Take for example your Facebook profile. If a hacker were to steal your password to your profile, they could find out your birth date, email. phone number, friends, hometown, family member names, and more. The information gathered on your profile could then be used to reset your password on a banking site if they are able to successfully guess your set of secret questions. I have some tips for preventing social engineering types of attacks.
2) Change your passwords frequently and use different ones for each site. Pay special attention to social networking sites for any unusual activity on your profile.
3) Use extremely difficult and custom security questions that only you can answer. Avoid using default questions such as mothers maiden name, your birthday, hometown or your favorite singer. This information could be found on your social networking profile.
4) Never write your passwords on a notepad that can be easily found or one that travels with you.
By following these tips you'll save yourself from having to deal with identity theft which is extremely time consuming to correct.