Answer: You’ve pointed out another problem with using Social Security numbers as an all-purpose identifier. Federal and state laws require businesses that collect Social Security numbers to protect that information. But the fact remains that the more entities that have your number, the more vulnerable you may be to identity theft.

As an individual, you’re unlikely to change the IRS’ mind about the necessity of collecting this information. But when you’re asked for your Social Security or tax ID number, it’s fair to ask the requester how your information will be protected. That at least puts the requester on notice that you expect the laws regarding the safeguarding of personal information to be followed.

Answer: More than half the states have banned the use of Social Security numbers on health insurance cards, but those laws don’t apply to the federal Medicare program. Unless Congress acts to change the federal law, you’re stuck with having your Social Security number as your Medicare identifier.

The Privacy Rights Clearinghouse recommends you protect yourself from identity theft by making a copy of your Medicare card and using a black marker to cross out the last four digits of your Social Security number, or cutting out the last digits with scissors. Then you could carry that version of your card, so that if your wallet is stolen the thief doesn’t have access to your full number. You would still need to bring your original card the first time you visit any new healthcare provider, but you wouldn’t have to carry it with you all the time.

Answer: New Social Security numbers wouldn’t necessarily protect you from identity theft and could create additional complications.

Thieves might still be able to use your old numbers to establish new accounts, and those fraudulent accounts could show up in your credit reports. If for some reason the credit bureaus didn’t combine the records for your old and new numbers, then you could be left without any credit history at all, which could make getting future credit difficult.

The Identity Theft Resource Center, which advises victims and has a fact sheet on this issue (No. 113, available on its website at http://www.idtheftcenter.org), typically doesn’t recommend applying for new numbers. Instead, it suggests credit freezes, which prevent most lenders from viewing your credit reports or establishing new accounts without your consent.

Credit freezes aren’t foolproof, since some lenders don’t check with credit bureaus before opening accounts. Credit freezes also won’t prevent a thief from using your Social Security numbers to commit healthcare fraud or criminal identity theft (which is when a thief pretends to be you when he or she is arrested). Also, there may be fees involved with freezing and unfreezing your credit reports.

But credit freezes are probably your best defense at this point, before you’ve been victimized. You can learn more about credit freezes at the Consumers Union site, DefendYourDollars.org.

Answer: If she hasn’t done so already, your wife should call the police to report the crime and get a copy of the report in case she needs it later to prove she’s a victim of identity theft.

Your wife is the one who needs to have fraud alerts placed on her credit reports at all three of the major credit bureaus: Equifax at (800) 525-6285, Experian at (888) 397-3742 and Trans Union at (800) 680-7289. These alerts are good for 90 days and can be renewed. It’s unfortunate the bureaus are using these help lines to pitch products, but you don’t need to buy anything to get a fraud alert placed on your files. In two or three months, she should use http://www.annualcreditreport.com to get a free look at her credit reports to make sure no one has opened accounts in her name.

Your wife also may want to consider a credit freeze, which locks up her credit reports to make it much harder for someone to apply for credit in her name. Get more information about these freezes, which typically involve fees, at http://www.financialprivacynow.org.

In addition, she needs to call your state’s department of motor vehicles to report the stolen license. If she discovers later that someone is using it, she can request a number change.

For more on coping with stolen information and dealing with identity theft, visit the Identity Theft Resource Center at http://www.idtheftcenter.org.

Answer: In both instances, sensitive financial documents were entrusted to the U.S. mail system. Although this is common, it’s certainly not secure, since such mailings aren’t tracked and they certainly aren’t encrypted. The two taxpayers didn’t think to question the way their papers had been handled until those papers went missing, but both taxpayers and tax preparers would be wise to use more secure methods to transmit sensitive data.

Answer: You’ve learned a couple lessons, foremost among them that you need a new tax pro. Filing your return without letting you see it was a definite no-no.

Another lesson is that your private financial data probably shouldn’t be entrusted to the U.S. mail system. It’s more secure to drop your documents off with your tax preparer and pick them up yourself, along with a copy of your return, when he or she is done. The original return can be electronically filed using the IRS’ secure, encrypted system, eliminating the need to use the mail.

You can put 90-day fraud alerts on your credit reports at the three major bureaus (Experian, Equifax and TransUnion). Fraud alerts notify lenders that they should take extra steps to verify identity before opening accounts in your name. For more protection, you may want to consider a credit freeze, which doesn’t rely on lenders’ sometimes-wavering vigilance but that allows you to shut off access to your credit reports, preventing thieves from opening new credit accounts. For more information, visit the Consumers Union site www.financialprivacynow.org.

Answer: You’re smart to be careful with your Social Security number, but if you want this company’s service, you’ll probably have to cough up the number.

Lenders are not the only businesses that want to check your creditworthiness before they’ll do business with you. Cellphone carriers, landlords, utilities and employers often want a look at your credit reports or credit scores as well. Some states have passed laws restricting how credit information is used in certain circumstances, but in many cases, individuals have just two choices: comply with the request for Social Security numbers or don’t do business with these companies.

