Your doctor's office, your employer, the DMV -- they all want your Social Security number. But the group that wants it most? Identity thieves.
Social Security numbers are "the crown jewel of information" for thieves, says Neal O'Farrell, executive director of the nonprofit Identity Theft Council, which provides support to people whose identities have been stolen. A thief can take that nine-digit number and open a line of credit, file for a tax refund or apply for a job -- all in your name.
"Last year alone, thieves stole about $5 billion just through identity theft-related fraudulent tax refunds," O'Farrell says. "It's very easy to do." To make matters worse, arrested identity thieves may give police their assumed identity -- so victims end up not just with bad credit, but with an arrest record too.
But how do identity thieves get a hold of that valuable number? The old-fashioned way is to steal someone's mail. This still happens, says O'Farrell, and some street gangs even specialize in this activity. But data breaches affect far more people: Over the past five years, an average of one reported data breach has occurred every day in the U.S., with some affecting millions of records.
To protect your Social Security number -- and yourself against identity theft -- follow these three steps:
1. Freeze your credit
A credit freeze prevents anyone from opening a line of credit in your name unless you remove the restriction. Existing creditors will still generally be able to check your credit.
To create a freeze, you'll need to contact the three major credit bureaus: Equifax, Experian and TransUnion. A small fee typically applies to freeze or un-freeze credit, so this may not be the best option if you apply for credit frequently. Freezing your credit also prevents potential employers from checking it, so you might wait if you're on a job hunt.
2. Monitor your credit report closely
Each of the three credit agencies is required by law to provide one free credit report per year at annualcreditreport.com. Stagger your requests so that you get a picture of your credit every four months.
3. Try not to give out your Social Security number
Some people, such as your doctor or accountant, really do need your Social Security number. Otherwise, says O'Farrell, refuse "for as often and as long as you can." If you must give the number, it's worth asking about security measures:
- Are background checks required for their employees?
- How good is their network security?
- What are the office policies for sharing information?
No one is completely safe from identity theft. But these simple precautions can dramatically reduce your risk.