Finding out your identity has been stolen can cause you some serious distress. Using this information, thieves can open bank accounts and credit cards and commit various types of crimes in your name. This is a major problem that can affect your life negatively and needs to be handled as fast as possible.
There are several types of identity fraud you can face. This post will discuss how to prevent the consequences of identity theft as well as any recovery steps you can take.
Being Careful Is Not Necessarily Enough
Being careful does help protect you from identity theft, but sometimes it is not enough.
Your Personal Identifiable Information (PII) is vulnerable in various ways, some of which are beyond your direct control. For example, even if you use only trusted local businesses, your data could be stolen by one of their employees.
Company Data Breaches
Major companies that store sensitive user data can be hacked, such as what happened to Equifax in September of 2017. This was a major data breach that led to significant problems for over 147 million of its users. During such an event, a thief could obtain several critical pieces of your PII, including your social security number or address.
If you discover you’ve become a victim of ID theft, you have specific rights under the Fair Credit Reporting Act (FCRA). For more information, read the summary of your rights here.
Many of these rights relate to dealing with the three major United States Credit Reporting Agencies (CRAs), also known as credit bureaus.
These agencies are:
Some of these rights include:
- Obtaining information from debt collection agencies.
- Blocking credit-damaging information to the credit reporting agencies (CRAs) so it stays off your credit reports.
- Preventing businesses from sending inaccurate information to the CRAs.
- The ability to see your files held by the CRAs.
Other steps you can take on your own to stop an ongoing identity theft include:
- Immediately place fraud alerts with the three CRAs.
- Setup a security freeze on your credit report(s).
- Get copies of your credit reports from the three CRAs.
- Secure any documents that might reveal fraudulent transactions or account openings using your personal information.
- Contact all businesses and banks where identity fraud may have occurred.
- Report the identity theft to the Federal Trade Commission (FTC).
- If tax-related identity theft occurred, contact the IRS to communicate with your health insurance provider(s).
(see these below in more detail)
What To Do If Your Identity Is Stolen
According to the Federal Trade Commission (FTC), you need to act immediately when you think your identity may have been stolen. Fortunately, there are some specific steps you can take to halt a thief from continuing to cause crime in your name.
Contact All Businesses And Banks Where The Identity Fraud May Have Occurred
Companies and financial institutions have fraud departments that can handle customer-related identity theft. Contact the businesses where any fraud may have occurred and have them freeze your accounts.
Immediately Place Fraud Alerts With The Three CRAs
The three major credit bureaus (Transunion, Equifax, Experian) are required to share information with each other. So, immediately contact one of them (although it is recommended to contact at least two) and make sure they set up a fraud alert signaling you have been a victim of identity theft.
The fraud alert will last one year and make it harder for a thief to continue to open any new accounts using your personal information. Fraud alerts force businesses to verify your ID before issuing credit to anyone who may use it. Extended fraud alerts are also available for up to seven years when requested.
Contact information to set up fraud alerts for the 3 credit bureaus (CRAs):
TransUnion Fraud Alert
TransUnion Fraud Victim
P.O. Box 2000
Chester, PA 19016
P.O. Box 105069
Atlanta, GA 30374
Experian Fraud Center
P.O. Box 9554
Allen, TX 75013
Get Copies Of Your Credit Reports From The Three CRAs
Free copies of your credit report are available from each credit reporting agency. Each separate credit report may have a different presentation or layout so make sure there are no important details missing from them. If you spot anything you don’t recognize, this could be a further sign your identity has been stolen. Make sure to follow all the following steps to fix this.
If you set up a fraud alert, you can get two free credit reports per credit bureau within 12 months of the alert.
Freeze Your Credit Report
If you suspect your identity has been compromised, you can place a freeze on your credit report. This will prevent any new creditors from accessing your credit file. This also stops a CRA from approving any new loans or credit without your authorization.
Get Copies of Records of Fraudulent Transactions
When talking to your creditors and other businesses make sure to get copies of applications and records related to fraudulent accounts or transactions. You have a legal right to do this. You should have proof of identity, an FTC Identity Theft Report, and a police report ready to go.
