Identity theft is again making headlines after credit-card processor Heartland Payment Systems (HPY) announced that it fell victim to what could be the biggest security breach in history.

The Princeton, N.J.-based company, which handles 100 million credit-card transactions per month for more than 250,000 U.S. businesses, disclosed that hackers may have gained access to credit card magnetic strips, including credit-card numbers and expiration dates, which can be used to duplicate a card. The company became suspicious of the breach after Visa (V) and MasterCard (MA) alerted it to questionable activity on some of their credit cards.

Even without counting this latest incident, identity theft is the largest consumer complaint in the country, according to the Federal Trade Commission. In 2007, 32% (roughly 258,000) of consumer complaints filed with the FTC involved identity theft, according to the most recent data available.

One of the worst things about identity theft is that victims often don't know what's happened until substantial damage to their credit score or their savings has been done, says Tom Rusin, president and CEO of Affinion Security Center, a Norwalk, Conn.-based identity theft protection company. And while Heartland believes that the breach has been "contained," there s no telling exactly how many people have been affected.

Here are seven steps consumers can take to protect their identity:

Stay on Top of Your Credit Report

Just like semi-annual teeth cleanings, consumers should make a point to check their credit score on a regular basis -- ideally every three to four months, says Gail Cunningham, spokeswoman for the National Foundation for Credit Counseling.

You can get a free credit report every 12 months from each of the major credit bureaus, Equifax (EFX), Experian and TransUnion. To request a report, go to annualcreditreport.com. Look for any questionable accounts like a credit card or a car loan that you never signed up for and contact the credit bureaus immediately to report them.

Pay Attention to Credit-Card Statements

Consumers should be just as vigilant about combing through their monthly credit-card statements. Besides confirming that you weren't accidentally charged twice for a purchase, pay close attention to small credit-card charges. Identity thieves will often charge a very small amount, like $1, to verify that the credit card works, says Rusin.

Ask the credit cards' customer service department to set up an alert to notify you of suspicious charges in the future, says Kristin Loberg, author of "The Personal Security Handbook." These alerts are typically free. When an unusual amount -- be it in quantity of products or value -- is charged to your card over a short period of time, the credit card's fraud department will contact you.

Take Advantage of Card Protections

For online shoppers, some credit-card issuers offer single-use credit-card numbers that only work for one online transaction. "If someone was to steal it, they couldn't use it for anything else," says Rob Enderle, principal analyst at the San Jose, Calif.-based Enderle Group, a technology consulting firm.

MasterCard also offers SecureCode, which prompts credit-card holders to input a code -- just like a PIN -- that's only known by the user and the issuer to finalize a purchase at participating retailers.

Shop Secure Sites Only

Shopping online is fast and convenient -- but it's also a prime opportunity for identity thieves to hack into your personal information.

To protect against such nuisances, install the latest virus protection software. (Most new computers come with this software, but the programs often expire after a few years, says Rusin.) And put a firewall in place for computers with a high-speed Internet connection.

Another simple security measure: Before clicking the "Buy Now" button, make sure the URL of the web site you're shopping on begins with "https://" and there's a locked padlock on the page (typically on the lower left or upper right of the page). Those signs indicate that the site is encrypted and your personal information will securely get transmitted to the store, says Rusin.

Skip the Debit Card

A thief who steals a debit card can wipe out an entire bank account -- and the victim will have little to no way of retrieving that cash.

Credit cards, on the other hand, have certain consumer protections in place. Most credit-card issuers, for example, won't hold the consumer liable for charges made while the credit card was stolen, says Jay Foley, executive director of the Identity Theft Resource Center. (In some instances, consumers may be on the hook for $50, he says.)

For more, read our story on credit card protections

Don't Fall for Solicitations

Think twice before taking a phone call with someone claiming to be your lender or a possible employer. It could easily be an identity thief trying to gain access to your personal information. With unemployment at a 16-year high, fraudsters are combing through online resumes, contacting applicants with fake job offers and requesting their personal information, says Foley.

The only time a consumer should give any of their personal information is when they're contacting the lender, says Foley. Should you receive a call, ask the solicitor for his or her name, title, department and direct phone number. Then call the company's general phone number -- with credit cards, this would be the customer service number -- and ask if the person works there and if their statements about your account are valid.

Get a Shredder

While identity thieves may be more tech-savvy than they used to be, the old-fashioned method of sorting through a stranger's garbage hasn't entirely gone out of style.

To prevent your trash from divulging your identity, start shredding anything with your name, address, account number and birth date. That includes credit-card applications, blank checks, bills and any other documents with personal information.