Identity theft is serious business.
The notorious 2017 Equifax data breach last year left 145+ million exposed and vulnerable to fraud – nearly half of the U.S. population. And according to Javelin Strategy & Research, the number of identity theft victims in 2016 was 15.4 million. That’s a 50% increase over ten years.
Still, knowing that you’re not the only one facing such a horrendous violation doesn’t make it any easier. It’s overwhelming to even know where to begin once you realize your loss is being used for someone else’s gain.
With so much confusing information out there, it may also seem as if you’re on your own to fix things and restore your good credit. The good news is, there are many resources out there to help you through this difficult time.
Here are the crucial first steps to take to when you’ve been the victim of identity theft or fraud:
Report the fraudulent activity ASAP.
As soon as you realize you’ve been the victim of identity theft, you need to move quickly to notify any business where your information might be used fraudulently. If someone has your personal or financial information, they can apply for a loan or take out a credit card in your name, with no intention of paying it back. This can leave you not just responsible for the money spent, but also can end up negatively impacting your credit score for delinquent accounts and missed payments… on things you didn’t buy or loans you didn’t take out in the first place. Contact the fraud departments of your credit card companies and banks, close or freeze any accounts that have been affected, and update your login information (i.e. passwords, PIN numbers, etc.).
It may give you peace of mind that the Electronic Fund Transfer Act (EFTA) limits your liability to as low as $50 if you report unauthorized transactions within 60 days to financial institutions, beginning on the date of the first statements that contain the transactions. The clock is ticking though; your $50 liability lasts for only two days and goes up to as much as $500 within that 60-day period. After that, institutions have no obligation to conduct an investigation, and “you risk unlimited loss.”
Loop in the credit bureaus.
Place a free fraud alert on your account with one credit bureau; that organization is then mandated to inform the other two. A fraud alert tells any new creditors or lenders that you’ve been the victim of identity theft and will alert them that any future credit applications should be reviewed extra carefully.
For your easy reference, here are the direct lines to each bureau’s fraud alert division:
Experian Fraud Alert:
- Experian.com/fraudalert: 1-888-397-3742
Transunion Fraud Alert:
- TransUnion.com/fraud: 1-800-680-7289
Equifax Fraud Alert:
- Equifax.com/CreditReportAssistance: 1-888-766-0008
If you don’t already routinely monitor your credit, you should also request your free annual report from the three credit bureaus.
Review your credit reports for any fraudulent activity
Once you have your credit reports, take a careful look for anything that doesn’t look right: accounts you never opened, unauthorized inquiries, address changes to somewhere you don’t live, debt that isn’t yours, etc. Don’t just skim over the most recent information, either; go back in time and review your statements. If you find inaccuracies, be sure to dispute the charges immediately with both the credit bureau and also the company from which the charges originated. You can do this by sending a letters that state why the charges are fraudulent, with backup information to prove it. (Check out the FTC’s recommendations on how to properly dispute charges on your credit report.) Also, to help track down the thief, you should request copies of any documentation that was used to open accounts in your name.
Report the theft to the Federal Trade Commission (FTC)
An Identity Theft Report will help make it easier for you to prove that your identity has been stolen throughout your journey of undoing the damage done. For example, you’ll need the Identity Theft Report to put a freeze on your credit with the top three bureaus for free, when you need to dispute charges or accounts, and to clear your name of certain types of fraudulent activity (i.e. with the Social Security Administration or Internal Revenue Service if your Social Security number has been compromised).
Freeze your credit
In order to keep unwanted new accounts from being opened in your name without your consent, you should consider freezing your credit report. (This is different from a fraud alert. Here’s more info on how they compare.) Not sure how to freeze your credit? Each of the top three credit bureaus makes it simple for you to initiate a freeze.
Of course, once you freeze your credit, it also goes for new accounts that you legitimately want to open too. Some lenders won’t necessarily be able to tell whether a fraudster is trying to open an account in your name, or if it was really you. Because of this, you’ll have to temporarily lift the security freeze when you’re legitimately applying for a new loan, credit card, or other new account, which can take up to 48 hours. There may be fees associated with this as well. If you are someone who frequently opens new accounts or takes loans, a credit lock is another option for you. It will allow you to easily unlock your credit immediately. Still, experts agree a credit freeze is a better option to fight identity theft.
Let appropriate agencies know that your identity has been stolen
From the Social Security office to the DMV, you’ll have to go through official channels to let them know that your private information has been compromised. And if, for example, the thief has used your Social Security number to procure a job or tax refund, you’ll have to file an Identity Theft Affidavit form with the Internal Revenue Service as well.
Report the identity theft to your local police
While filing the Identity Theft Report with the FTC is often enough, it’s may also be a good idea to file a report with your local police, especially if you know who stole your identity or have any strong evidence that may lead to an arrest. You may also benefit from reporting the crime to the police if the person who committed the fraud used your identity in a police-related matter (i.e. a traffic stop) or if creditors, debt collectors or others insist on your providing a police report to prove your innocence.
As you take strong and decisive action to reclaim your identity, make sure you document everything in writing and record details such who you spoke to, the date and time, and what the outcome was.
Identity theft is serious business – and thieves are counting on consumers to remain in the dark for as long as possible. And of course, remember that the best defense is a strong offense, so take steps to keep your personal information private before anything happens.
Recommended resources:
FTC: “Identity Theft: A Recovery Plan”
FTC: Disputing Errors on Credit Reports
IRS: Taxpayer Guide to Identity Theft
Identity Theft: Governmental Overview
