Fortunately, there are steps you can take to prevent identity theft from happening to you:
Only make purchases on secure websites. Credit card fraud is the most common type of identity theft. For online purchases, stick with well-known retailers or smaller sites that use PayPal or Google Checkout.
Check your credit report. Your credit report will give you an idea of your ID security. It will also let you see whether someone has opened new accounts under your name.
Learn how to spot phishing scams. Phishing scams work by pretending to be a site you trust. Check the URL before clicking the link in an email or on a site, and make sure you aren't being asked for sensitive information that seems out of the ordinary.
Install spam-filtering software. A good spam filter can remove junk email that creeps into your inbox, spam messages that can make you (and your identity) vulnerable to phishing and viruses (like Trojan horses) that can compromise your computer's security.
Don't double-dip passwords. Make sure you have a different password for each of your online accounts -- and change them frequently.
Take telephone precautions. Never provide personal information over the phone if you didn't initiate the call -- especially calls that promise an extravagant vacation.
Recognize "familiar fraud." Keep your SSN and other information to yourself because even people you know and trust can misuse your personal information.