People think of identity fraud as someone impersonating them for an extended period of time, getting new credit cards and taking out loans in their name. This is actually a rare situation. In 2008, say Javelin researchers, when the source of the stolen information was known, 43% of the time it was due to lost or stolen checkbooks, wallets, or credit cards, by far the largest single source of access to information for identity thieves. Information stolen through online access accounted for only 11% of identity thefts.

When identity thieves do get your information, the most common way to take your money is through the use of your ATM PIN number from any handy ATM machine. Although these machines do have cameras that record the picture of the thief, a well positioned hat can hide the face well enough to prevent identification and, of course, the cash is untraceable.

To lower the chances of becoming a victim of identity theft, consumers should take the following very simple steps:

1) Do not write down your PIN number and keep it in the same location as your ATM card. Many people even write their PIN number on their ATM card, making it easy for thieves to take their money should the card be lost or physically stolen. Be careful to avoid anyone observing you as you enter your PIN number as identity thieves will often place themselves in a location to observe or overhear sensitive personal information during legitimate transactions.

2) Never reply to an email asking you to give your social security number or other sensitive personal or financial information, even if it claims to be from a bank or company with whom you regularly do business. Instead, go directly to the company's website or call their customer service number that you obtain from a source other than the email itself. Ask them if they sent such a request and tell them you prefer not give out such information by email. Of course, if you initiated the transaction, that's a different story. Sending payments over the internet using a secure payment system is actually safer according to Javelin's research report than mailing your payments. There is a much higher likelihood of your mail being intercepted than having an encrypted online transaction hacked.

3) Check the policies of your own credit cards, says Javelin, to understand who is liable in the event the card is stolen or charged without your authorization. Look for cards that offer you zero fraud liability. Whichever credit card you have, check your monthly statements carefully to make sure that all the charges that appear are legitimate. If you see a charge which you did not make, call the credit card issuer immediately to dispute the charge, no matter how small. Sophisticated thieves sometimes make a small charge to a credit card to verify that it is active before really running up the numbers. Some of these test charges can be as small as 25 cents, an amount they hope is too small for you to take action until it's too late.

Author: Brad Sylvester