Get Information From Debt Collectors
Debt collectors will have crucial information about any debts that may have been incurred due to identity theft. You have the legal right to request this information.
Have The CRAs Stop Reporting Harmful Information
Your credit reports could reveal damaging information that occurred due to your identity having been stolen. You have the legal right to ask the CRAs to block the reporting of this information. If a thief purchases products using your credit and never pays for them, it could stay in your credit report.
Stop Businesses From Reporting Bad Information Due To The Identity Theft
Communicate with companies and businesses that may have transacted with the identity thief and insist they not report the inaccurate information to the credit bureaus. This will require specific details of what you do not want to be reported along with a copy of your FTC Identity Theft Report.
Report the Identity Theft to the Federal Trade Commission (FTC)
Report the identity theft to the FTC immediately upon discovering it. They will provide you a report which can be used to prove the ID theft to businesses and financial institutions. You can visit their website or call them at 877-438-4338 to do this.
Contact Local Law Enforcement
The FTC recommends victims contact their local police department and show them a copy of their FTC Identity Theft Report. Bring along your state-issued ID, proof of current address, and any theft collection alerts. Keep a copy of the police report for your records.
Contacting the FBI’s Internet Crime Complaint Center will also help you alert authorities in the area.
Contact The IRS
Contacting the IRS will help protect you from the tax-related implications of identity theft. A thief can get a fraudulent tax refund using your name, date of birth, and social security number. The IRS may send you alerts of fraudulent activity, which you should respond to immediately.
Contact Your Health Insurance And Medical Providers
Your medical care could be at risk if an identity thief uses your insurance to receive health care services. You could get unexpected medical costs due to prescriptions and surgeries done in your name.
Contact the DMV
A driver’s license or state ID are prime targets for an identity thief and can be used to impersonate the victim. These can both be used for making more fake ids, getting or using credit cards, or writing checks. If a criminal is stopped by police officers, they can use your driver’s license to trick their way out of being apprehended. Make sure to have your state’s DMV or licensing agency place a flag on your driver’s license number. This will also alert local law enforcement of the situation.
Review All Your Accounts
Review all of your accounts for any fraudulent activity. Reach out to your utility companies and cancel any new accounts taken out in your name that you do not recognize. If possible, create new accounts with strong passwords to replace the old ones.
Contact the Social Security Administration
Contacting the Social Security Administration may be necessary as your SSN can be used for many types of ID theft. If the ID theft goes on long enough, you may even end up having to clear yourself of criminal charges.
As mentioned previously, the FTC’s identity theft website will also be very helpful in assisting you with steps to recover from identity theft.
More Steps You Can Take
Moving on from the identity theft means taking additional steps besides the ones listed so far. This means being proactive to protect yourself from future identity theft.
Types of Identity Theft
Identity Theft Can Affect Wages and Taxes
The most common type of identity theft is connected with taxes and wages, adding up to 45 percent of all cases. An identity thief can file a fraudulent tax return in your name, or collect wages using your identity.
Financial Identity Theft
Financial identity theft occurs when a criminal uses your personal information for financial gain. These include credit card and bank fraud. With 16 and 6% respectively, these form smaller overall portions of identity fraud in the U.S. in comparison to wage and tax-related identity theft.
Medical identity theft
Your healthcare can be used by an identity thief for services that you will be charged for. Your medical file will also be altered which can impact future insurance coverage rates.
Identity Theft of Children
Children’s identities are prime targets for identity theft for one important reason: they have clean credit files. This allows an identity thief to get as much easy-to-qualify-for credit as possible. Some identity thieves even target their own family members, which may not find out about it until several years later.
Identity Theft Using Your Driver’s License
Cash and credit cards are not the only targets for identity thieves. Your driver’s license can allow them to use your identity to commit crimes and hide from authorities. A wrecked car, speeding tickets, and any purchases that require showing a driver’s license can cause a major financial and insurance problem for the ID theft victim.
