3 Ways Consumers Fall Victim to Identity Theft

There's really only one way to protect yourself from identity theft. Stop spending money and trust no one. It's pretty easy.

OK, it isn't easy. Talk to enough victims of identity theft, and you start to realize that it really can happen to anyone -- and sometimes, no matter how careful you are, it can happen to you. That's why it helps to study how people's identities were stolen and learn from it. Here a few ways identity theft happens along with strategies to prevent it.

Information is out there for anyone to see. Of course you don't want to leave credit card statements lying around in public places, and when you discard your financial paperwork, it's smart to run it through a shredder. But sometimes when you're out in the world, your information can't help become a little exposed. You type a PIN number onto a pad and realize someone might have been looking over your shoulder. You hand your credit card to a waiter, who disappears for a while with it. Or you're in a crowded store, practically rubbing elbows with an identity thief.

[Read: 5 Things You Probably Didn't Know About Identity Theft .]

Sarah Dugo, co-founder of College Savings Dolls, a Schaumburg, Illinois-based company that sells dolls designed to inspire kids to go to college, got an unwanted education on identity theft a few years ago. She was at a crowded Best Buy and bought a big-screen TV for the Super Bowl.

"The cashier took my credit card and delivery information, but they left it all on the computer screen and walked away from the check-out area. I was at one of the checkouts in the smaller section [of the store], not the main front exit," Dugo says.

It turns out that the thief used Dugo's credit card information to order the same big-screen TV -- and had it sent to his address. "That's how they caught him," Dugo says. Still, the crook did enough damage to her credit report and credit score that it took two years for her to straighten it all out.

She was in one of those situations where the employee ringing her up was interrupted by a customer before finishing her transaction. Dugo isn't positive, but she thinks that's how someone was able to see her information and either jot everything down or snap a photo of the computer screen.

Dugo isn't sure what she could have done differently, but she figures that if she is ever shopping on another crowded weekend, she may make her purchase at the main entrance, where department sales clerks aren't likely to be pulled away from the register.

You put your wallet or handbag in a vulnerable position. "Several years ago, I was shopping at a Safeway near my house. I was in the shampoo aisle and a well-dressed man asked me to help him find a product his wife asked him to get," says Caren Kagan Evans, CEO of ECI Communications, a public relations firm in Rockville, Maryland.

While Evans pointed to the top shelf to show him where the product was, another man took Evans's wallet out of her handbag, which was in the top part of her cart.

"I didn't realize my wallet had been stolen until I went to check out," Evans says. "I ran home, contacted the credit agencies, contacted my bank and of course contacted my credit card companies."

Unfortunately, her Social Security number was printed on her health insurance card, so the two men now had that information as well.

[Read: What to Do If Your Wallet Is Lost or Stolen .]

"This was a large group of people that were doing this kind of thing up and down the East Coast," she says. "In a matter of just an hour, the team had used my cards at gas stations, Target and I can't remember where else. They also were able to get checks printed since they had my Social, and thousands of dollars disappeared from my checking account."

Evans says she was lucky because she got her money back and was able to fix everything relatively quickly. "I have heard stories of people who had their identities stolen where the perpetrator took out mortgages on properties, and stories of people who literally spent years getting everything straightened out," she says.

As for where Evans went wrong, she says it is easy to look at the situation now and realize her handbag was vulnerable. It was in the top part of the cart, and she was never planning on leaving it out of her sight. So you could take away from this story that you should never trust a stranger, even one who simply wants some help finding shampoo -- or, better yet, remember to keep your eye on your purse or wallet since somebody else otherwise will.

"I always have my purse on my shoulder at all times," Evans says. "I'll see women walking away from their cart for a moment, with their handbag on the cart, and I'll go up and tell them, 'Don't do that.'"

Evans also says she no longer signs her credit card statements, reasoning that a thief can study the receipt and later fake her signature. Sales clerks don't push her to sign for merchandise, she says -- they'll just ask to see her identification. "And when they do, I thank them," Evans says. "I appreciate it."

You trusted someone a little too much. Everyone knows the importance of vetting people who work for you, and yet you can never say it enough.

Arthur Gregory is a serial entrepreneur. He's a partner in two restaurants and owns EatUsa.net, which sells specialty foods and culinary gifts. Back in 2003, the printer who made his menus overheard Gregory tell a colleague that he was looking for a bookkeeper.

"I do that," the printer said. And Gregory, who liked the guy who made his menus, figured he'd give him the job.

As it turns out, the guy was trustworthy when it came to menus, but not when it came to bookkeeping. "He stole my identity," Gregory says.

And the guy didn't just go out to a department store and buy things in Gregory's name. He took out corporate credit cards in Gregory's name and tried to take over his business, contacting vendors in Gregory's name and doing a ton of damage. Gregory is still working on getting misinformation off of his credit report. Now he keeps all of his personal information in a lockbox, so not even his current bookkeeper can see it.

"I should have vetted him," Gregory admits, adding that if he had, he would have learned that the crooked bookkeeper had tried this sort of thing before.

[See: 10 Ways to Avoid Online Scams .]

Gregory, unfortunately, is also a case study in why it's impossible to prevent identity theft. Even if you were willing to live out the rest of your life on a deserted island or in a cave to wall yourself off from problems, you could discover you're already a victim of identity theft.

"A few weeks ago, I learned that my old college roommate took out some student loans in my name," Gregory says. At least, his main suspect is an old roommate who had a drug problem. "They were three student loans over a three-year period for $3,500, $3,000 and $3,000 that are now up to $26,000," Gregory says.

He learned about the student loans when he didn't get his last tax refund. The Internal Revenue Service grabbed it.

"For them to stop taking my tax refund money, I need to find three documents with my signature on them from 1982 through 1984," Gregory says. "Now, who holds onto documents for 30 years?"