That’s not to say you should hand out your number to any business that asks. If the business isn’t establishing a credit relationship with you, and isn’t in financial services — which are required to have your Social Security number to report tax information to the IRS — you should find out why they’re asking for the number and consider declining.

Answer: Run, don’t walk, to your computer and point your browser to the free credit report site, www.annualcreditreport.com. (This is the only address to use; beware of fake and lookalike sites.)

You need to check your reports to see if your good name has been hijacked by an identity thief. While many issuers are closing inactive accounts and raising interest rates for broad swaths of their customers, most aren’t referring to nonexistent debt as the reason to do so.

If you discover credit accounts or collections that aren’t yours, you’ll need to file a police report and dispute the errors with the credit bureaus. The Identity Theft Resource Center at www.idtheftcenter.org has fact sheets and other helpful information to guide you through this process.

If you have been the victim of identity theft, you should at least put fraud alerts on your reports at the three bureaus and consider freezing your credit. A fraud alert signals to lenders that they need to verify the identity of anyone trying to open an account in your name, while a credit freeze would prevent the lender from accessing your credit reports, which should halt new credit accounts altogether unless you “unlock” the report in advance. Again, the Identity Theft Resource Center has more information.

If you don’t spot any obvious problems, it could be that the retailer was using outdated information. You can ask it to reconsider its decision, although most issuers are reluctant to reopen accounts once they’re closed.

If you’re concerned about further account closures, simply use one or two of your cards to make small purchases each month and pay the balances off in full. This should prevent further account closures.

Here’s how it works. The consumer writes to each of the three bureaus, requesting that they freeze his or her report. Such a freeze prevents a prospective lender from viewing the consumer’s report; since most lenders won’t make a loan or open a credit account without seeing the bureau reports first, this effectively shuts down the ID thief. (The freeze doesn’t apply to the consumer’s current lenders, who can continue to peruse the consumer’s reports.)

If the consumer wants to lift or �thaw� the freeze to get credit, he or she uses a personal identification number to do so. Some states require the bureaus to comply within a specified period, typically 3 days.

Some states limit credit freezes to identity theft victims only, but most let any consumer request a freeze. The bureaus typically charge a small fee�generally around $10 each�to institute the freeze and another fee to lift it.

Here’s a list compiled by Consumers Union of the states that have passed laws, their effective dates, cost limits and where you can go for more information. (For updates and more details, please visit FinancialPrivacyNow.org, which is maintained by Consumers Union.)

California
Who: All consumers
When: Effective January 1, 2003
Cost: No fee for victims to place the freeze, others pay up to $10 per freeze; fee to lift freeze capped at $10 for temporary lifting for a time, $12 for temporary lift for one creditor.
For more information: www.privacyprotection.ca.gov

Colorado
Who: All consumers
When: Effective July 1, 2006
Cost: No fee for first freeze; $10 to place a second freeze, $10 to lift, $12 for temporarily lift for one creditor
For more information: www.ago.state.co.us

Connecticut
Who: All consumers
When: Effective January 1, 2006
Cost: $10 to place or lift, $12 to lift for one creditor only
For more information: www.ct.gov/ag/

Delaware
Who: All consumers
When: Effective October 9, 2006
Cost: $20 to place, free to temporarily lift for a period of time or specific creditor and to remove.
For more information: www.consumersunion.org/pdf/security/securityDE.pdf

Florida
Who: All consumers.
When: Effective July 1, 2006
Cost: No cost for ID theft victims (with investigative report) and seniors aged 65 years and older. For all others, $10 fee to place, temporarily lift or to remove a security freeze.
For more information:
www.consumersunion.org/pdf/security/securityFL.pdf

Hawaii
Who: ID theft victims only, with a police, investigative report or complaint filed with a law enforcement agency.
When: Effective January 1, 2007
Cost: None.
For more information: www.consumersunion.org/pdf/security/securityHI.pdf

Illinois
Who: Before January 1, 2007, only identity theft victims. After January 1, 2007, all consumers.
Cost: $10 to place, lift or remove. Free to victims with police reports and seniors 65+ years old do not pay.
When: Effective January 1, 2007
For more information: www.consumersunion.org/pdf/security/securityIL.pdf

Kansas
Who: ID theft victims only, with a police, investigative report or complaint filed with a law enforcement agency
When: Effective Jan 1, 2007
Cost: None
For more information: www.consumersunion.org/pdf/security/securityKS.pdf

Kentucky
Who: All consumers
When: Effective July 11, 2006
Cost: No cost on ID theft victims who provide a police report. Others pay up to $10 to place, remove, temporarily suspend, or have PIN reissued.
For more information: www.consumersunion.org/pdf/security/securityKY.pdf

Louisiana
Who: All consumers
When: Effective July 1, 2005
Cost: $10 to place, $8 to lift, no cost for ID theft victims or persons age 62 or older
For more information: www.ag.state.la.us/calerts/alert0015.aspx