More Serious Crimes
Identity theft can also contribute to more serious crimes, such as government espionage or terrorism.
Identity Theft Causes Huge Financial Losses
Identity theft can cause huge financial losses for victims. According to this study, identity thieves took over $35,000 per minute over the past 5+ years.
New account fraud is the highest growing type of identity theft. This accounts for 20% of all fraud losses, and businesses that do not migrate to new POS EMV chips systems are partially responsible.
No place Is Safe From Identity Theft
Regardless if you are on vacation, at work, or just shopping from home or online, identity theft can happen to anyone and anywhere. It can even occur if you live in a sparsely populated area. According to the FTC’s Consumer Sentinel Network Data Book, Missouri has the highest per capita rate of identity theft of all the U.S. states, even above states like Florida and New York.
Your Credit Report Can Be Damaged
Identity theft poses a huge threat to your credit score, which the lender uses to decide whether to grant you a credit card or loan. If it gets damaged, you may not be able to buy a new car, house, or things you need in an emergency.
How Credit Score Is Calculated
Determining credit score depends on a number of factors:
- Types of credit used.
- Age of the credit accounts.
- Payment history.
- How frequently you apply for new credit.
- How much credit you are using.
Your credit score can drop significantly if identity theft happens. There are several ways this occurs:
- Lowered credit file age with each new fraudulent account.
- The utilization ratio altered due to balance changes.
- Payment or lack of payment affecting your payment history.
- Additional credit inquiries will lower the score.
The longer identity theft goes on, the more it can damage your credit. When you catch it, you can take steps to repair your credit score fairly quickly.
Who Is Legally Liable For Fraudulent Charges?
When you find out that someone has racked up debt in your name, the first thing you may wonder is whether you’ll be on the hook to pay it back. When identity theft involves a debit or credit card, your losses are limited under the Fair Credit Billing Act and the Electronic Fund Transfer Act.
Your Liability is Capped for Credit Card Fraud
Your liability is limited to $50 for unauthorized credit card purchases under the Fair Credit Billing Act. Keep an eye out for lost credit cards and if you report a lost one soon enough, you will have no liability assigned to its fraudulent use. If the thief only steals your credit card number and does not use the actual card for any purchases, no liability will be assigned to you.
Report ATM And Debit Card Fraud Quickly
Reporting stolen debit and ATM cards fast will decrease the level of liability you hold.
Your Liability and The Timeframe of Fraud Reporting
If you report the identity theft-related fraud within two business days, your liability is only $50. If you report it immediately and no charges were committed, your liability will be zero. If you wait between 2 days and 60 days, your liability will be $500. If you wait longer than 60 days, there is no top line limit to your liability, so report it as soon as possible.
Credit Monitoring Services
You can sign up for an online credit monitoring service at any time. There are a few good ones online you can use that may help you repair your identity if it is ever compromised. Some even offer identity theft insurance.
Place A Fraud Alert On Your Existing Credit Reports
Placing a 90-day fraud alert with the three credit reporting agencies will put a red flag on your credit report. Each CRA will notify the others, so you can get away with only contacting just one of them (although it is recommended to contact them all.) As mentioned earlier, the three CRAs are Equifax, TransUnion, and Experian.
A fraud alert will grant you the right to a free copy of your credit report from each CRA. You can view your credit report online and this will allow you to check any items that might be fraudulent. You can dispute any item online by clicking the dispute button, or in writing along with any supporting documents. Some inquiries cannot be disputed but their listing will give you an idea as to where and when the fraud happened.
Setting up a fraud alert is free and can be renewed each year.
When Can Identity Theft Happen?
Here are some ways identity theft can happen:
- Data Breaches
- A stolen or lost wallet
- Stolen or lost smartphone or tablet
- Car or Home Burglary
- Acquaintance or family theft
Setting Up Fraud Alerts
The initial fraud alert you set up will be free and stay in place for 90 days. Additional fraud alerts or extensions may include a small fee, depending on the agency.
