Wade: First, let me describe the crime of identity theft so that it is clear what we are talking about. Identity theft occurs when someone steals your personal information to apply for credit cards, take out a home or real estate loan, rent an apartment, access bank accounts or commit many other crimes using your identity.

The effects of this crime can be devastating. It can take years and hundreds of hours of effort to repair your credit and close all of the fraudulent accounts and loans. The scary part is that some of your readers could be victims of this crime right now and not be aware of it.

Identity theft happens in many ways. In the physical world, it commonly results from someone stealing mail, copying credit cards in a retail establishment, or looking for discarded credit card statements in the trash.

Online threats that lead to ID theft are increasing in scope and frequency. Hackers may break into unprotected home PCs to steal sensitive personal information such as social security numbers, tax returns, and passwords.

Viruses and spyware in particular can sometimes log keystrokes on the computer. In addition, spam email or seemingly legitimate websites can trick people into revealing personal information. These techniques are called "phishing" and "farming" respectively.

David: Let's get personal. At least once a week, when my wife and I are out shopping, some store, doctor, or office insists on making a copy of a driver's license. I went into La-Z-Boy last month to buy a chair and they didn't want to sell me one unless I let them keep a copy of my driver's license in their file cabinet. Needless to say, I refused (and still got the chair -- which is comfy as heck, by the way). What are some ways we can protect ourselves from identity theft when we're out in the real world?

Wade: Whether they're in the physical world or online, consumers should exercise diligence when providing personal information to others. The most important step is to ensure that they are dealing with a legitimate organization.

Take care with any documentation that references personal information. Examples are credit statements, bills, various forms of identification, ATM receipts, credit card receipts, etc.

Only provide a social security number when absolutely necessary. Employers and financial institutions need a Social Security number for wage and tax reporting purposes. Other businesses may ask for a Social Security number to do a credit check when you are applying for a loan, renting an apartment, or signing up for utilities.

Sometimes, however, they simply want a Social Security number for general record keeping. If someone asks for your Social Security number, ask:

• Why do you need my Social Security number?
• How will my Social Security number be used?
• How do you protect my Social Security number from being stolen?
• What will happen if I don't give you my Social Security number?

David: I almost hate to ask this, because it's terrifying. But here goes. Can you give us some examples of identity thefts that have occurred?