Jean Chatzky: Beware, the Cost of Identity Theft Is Soaring

When you think about identity theft, chances are you imagine some stranger rummaging through your bank statements and tax returns or getting hold of your credit card numbers or your social security number. But the thief may be much closer to home. According to a Javelin Strategy & Research survey, identity theft by someone you know -- (also called friendly fraud) grew by 7% last year.

Cost of Identity Theft Rises 63%

That figure is a little misleading, though. The number of incidents of identity theft overall actually fell by 28% over the past year to 8.1 million people, according to the study. But while the incidents are down, the average cost to victims rose by 63% from $387 in 2009 to more than $600 in 2010.

Personal Finance expert Jean Chatzky says that with rising costs, ensuring that your identity is safe is more important than ever.

Surprising Steps to Stay Safe

Fact is, many of us take steps to save for retirement and to refinance our loans when interest rates are low. But when it comes to protecting ourselves from identity theft, we turn a blind eye. In the video above, Chatzky, author of the book, Money 911, explains the different ways your identity can be stolen and tells you what you should do to stay safe.

Among the steps she encourages are some surprising ones: Make sure you bank on line and stop transacting over certain Wi-Fi hotspots. Chatzky even explains how you can keep a list of passwords in your wallet and still be safe. Watch the video to learn more.