An extended fraud alert can last up to seven years. For this, you need to file a report with the Federal Trade Commission (FTC). Once this is done, you can get two free credit reports from each CRA each year.
Fraud alerts will require an extra security check if another person tries to use your information to apply for a new credit card or loan.
Freeze Your Credit
Enacting a security freeze is another option that is recommended. It will prevent any additional identity theft from occurring and stop creditors from accessing your report(s).
A freeze on your credit report will stop anyone from getting access to it without your authorization. This service is free and you must contact each CRA separately to have them put it in place.
After a security freeze is set up, you will need to take additional steps to apply for new credit. CRAs can temporarily “thaw” your credit file to allow for new legitimate applications. Freezing your credit files requires contacting each CRA separately, as opposed to setting up a fraud alert which only requires contacting one of them.
You must contact them via phone, online, or in writing to lift the credit freeze. You may want to do so when you move to a new home or apply for a job which means your credit will need to be checked.
Credit freezes are great preventive steps you can take because it does not require being a victim of identity theft.
Freezing and unfreezing a credit file may require a fee depending on the state you are in. Also depending on the state, a person who has not had their identity stolen yet may not be able to get a credit freeze.
Contact Specific Financial Institutions
If you know which bank or credit institution issued you the card that might have been used for fraud, contact them directly.
Make sure to have a list of financial institutions made and set aside in the event of identity theft. Keep all your account numbers, passwords, and pins in a secure location. You can store these in an encrypted online file storage website, or a locked file cabinet on a paper document. It is not recommended to store this information on your PC, tablet, or mobile phone as these can be lost, stolen, or hacked.
Get A Free Credit Report
Each of the 3 credit reporting agencies can provide you with a free credit report upon request up to once per year. You can even request them 3 times a year if done one at a time at certain intervals. This will give you semi-regular reviews of your credit activity to spot any items that are suspicious. If any are found, you can dispute any fraudulent activities that are a result of identity theft.
Contact the Federal Trade Commission (FTC)
Reach out to the Federal Trade Commission (FTC) and file an Identity Theft Affidavit, police report, and create an Identity Theft Report.
FTC contact information:Call 1-877-ID THEFT (877-438-4338), toll-free at 1-866-653-4261. Mail a request to 600 Pennsylvania Ave., Washington DC 20580.
The FTC will give instructions as to what you can do to get the fraud resolved depending on which type it is.
Reporting to the FTC quickly is key to this. Doing this in two days or less means only having to pay $50 for any bank, credit card fees, and costs associated with identity theft. Waiting longer than 2 days will increase the financial liability you face.
The FTC website will offer a recovery plan of your personal information which you can track online. There are preformatted sample letters you can use when writing to local businesses, banks, and credit bureaus.
You should do this before you contact the police department.
File a Police Report
It is required to have a police report filed to complete the Identity Theft Report. Make sure to keep a copy of the report or report number for your records. Two pieces of information, the FTC Identity Theft Affidavit, and the police report will form your Identity Theft Report. Credit reporting agencies (CRAs) and businesses will use your Identity Theft Report to help manage and resolve any fraudulent accounts that were set up by the thief.
You should file a report with your local police department even if the thief is doing criminal activity online or in another country.
This will help you handle identity theft in two ways:
- You are helping the police catch the identity thief and protect more innocent people.
- It will help you with collection notices for accounts you did not set up.
Keep Your Social Security Number Safe
The identity thief may have compromised your social security number.
You may not know if your social security number has been taken until the thief steals your tax refund or receives health care or employment using your identity. So, make sure to contact the SSA and IRS immediately upon discovering the potential identity theft.
Do Not Carry Your Social Security Number In Your Wallet
Do not carry your social security card in your wallet or a copy of it. Keep your original SS card in a locked safe, file cabinet, or safe deposit box if possible. Never leave it around where a person can find it or run across it. If your home is ever robbed, the thieves will take your SS card along with your jewelry, flash drives, and wallet. Also, do not ever give it to a business or medical professional, even if they ask for it. Give them your state identification or driver’s license number instead. Never give out your SS number over the phone because the conversation could be recorded.