Maine
Who: All consumers
When: Effective Feb. 1, 2006
Cost: No cost on ID theft victims who provide a police report. Others pay up to $10 to place, remove, temporarily suspend, or have PIN reissued, and $12 to lift for a specific
creditor.
For more information: www.consumersunion.org/pdf/security/securityME.pdf

Minnesota
Who: All consumers.
When: Effective August 1, 2006
Cost: No cost on ID theft victims who provide police report. Others pay $5 to place, remove, temporarily suspend, lift for specific creditor, or have PIN reissued.
For more information: www.consumersunion.org/pdf/security/securityMN.pdf

Nevada
Who: All consumers
When: Effective October 1, 2005
Cost: No fee for ID theft victims who submit a police report, for others $15 to place, $18 to lift, $20 to lift for one creditor
For more information: www.consumersunion.org/pdf/security/securityNV.pdf

New Hampshire
Who: All consumers
When: Effective January 1, 2007
Cost: No fee for ID theft victims who submit a copy of a police report, investigative report, or complaint to a law enforcement agency, for others $10 to place, temporarily lift
or remove
For more information: www.consumersunion.org/pdf/security/securityNH.pdf

New Jersey
Who: All consumers
When: Effective January 1, 2006
Cost: No fee for initial freeze. Up to $5 to remove, temporarily lift or have PIN reissued.
For more information: www.njdobi.org/creditfreeze.htm

New York
Who: All consumers.
When: Effective November 1, 2006
Cost: No fees for victims. Free to place first time for everyone. After first time, or to lift temporarily or remove there is a $5 fee.
For more information: www.consumersunion.org/pdf/security/securityNY.pdf

North Carolina
Who: All consumers
When: Effective December 1, 2005
Cost: No cost for ID theft victims with valid report/complaint with law enforcement agency. For others, up to $10 to place, remove, or temporarily suspend.
For more information: www.ncdoj.com

Oklahoma
Who: All consumers
When: Effective January 1, 2007
Cost: No fee for ID theft victims with investigative report and no cost for seniors 65 years +.
For more information: www.consumersunion.org/pdf/security/securityOK.pdf

Rhode Island
Who: All consumers
When: Effective January 1, 2007
Cost: No fee for ID theft victims or seniors 65 years +.
For more information: www.consumersunion.org/pdf/security/securityRI.pdf

South Dakota
Who: ID theft victims with a police report
When: Effective July 1, 2006
Cost: None
For more information: www.consumersunion.org/pdf/security/securitySD.pdf

Texas
Who: ID theft victims with a police report
When: Effective September 1, 2003
Cost: One $8 fee
For more information: www.consumersunion.org/pdf/security/securityTX.pdf

Utah
Who: All consumers
When: Effective September 1, 2008
Cost: Fees must be �reasonable�
For more information: www.consumersunion.org/pdf/security/securityUT.pdf

Vermont
Who: All consumers.
When: Effective July 1, 2005
Cost: No fee for victims; $10 for all others
For more information: and www.consumersunion.org/pdf/security/securityVT.pdf

Washington
Who: ID theft victims, including persons who receive a notice of a security breach of computerized personal information
When: Effective July 24, 2005
Cost: None
For more information: www.atg.wa.gov

Wisconsin
Who: All consumers
When: Effective January 1, 2007
Cost: No fee for victims. Up to $10 for others to place, thaw or remove freeze.
For more information: www.consumersunion.org/pdf/security/securityWI.pdf

How long the states will be able to offer this solution to their residents is uncertain. Some in Congress want a single federal standard for credit freezes that would pre-empt state laws. The problem with federal legislation is that it’s usually less consumer-friendly than

My parents are torn about what to do. I feel that she needs to be turned in so that they don’t have to pay this debt themselves, using their retirement money to do so.

They are concerned for the kids, but I feel that she needs to learn a lesson and that the family can take care of the kids. My sister suffers from bipolar disorder. I’m not sure what she would do if my parents turn her in.

Answer: If your mother lives in California or one of the other states that allows credit freezes, she should put one in place immediately — as should you and the rest of your family.

A credit freeze prevents anyone from opening credit accounts in your name, and is a much stronger protection than the fraud alerts that credit bureaus typically recommend.

A family member who has stolen one person’s identity could well steal the identities of others, because she probably knows the essential details — names, Social Security numbers, dates of birth and addresses — that would allow her to commit more of these crimes.

You seem to understand that to avoid responsibility for this debt, your mother almost certainly will need to file a police report, which means your sister could be prosecuted and sent to jail.

Occasionally lenders will let a victim off the hook without such a report if the thief admits the deed, commits to making payments and has the means to do so, said Linda Foley. She is co-founder of San Diego’s Identity Theft Resource Center, which helps victims of this kind of fraud.

The family typically needs to hire a lawyer to conduct such negotiations and draw up the necessary paperwork, Foley said.

It doesn’t sound like your sister’s a great candidate for this kind of deal, however, unless she’s gotten her act more together than your letter would indicate.

Your best move now, after recommending credit freezes for your family members, is to point your parents to the Identity Theft Resource Center, which has resources for victims of familial identity theft. Then back off. This is your parents’ decision to make.