Holiday Shopping Season is Open Season for Identity Theft

Whether a customer's shopping preferences run more toward Black Friday or Cyber Monday, one thing is for sure: the holidays are open season for identity thieves. While monitoring individual credit is important year-round, it's especially critical during the year end-shopping blitz.

Customers can protect themselves from identity theft by being vigilant when shopping in person or online. But as author and identity theft expert Steve Weisman points out in his latest book, "50 Ways to Protect Your Identity in a Digital Age," customer behavior and preventive measures won't protect against unscrupulous employees at retail establishments or other companies that process personal and credit information.

Monitor your credit, free of charge
In addition to keeping information out of the hands of possible scammers, it's important to regularly monitor credit card and banking statements, as well as routinely review credit reports for suspicious activity.

Canadians are entitled to a free copy of their credit report once a year. While the two agencies that provide credit reporting - Equifax and Trans Union - attempt to make you pay for an instant online report, if you're willing to wait for the report to arrive via regular mail, you don't pay a cent. To apply for the free report, go to this link: Transunion, and follow the steps. In the case of Equifax, it's easier to call the toll free number (1-800-278-0278) and listen to a recording.

Now remember that this is just your credit report. To get your all-important credit score, you will have to spend a bit more. Both Equifax and Trans Union offer consumers real-time online access to their credit score (your credit report is also included). Equifax charges $23.95, while TransUnion's fee is $22.90.

Social insurance number? Yes. Credit card? No.
But just as potential identity thieves are adept at scamming personal information, so too are some credit monitoring companies.

Many of these outfits offer a free credit report as a hook for a monthly credit monitoring service. Less reputable ones are a gateway to the very identity theft consumers order their credit report to thwart.

While paying for a monthly credit monitoring service can be a useful strategy for at-risk individuals or anyone concerned about possible identity theft, handing over personal information and agreeing to a monthly or yearly contract with a dubious provider or without full knowledge is never a good idea.

Customers will always have to disclose their social insurance numbers when ordering a credit report, but if you're providing credit card information, you're most likely signing up for a monitoring service.

Freeze tag for adults
As an extra security measure, you can put a security freeze on your credit reports. Freezing credit won't impact credit scores or the regular use of credit cards or bank accounts. It will, however, block new credit inquiries -- both fraudulent and legitimate -- until the freeze is lifted or "thawed."

The major credit reporting agencies warn that freezing personal credit can have negative consequences. But Weisman says those concerns are exaggerated. "Thawing a person's credit usually takes about 24 hours. Sometimes it can take a little longer," he says. "But the only real downside is that you'll have to plan a day or two ahead for major purchases that require a credit check, like buying a new car or applying for a mortgage. And most people don't make those decisions spontaneously."


Motley Fool contributor Molly McCluskey writes about personal finance, investing and budget travel. Follow her on Twitter @MollyEMcCluskey or on Facebook.