000 in back taxes.

Now, after nine months of wrangling with lawyers, federal tax specialists, and her custodian, who denied everything, Christensen is sadder, wiser, and $7,000 poorer.

A universal number?

“Your Social Security number was never meant to be a universal number for all purposes,” says New Mexico State Rep. Danice Picraux, a Democrat who introduced legislation in Christensen’s home state to limit the use of Social Security numbers. Because of heavy opposition from financial institutions that routinely share Social Security numbers as a means of identifying customers, several portions of the proposal were struck down, but state legislators voted to limit the number of digits of a Social Security number that can be printed on receipts to four.

Such legislation reflects a concern that borders on urgency. The Federal Trade Commission (FTC) reported that in 2002, identity theft was No. 1 on its list of top 10 fraud issues, racking up 43 percent of its complaints. The Department of Justice reports that identity theft affects between 500,000 and 700,000 Americans a year, with hundreds of thousands claiming an average loss of $18,000 each.

And cleanup, if it can be achieved, is expensive and time-consuming. According to Frank Abagnale— the clever crook-turned-crime-consultant whose life recently was chronicled in the movie “Catch Me If You Can”—getting just your credit report scrubbed of the effects of identity theft can cost an average of $1,173 and take 175 hours. And since those hours probably won’t be consecutive, Abagnale notes that “it can be months or even years [before you] regain financial health.” And during that time, getting a job, obtaining loans and housing, or even something as simple as writing checks to pay utility bills and buy groceries can become a federal case—literally.

If you suspect or know you’ve been a victim of identity fraud, there are steps to take and no time to waste (see “If Your Identity Is Stolen,” below). But prevention is cheaper, easier, and more satisfying than cleanup. 

Don’t shrug off your personal risk. People you don’t know and probably will never meet are actively looking for credit card receipts in public trash cans, and “dumpster divers” specialize in going through household and business trash. They can fill out a change of address form with the post office to divert your mail to another location while they use your credit cards. They look for your business or personnel records at work. They can rob your home or use special software on your present—or even your discarded—computers. They can get your credit report by pretending to be a landlord or employer. They can obtain your birth certificate by posing as a lawyer and create a new identity with your name. They can buy personal data from dishonest employees of companies that have a right to your information, or buy your personal information from any number of online sites that sell detailed facts about you. They can counterfeit your checks or debit cards and drain your bank accounts. They can set up new bank accounts and cell phones in your name. 

And then they even can file for bankruptcy under your name to avoid the debts they’ve racked up while using your name.

Protect yourself

Abagnale, Picraux, and government agencies have some suggestions to help you keep your good name good and your private information private. One thing they all emphasize: Be pro-active and assume that somebody wants your private information. The best and cheapest way to protect yourself is to use a shredder (Abagnale advises a crosscut shredder) on every piece of mail you don’t intend to keep. Tear covers off catalogs and shred the covers, along with any other piece of mail that contains your name, address, account numbers, or any other information. In particular, shred every credit card application you receive and do not apply for, and when you cut up expired credit cards, do not throw all the pieces away at the same time or in the same place.

An easy way to remember the basics of protecting yourself is with the acronym scars: Sharing, Credit, Access, Recognition, and Safeguarding your Social Security number.

S is for Sharing, which is what happens when you’re on any kind of mailing list. The fewer you’re on, the more secure your personal information is. How to stay off them:

• Contact every financial institution with which you do business and notify them that you do not want them to share any information about you without your written permission.
• Whenever you fill out an application form, check the box that specifies that your information isn’t to be disseminated.
• Remove your name from mailing lists by writing the Mail Preference Service, P.O. Box 643, Carmel, NY 10512; or by registering online at 
  www.dmachoice.org/MPS/mps_consumer_description.php. Cost is $5 for online registration; expect to see results in about 3 months. 
• Register your phone number with the federal government’s new “do not call” list, which is aimed at stopping most telemarketers from calling you at home. You can register online at www.donotcall.gov, or by calling toll-free, (888) 382-1222, from the number you wish to register. You also can remove your phone number from call lists by writing the Telephone Preference Service, P.O. Box 1559, Carmel, NY 10512, or online at 
  http://www.dmaconsumers.org/cgi/offtelephonedave
• Remove your name from e-mail lists by registering at www.dmaconsumers.org/offemaillist.html. 
• Be aware that grocery store and other club and frequent-buyer cards reveal your buying habits and other information you might not want disseminated. Before you use the cards, count the cost: Is the discount worth it?
• Think twice before entering contests. The information you provide on entry forms—your name, address, and phone number—will almost certainly be sold to marketers. If you don’t believe it, enter a contest with a misspelling of your first name or add a nonexistent apartment number to your address and wait to see just how much junk mail you get addressed that way.

