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Protecting your financial information is a critical factor in preventing identity theft, reports Privacy Matters Identity^SM, a leading security membership program offered by Adaptive Marketing LLC, but too often, consumers fail to take even the smallest precautions. Unfortunately, these oversights can wind up costing them significant amounts of time and money to restore their identities.

A 2006 survey released by the Council of Better Business Bureaus and Javelin Strategy & Research noted that 63% of potential acts of identity fraud could be avoided through heightened consumer awareness. Meanwhile, an “Identity Theft: The Aftermath 2006” survey conducted by the Identity Theft Resource Center® (ITRC) noted that the average fraud victim spent $1,884 in out-of-pocket expenses in 2006 to combat the effects of identity fraud on existing accounts and $1,342 in out-of-pocket expenses for newly opened fraudulent accounts. The ITRC survey also noted that the average victim needed 97 hours to resolve problems with existing accounts and 231 hours — nearly six full work weeks — to repair the damage created by newly opened fraudulent accounts.

Clearly, the best way to deal with identity theft is to avoid it altogether, but that requires an understanding of what the biggest risks are and how to protect against them. As a public service, Privacy Matters Identity offers a few valuable tips on safeguarding financial information:

-- Lock up the mail. Regular mail, whether it’s an incoming offer for a new credit card or an outgoing bill being paid with a signed check, can contain enough information for an identity thief to set up a new identity, and ID thieves love to rummage through other people’s mail. The safest way to send and receive mail is through a locked mailbox or the local post office. Vacationers should be sure to have the post office hold their mail rather than allowing it to accumulate in the mailbox or on the front stoop, advises PMIdentity.com.

-- Shred “actionable” materials. It’s not enough to just throw away credit card receipts, credit card offers and other papers that contain personal data. ID thieves are happy to engage in “dumpster diving,” i.e., wading through garbage for information and offers that can be used to establish false identities. It’s therefore critical to put any documents that contain identifying information through a paper shredder before hauling them out to the garbage cans.

-- Ignore unsolicited, unfamiliar e-mails and web links. Identity thieves who use “spam” to target their victims count on curiosity, urgency and ignorance. E-mails that promise readers something that sounds too good to be true are usually just that — too good to be true. NEVER supply personal information — bank or credit card account numbers, Social Security numbers and more — in response to an unsolicited e-mail or e-mail link. People who receive “urgent” e-mails that appear to come from their banks or credit card issuers should respond by calling or showing up at the financial institution to investigate the matter further.

-- Protect passwords. Online transactions, including banking, shopping and more, continue to rise, as do attempts by hackers and other cyber-thieves to find ways to tap into that “market.” To protect their financial information, consumers need to develop online passwords that can’t be guessed or deciphered. That means eliminating passwords that rely on family names and birthdays — or any other words or phrases that can be easily associated with someone. Fortunately, there are password manager programs available today that can help consumers manage and access their passwords with a high degree of confidence.

-- Store financial documents safely. This may seem like an obvious tip, but too many consumers throw their credit card receipts into their shopping bags rather than storing them in their wallets or purses. Once the shopping bag is thrown out, so is the receipt, and all it takes is one enterprising dumpster diver to create a whole new identity. The point is that anything and everything that contains identifying information about an account and/or the account holder should be considered a “financial document” and should be protected as diligently as, say, a credit or ATM card.

The good news is that, these days, identity theft is no longer a crime that flies under the radar. As consumers take greater notice of the risks, they can also take a variety of commonsense steps to safeguard their financial information, notes Privacy Matters Identity.