Even the Department of Consumer Affairs in Sacramento, Calif., had a recent incident in which an employee sent the Social Security numbers of 5,000 staff members to her Yahoo e-mail account on her last day of work.

"It's not from people stealing your wallet or going through your trash," says Cavanagh. "It's people who work for the businesses who have our personal information."

The security expert also notes the irony of giving out all your personal information to a company in order to protect that information - it's just as likely as any other outlet to have a disgruntled employee or data breach.

Cavanagh suggests taking proactive steps to guard your own information the old-fashioned way: Monitor your accounts and credit report; be stingy about giving out your Social Security and credit-card numbers; and if a store or organization demands information that you don't think is necessary to provide, simply take your business elsewhere.

"There's no 100% guaranteed way to prevent identity theft," she notes. "What you do is you minimize your risk by your behavior, guarding your personal information and keeping track of your credit report."

The important thing to keep in mind when hearing a company's sales pitch to protect your information is that most of them get paid to use the same resources available to you - for free. Like many businesses, they are simply trying to earn some cash by doing the work for you and building upon the hype about a problem that is less serious than is often presented.

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