C is for Credit. Here are some tips for protecting your credit rating:

• Check your credit report at least once a year. The three major credit bureaus are Equifax, (800) 685-1111; Experian, (888) 397-3742; and TransUnion, (800) 916-8800. Expect to pay about $10 for each credit report.
• If a credit card bill doesn’t arrive on time, call the company to find out why, and have them check your mailing address to see if someone has filled out a change of address form without your permission.
• Place passwords on your credit card, bank, and phone accounts. Choose a combination of letters and numbers that can’t be guessed, and store any records of the passwords in a secure place.
• Subscribe to a service such as Privacy Guard, which provides its customers with contact information for each company that accesses their credit reports. Abagnale uses such a service, saying, “I consider their annual fee money well-spent.”
• Cancel all unsolicited pre-approved credit cards.
• When renewing credit cards, bank cards, and telephone cards, always request the new security code immediately. 
• “Don’t be surprised if you receive an unexpected call from a credit card company asking about an unusual purchase or series of purchases, even if you haven’t lost your card,” says Picraux. “The company is just doing its job of protecting its customers. But don’t give out any information if they don’t already have your account number—a legitimate caller will already have that information.”
• You should never pay up front for a loan or credit. FTC officials warn: “Remember that legitimate lenders never ‘guarantee’ a loan or credit card before you apply, especially if you have bad credit, no credit, or a bankruptcy.”
• Carefully examine all credit card bills before paying them, and personally reconcile your own bank statements promptly upon receiving them. 

A is for Access. Anyone—friend, foe, family, or stranger—who has access to any of your personal documents has you at their mercy.

• Take every id and credit card in your wallet and photocopy the front and back (spread several out on the machine and do them at once). Keep the copies in a locked, secure place in your home or safe-deposit box. In addition, do not carry id or credit cards with you unless you absolutely need them, and never take your Social Security card with you (keep it safely locked up, too).
• Report stolen or lost checks, credit cards, medical cards, military id cards, drivers’ licenses, and even library cards immediately.
• Make sure blank checks, bank statements, account information and other data in your home are not accessible to guests, domestic help, tradesmen and repair persons, or others. Consider buying a lockbox with a tamper-proof lock for such documents.
• Scrutinize your personal and business check forms. Abagnale says that annual check fraud losses exceed $20 billion. For more information online, visit the National Check Fraud Center’s Web site, www.ckfraud.org.
• Never mail your bill payments or checks from home. “They can be stolen from your mailbox and washed clean in chemicals,” explains Abagnale. “Take them to the post office.”

R is for Recognition. Be cautious about anyone you don’t know who tries to sell, or even give, you something or who appears to want your private information.

• Don’t give your Social Security number or any other personal information over the phone to retailers or other strangers.
• Don’t transact any business over the phone that you don’t initiate, and even then only do so with companies you know and trust. If you don’t want to hear from them again, tell telemarketers to take you off their call list. 
• Know who you’re dealing with. “Walk away from any company that doesn’t clearly state its name, physical address, and telephone number,” the FTC warns on its Web site. “A Web site alone or a mail drop box should raise suspicions.”
• If you buy online, be sure the site is secure by reading its privacy statements before purchasing or giving personal information. Use firewall software, especially if you use high- speed Internet services. Update virus protection software regularly. 

S is for Safeguarding. Keep your Social Security number safe.

• When asked for your Social Security number, ask questions: “Why do you need that number? What happens if I don’t give it to you? Can you accept any substitute?” If it’s mandatory that you supply your number, Abagnale advises that you request that your number either be truncated or obliterated on loan and credit applications and that “your original credit report be shredded before your eyes or returned to you once a decision has been made.” Abagnale says a lender or retail manager needs to retain only your name and credit score to justify a decision to grant or deny your credit request.
• Never put your Social Security number on checks, and only put your first initial on them. “Thieves will not know how to sign your checks and may not know if you are male or female,” explains Picraux.
• Order your Social Security Earnings and Benefits Statement once a year to check for fraud. If you find a problem, immediately call the Social Security fraud hot line, (800) 269-0271.

And finally, the warning from the TV show “The X-Files” is appropriate: Trust no one. 

Although most identity theft occurs when a stranger steals your personal information, you can lose as much or more to friends or family members who have access to your records. Even the bookkeeper or other trusted person you’ve treated like family for decades shouldn’t be given carte blanche access to your personal information, bank statements, or bills, as Christensen ruefully discovered.

“I have been doing this for 25 years,” says Abagnale, “and it is never the person who has worked for you for six months that rips you off for $25,000. It is always the long-trusted employee.”