12/05/2013 01:52 pm ET Updated Feb 13, 2014

Would You Rather Have Your Car Stolen or Your Identity?

Regardless of your preference on that question, be advised that 12.6 million Americans were victims of identity theft last year; during the same time, fewer than 1 million stolen cars were reported to the FBI.

Due to the rise of mobile technology, identity theft through smartphones has increased immensely. Our smartphones are a big part of our personal lives and our social lives. It's the personal aspect of your phone that puts smartphone users at greatest risk--and most Americans don't realize it.

According to survey by LifeLock, 71 percent of Americans still believe that losing their wallet is a greater security risk than losing their smartphone; yet nearly half of smartphone users keep online banking information on their phones.

Furthermore, over a third of smartphone users with a social network app on their phone don't turn off the GPS tracking capabilities used by social media website, and another third of smartphone users use no protection at all on their cellphones.

We all need to remember that smartphones are still relatively new and there are no clear regulations on what app developers can do. For example, many apps track your location, others may upload your personal contacts to a database, and some apps can even access sensitive information from your phone such as bank accounts and contact information. Though there are no regulations on these features, there is always a way to prevent any apps from collecting this information.

The problem is that most smartphone users have few ideas on how to protect their phone. LifeLock makes the following suggestions in helping smartphone users secure confidential information:
  • Use a password to lock your phone. Don't use your banking PIN or your birthday.
  • Do not let any apps use the GPS location capabilities of your phone unless necessary.
  • Ensure that apps with personal information all have different passwords, and turn off auto login.
  • When you replace your phone or give it away, erase all personal information.
  • Only download apps that look trustworthy or have positive customer reviews. Be sure to check the app reviews.

Smartphones are a great tool that simplify life, but taking a few precautions and securing the info you put on your phone may result in a more important contribution to keeping your life simple. Identity theft will likely cost you lots of time and lots of money.

Note: This article and the opinions expressed here are from Russ Warner, Internet safety expert and CEO of ContentWatch, makers of parental control software Net Nanny.

Follow Russ Warner on Google+.