10 Steps to Take When You Are the Victim of Identify Theft

credit report fraud identity theft

Unfortunately, identity theft continues to grow. Various reports reveal that tens of millions of Americans fall victim to identity theft every year, and tens of billions of dollars are stolen from Americans every year because of identity theft.

During these moments, you likely feel stressed and scared. To provide some clarity and calm during these unfortunate times, here are some steps to consider taking. 

Steps Toward Remedying Identity Theft

Step 1: If you have identity theft insurance, make sure the insurance company is aware of the situation, and file a claim. Often, these types of insurance plans can help cover the costs associated with remedying the situation. This can include coverage for legal and credit monitoring services.

Step 2: Communicate with any companies that may be impacted by the identity theft. These companies may include banks or other financial institutions. Notifying the companies will allow them to start taking the necessary steps on their end to remedy the situation and protect against future theft. If your credit card was used in the theft, the financial institution will likely issue a new card with a new number.

Step 3: Change passwords and PINs (Personal Identification Number). You may not be sure how the thief accessed your information or how many accounts they were able to access. To protect against future theft, it is wise to change all passwords and PINs, especially if different accounts have similar passwords and PINs.

Step 4: Place a fraud alert on the credit reports. There are three main credit bureaus—Experian, Equifax, and TransUnion. Place a fraud alert on each of these bureaus’ credit report. The fraud alert requires a business to verify a person’s identity before issuing any new credit. A fraud alert will remain active for one year. After the year, you can renew the alert for seven years.

Step 5: Freeze credit. A credit freeze prohibits businesses from extending credit. It may be wise to do this as an added layer of protection for a time. Fortunately, freezing and unfreezing one’s credit is an easy and quick process. You simply need to contact the three bureaus and request a credit freeze. Once you are ready to remove the freeze, you just need to notify the bureaus.

Step 6: Contact the local police department to get a report on file. Get a report on file with the police and Federal Trade Commission. Both reports will help you clear up any credit issues when working with the different businesses.

Step 7: Report the identify theft to the Federal Trade Commission (FTC). In addition to the police report, get a Identify Theft Report from the FTC. As mentioned in the prior step, these reports will help you work with the business as the try to clear up the credit issues.

Step 8: Monitor credit reports. Regularly check their credit report over the next six months. This will help ensure there are no new accounts opened under their name. Of course, the fraud alert and credit freeze should prevent such accounts, but this step provides another layer of protection.

Step 9: Monitor credit cards. As mentioned in a prior step, if your credit card was used in the theft, the financial institution will likely issue a new card with a new number. Hopefully, this will guard against future theft. But even if a new card has been issued, it is still wise to regularly monitor all credit cards for any unauthorized purchases because the thief may have access to more than just one card or account. 

Step 10: Consider a credit monitoring service. If you have identity theft insurance, the costs for credit monitoring services may be covered. A person would consider credit monitoring services if they feel they cannot monitor the accounts on their own. It should be noted that fees are usually associated with these services.

Limiting Identity Theft Risk

To reduce your risk for future identity theft, take these proactive measures.

Avoid sharing personal information with unknown parties. Unsolicited phone calls, emails, and social media direct messages are common ways thieves acquire personal information. When an unknown party contacts you, encourage them not to share any personal information, even their name. If a legitimate party contacts you, they will not for personal information to verify the client’s identity.

Use direct deposit. Limiting the number of physical items that contain personal information can limit identify theft risk.Uuse direct deposit and conduct their financial transactions digitally when possible. Physical items, like checks, can be stolen, especially when placed in the mail.

Shred personal information. It can be wise to have a paper shredder in the home. Shred any documents than contain personal information, including any credit card are loan offer.

Avoid sharing information on unprotected websites. Before making any purchase or financial transaction on a website, ensure the website is protected and that the company has a protection policy. A secure website always starts with HTTPS, not HTTP. Before making an purchase, verify the authenticity of the website.

The key is to be proactive. The burden of guarding oneself against identity theft is significant less than the burden of remedying identify theft.