Can you believe that 8.3 million Americans were the victims of identity theft in 2005? And the number is rising. It’s true that in approximately half the incidents, thieves only obtained goods or services worth $500 or less; but in 10 percent of cases, thieves got at least $6,000 worth of goods or services. How is this possible and what can we do to protect ourselves?

What happens is that identity thieves take personal information and use it to impersonate a victim, stealing from bank accounts, establishing phony insurance policies, opening unauthorized credit cards or obtaining unauthorized bank loans.

The use of stolen credit card numbers is among the most common forms of identity theft, but some schemes use electronic means, including online scams like "phishing," in which thieves use email inquiries purporting to be from financial or other online organizations, to obtain sensitive account information. Others might use more old-fashioned methods, such as “dumpster diving”, meaning rooting around in people’s garbage to collect financial information. The advent of new, “no-swipe” credit cards that transmit account and user information through radio frequency identification may make it possible for identity thieves to use a simple electronic device to capture the information.

Identity theft can be covered by insurance. Some companies include coverage for identity theft as part of their homeowner’s insurance policy; others sell it as either a stand-alone policy or as an endorsement to a homeowner’s or renter’s insurance policy.

How does one go about avoiding identity theft? Here are some tips:

Keep the amount of personal information in your purse or wallet to the bare minimum. Carry the least number of credit cards and other personal information.

Guard your credit card when making purchases. Shield your hand when using ATM machines or making long distance phone calls with phone cards. Don’t fall prey to “shoulder surfers” who may be behind you. Always take credit card or ATM receipts.

Proceed with caution when shopping online. Make sure that you are buying from a reputable retailer with a secure network. Monitor your accounts. If you suspect a problem, contact your Credit Card Company or bank immediately. Shred any documents containing personal information.

Password protect your credit card, bank and phone accounts if you can. Avoid using easily available information like your mother's maiden name, your birth date, any part of your Social Security number or phone number, or any series of consecutive numbers. Don't give out personal information.