Contact the Social Security Administration
If you find your identity may be stolen, you can contact the Social Security Administration (SSA) at 800-269-0271 and the Internal Revenue Service at 800-829-0433. You can even get a replacement social security card online.
Also contact the Office of the Inspector General and report the fraudulent activity if it has already occurred.
Lost or Stolen Passport
If your passport was lost or stolen, contact the U.S. Department of State and report it or get a replacement.
Replacement Drivers License
Get a replacement Driver’s License by contacting the local Department of Motor Vehicles (DMV).
Get In Touch With the Post Office
The post office has a law enforcement and security arm called the Postal Inspection Service. If you suspect the identity thief used U.S. mail to commit a crime in your name or made a fraudulent change-of-address to the post office, then contact the post office immediately and fill out the online form.
Identity Theft Can Cause You A Real (And Long Lasting) Headache
If your identity is stolen, resolving it will not happen quickly. You have to take all the mentioned steps (and maybe a few more) to have your identity cleared. If you are still looking for more information, visit the U.S. Department of Justice and Federal Trade Commission websites where they offer a large amount of information you can use to move forwards.
Phishing Can Risk Your Identity
Phishing emails are ways hackers and identity thieves can get useful personal information from computer users. Make sure to never open emails that you suspect may be phishing attempts. Many of these emails may seem like they are from a legitimate company or bank. Also, avoid downloading any attachments or files unless you know exactly who the sender is.
Be Wary About Mobile Banking and Online Shopping
Be wary of using mobile banking or online shopping when using a smart device or phone. A thief may be able to capture your personal information through public wifi, voice recordings, photographs of login information or even your biometric markers. Always make sure to be in a place where no one can view your screen when you perform online login attempts.
For information on biometrics, read our post What is Biometric Security here.
Change Your Passwords Regularly
Make sure to change your passwords regularly and make them as complex and unique as possible. Also, do not use the same ID or passwords across your accounts. Your passwords should include numbers, letters, and symbols and be stored in a safe place (not on your hard drive). You can use online password storage or keep them in a hard document so it is ok to forget them.
Use A Credit Monitoring Service
There are free credit monitoring services available online you can use to keep a check on your credit. You may also be able to get free or low-cost identity theft insurance and regular online notifications of any credit file changes. These services may also include support for getting your identity and credit back on track after identity theft.
Get Ahead of Debt Collectors
Don’t wait for debt collection notices to show up requesting payment for charges you did not make to contact debt collectors. Contact them immediately upon discovering the identity theft.
There are pre-formatted hard documents on the FTC website you can use to contact debt collectors. You must use put any requests you have into a physical letter to debt collectors. This can help prevent them from contacting the credit bureaus about your account activity.
Contact The Fraud Department of Your Bank(s)
Believe it or not, financial fraud is not a new concept, and banks are well aware of its existence. Each bank should have a fraud department available to assist you in the event of identity theft. They will provide steps that you can use to limit the harm caused by a fraudster.
You should be proactive and contact all credit card companies, banks, and businesses right after you suspect your identity was stolen. Do not wait for bills to show up with a list of fraudulent charges that you have to pay for.
Close False Accounts Opened In Your Name
Close any accounts opened in your name after you have contacted the FTC and the three credit bureaus. This will require contacting company fraud departments and using police report and FTC reference numbers to assist you.
Change Your Usernames And Passwords
All accounts that may be affected by identity theft need new passwords and usernames. Make sure to not use your date of birth, or easy to guess word strings such as “01234abcd” or “mypassword.” Also, do not use the same passwords and usernames for multiple accounts.
Dealing with identity theft is not fun for anyone, but can be made easier by being proactive and taking the right steps to resolve it. If possible, take preventive measures to protect your identity before a thief has a chance to steal it. If you do so, you can protect yourself and from the potential risk of a ruined credit score, significant financial costs, and lost time.
One way to protect your identity is to use antivirus software, which you can learn about in our Mega Antivirus Software Review here.