ID Theft Red Flags

My credit-card company called me and said that somebody tried to charge a penny to my account. When I explained that it wasn't my charge, the issuer canceled my card and sent me a new one. Was this an identity thief at work? In the future, what can I do to protect myself from identity theft? -- R.G., Alexandria, Va.

This is a common ploy for ID thieves, who test out your credit card with a small charge and then, if it goes through, start making big purchases. Crooks may even use programs with algorithms that run 16-digit numbers until they get a hit. Then they try to charge a penny or a dollar or two, making it look as if a charity is the recipient, says Adam Levin, chairman of Identity Theft 911, which sells ID-theft prevention services to businesses. "They're hoping that because of the small size of the transaction, it will slip through filtering systems."

Another trick ID thieves use is to impersonate an employee of your bank's fraud department and fish for your sensitive information. After offering enough of your personal details to gain your trust, they may ask you for your Social Security number or the security code on your credit card. If you get a suspicious call, call the customer-service number on the back of your credit card.

It's a good idea to regularly check your bank and credit-card balances online for suspicious transactions. You should also check your credit report to see whether anyone has applied for credit in your name. You can get one free credit report per year from each of the three credit bureaus at www.annualcreditreport.com. You could also put a credit freeze on your account, which blocks potential lenders from getting access to your credit report without your authorization. (Your current creditors are exempt from the freeze, and you can make charges to your current cards without unfreezing your account.) The protection works only if you freeze your credit at all three bureaus (Equifax.com, TransUnion.com and Experian.com). It generally costs $10 at each bureau to freeze the account and $10 to unfreeze it.