Precautions to Protect Your Identity From Being Stolen.

ALTHOUGH far from new, consumer identification fraud is increasing rapidly.

From fraudulent credit card purchases and unauthorized cell phone charges to the ultimate nightmare of comprehensive identity theft, the Information Age provides fertile ground for the growth of this crime.

Personal financial information, once protected by simple precautions such as locked file cabinets and steel bank vaults, is now more accessible than ever. That's because the Internet, while making financial transactions faster and easier, has also made committing identity fraud simpler.

But the Internet is not the only avenue thieves use to obtain your identification and financial information.

Information needed to make fraudulent purchases can come from the theft of a purse or wallet, a discarded credit card receipt or bill, or a legitimate charge receipt or check left with a merchant.

As a result, businesses must be as diligent as consumers in protecting information provided by customers.

Identity fraud starts with the most obvious means -- the theft of credit cards, a driver's license or other identification. If this occurs, file a police report immediately, cancel the stolen credit cards, freeze the vulnerable checking accounts, acquire a new driver's license, and notify postal and passport offices of any missing items.

More insidious identity fraud can start weeks before you have any indication that something is wrong. While it may be impossible to prevent identity fraud from happening to you, taking the following steps can limit your exposure.

* Don't carry your Social Security card or birth certificate with you.

* Don't provide your Social Security number, driver's license number or any other identifying information on the phone unless you initiate the call.

* Cancel credit cards you don't use regularly.

* Keep blank checks in a secure location.

* Shred voided checks, unused deposit slips and other disposable financial records.

* Arrange to pick up checks from the bank rather than having them mailed to you.

* Keep a list of your credit cards and bank accounts and their contact phone numbers in a secure place, separate from your cards. If your cards are lost or stolen, you should make contact quickly. Consider subscribing to a service to do this for you.

* Know when your cards are due to expire and watch for the replacement cards. Contact the issuing company if you don't receive the new card several weeks before the expiration date of the existing card.

* When selecting a personal identification number or password, don't use obvious numbers or words such as your birthday or part of your Social Security number.

Using technology available today, counterfeit checks and supporting identification can be easily created. Take the following steps to further safeguard documentation.

* Open and read all your mail, including what looks like unsolicited "junk" mail -- newly issued credit cards are sometimes sent in envelopes that look like advertisements.

* Have your name removed from direct marketing mailing lists to reduce unsolicited mail. Do that by writing to Mail Preference Service, Direct Marketing Association, P.O. Box 9008, Farmingdale, N.Y. 11735-9008.

* Cut up unsolicited credit cards or pre-approved credit card balance transfer checks and contact the company by phone and in writing to inform them that you did not apply for the card and want the account canceled.

* Have your name removed from mailing lists offered by the main consumer credit-reporting agencies to limit unsolicited credit-card or line-of-credit offers. Call [phone] or write to TransUnion Corp.'s Name Removal Option, P. O. Box 7328, Jackson, Miss. 39288-7328.

* Make sure you receive all statements of your bank, broker and credit card accounts every month. Don't ignore an unknown transaction just because it's a small amount. Thieves process fraudulent "test" charges through an active account to see if the owner is paying attention.

Your credit report is yet another vulnerable avenue through which thieves can gain access to your personal information. Consumers are sometimes shocked when they request their credit histories and find aberrations that they were not responsible for.

Obtain copies of your credit report at least once a year from each of the three major credit-reporting agencies. Because different creditors report your credit to different credit bureaus, you need to obtain a copy of all three of your credit reports to ensure the accuracy of your information. To get those reports, call Equifax, [phone]; Experian, [phone]; and Trans Union, [phone].

To report fraud, contact the three credit-reporting agencies listed above. They will put a fraud alert on your account, signaling not to approve credit without contacting you.

Harvey A. Goldstein is the managing partner of Singer Lewak Greenbaum & Goldstein LLP, a certified public accounting and management consulting firm based in Westwood.

Entrepreneur's Notebook is a regular column contributed by EC2, The Annenberg Incubator Project, a center for multimedia and electronic communications at the University of Southern California.