The worst thing that could happen is to receive a call from a collections agency demanding payment on an unknown debt, or to discover hundreds of dollars in unauthorized transactions on a bank or credit card account.
Identity theft, in which a hacker acquires and uses a person’s personal data to commit financial crimes like creating a credit card in the victim’s name or making fraudulent transactions, is on the rise.
The FTC reports that impostor scams resulted in financial losses for 1 in 5 people in 2021, with the number of fraud, identity theft, and other complaint instances increasing by more than 60% between 2019 and 2020. More and more people are in need of learning the steps to take if their identity is stolen.
Identity theft can be avoided if precautions are taken in advance. However, we can assist you because not everyone has the luxury of anticipating their needs. Our recommendations for dealing with identity theft are noted below. You’ll find 11 things you can do immediately to fix your financial situation, as well as some advice for safeguarding your money in the long run.
1. Contact your Identity Theft Insurance
When faced with unexpected fraud, the first number you should call is the one associated with your identity theft insurance policy.
Large insurance companies like State Farm and Liberty Mutual offer identity theft insurance as an optional rider for homeowners’ contracts. Identity theft insurance may also be included in your employee benefits package; if you believe this to be the case but are unsure, you should investigate further.
There are a variety of unexpected advantages to having identity theft insurance, such as:
- Wage loss protection
- Costs of shipping and notarization are covered.
- Claims Costs
- Security of Credit
- Financial support for childcare
With the help of identity theft insurance, you can get your life back to normal and stop worrying about “why was my identity stolen?” and start looking forward to your financial future again.
2. Notify your Bank and Credit card Companies
Next, contact your financial institutions and credit card providers, whether or not you have identity theft insurance.
Do this for all of your accounts, because just because a particular card hasn’t been used fraudulently doesn’t indicate that your personal data hasn’t been compromised.
Both canceling the card and contacting the respective companies’ fraud departments are viable options in this situation. Help with protecting assets, opening new accounts, and issuing new cards is provided.
The following is a list of the major financial institutions’ customer service phone numbers:
- American Express: 1-800-528-4800
- Bank of America: 1-800-432-1000
- Capital One: 1-877-383-4802
- Chase: 1-800-935-9935
- Citibank: 1-888-248-4226
- Discover: 1-800-347-2683
- Mastercard: 1-800-307-7309
- U.S. Bank: 1-800-872-2657
- Visa: 1-800-847-2911
- Wells Fargo: 1-800-869-3557
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Learn What You Are Liable for if Your Identity is Stolen
You may be asking who is responsible for any purchases made with your stolen credit card. The Federal Trade Commission states that you may be held responsible for expenses incurred as a result of identity theft. Important details include:
- Accounts or debts opened in your name without your knowledge or consent are generally not your responsibility under most state laws.
- If you report credit card fraud to your bank within 60 days of getting a statement that includes unauthorized charges, you will only be responsible for up to $50 of those charges.
- If you report a loss or theft of your debit card within two business days of finding the loss or theft, your responsibility is limited to $50.
The good news is that if you notify the banks immediately after becoming suspicious of fraud, you will likely incur minimal responsibility. You should verify this information with your bank and local authorities.
3. Reach Out to Any Institution Where Your Identity Was Used
The next step is to contact any organization that may have had information stolen from them. This might be financial institutions from which loans were obtained, or retail establishments from which unauthorized purchases were made.
These organizations may want more information, such as a police or theft report number, to properly approve and process adequate returns, so it’s ideal to start the conversation as soon as possible. As you work to restore your credit, any documentation of the incident and the institution’s acceptance that fraud did place will be invaluable.
4. Place a Fraud Alert or Freeze Your Credit
Equifax®, Experian®, and TransUnion® are the three main credit reporting companies. You can call any one of these three organizations to issue a fraud notice, and they will notify the others on your behalf.
Putting a fraud alert on your credit report for a year is a good way to protect yourself from identity theft. When a fraud alert is in effect, financial institutions have an obligation to demand proof of identity before extending credit. The risk of someone using your personal information to commit identity theft is greatly reduced.
In contrast, a credit freeze is a far stricter measure than a fraud warning. A credit freeze is a security measure that prevents anyone from accessing your credit record or credit score. In order to place a freeze on your credit, you must contact each credit reporting agency individually.
The following is a list of the major credit bureaus’ contact details:
- Equifax: 1-888-378-4329 or visit their website
- Experian: 1-888-397-3742 or visit their website
- TransUnion: 1-800-680-7289 or visit their website
Even though a credit freeze adds an extra layer of security, it must be released before you can apply for a loan or a job that requires a background check. Unfreezing your credit is as easy as contacting each credit union individually.
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5. Check your credit report thoroughly for any additional signs of fraud
You may now rest assured that no more fraudulent activity will be able to occur on your accounts. Now is the moment to thoroughly examine your credit record for any more signs of fraudulent activity.
A free credit report can be requested from the credit reporting organization you contacted after establishing a fraud alert or credit freeze. Check your credit report thoroughly for any red flags, such as recently opened accounts that don’t belong to you, unfamiliar accounts that have gone into collections, and even seemingly insignificant items like unasked-for credit queries.
6. File an identity theft report with the Federal Trade Commission
After you have finished reporting identity theft to the credit reporting agencies, you should make a formal report with the FTC.
If you’ve been the victim of identity theft, filing a report with the FTC will create an official record that can be used to dispute charges and negative marks on your credit report. Visit their website IdentityTheft.gov or give them a call at 1-877-438-4338 to get started. When you have all the facts, they will explain you how to file a report of identity theft and help you through the steps.
The FTC will help with you to create a recovery plan, walk you through retrieving your data, and pre-populate critical forms and letters you’ll need to dispute fraudulent transactions as part of the filing process.
7. Call your local law enforcement
The Federal Trade Commission will advise you to report identity theft to the police after you file a complaint with them. It is necessary to file a police complaint in addition to the FTC identity theft report when challenging charges at a financial institution.
Call the police department’s non-emergency number or go to the station in person to file a report. You’ll need to bring your FTC report, along with your ID, proof of residency, and any other evidence that you have of identity theft. As a final step, you should request a copy of the police report to file away safely.
8. Dispute fraudulent credit hits and transactions
Credit hits and charges should be formally disputed once you have gathered all the necessary facts, including a police record and FTC identity theft report.
In Step 3, we showed you how to contact any business that may have been affected by identity theft. Accounts and transactions were probably frozen, but there are a few things they could require to complete the closing and possibly reimbursement procedure. Now that you have access to your official fraud reports, you can take the next step toward resolution by filing a formal dispute of these transactions.
9. Check your devices for viruses
After taking precautions to prevent further identity theft and challenging any unauthorized charges, the next step is to investigate how the theft occurred. If you learn the details of your identity theft, you can take steps to prevent it from happening again.
Malware, or harmful software, is frequently used by cybercriminals to steal personal information by tricking users into installing it on their computers or mobile devices. Passwords, account numbers, and other sensitive data are all fair game for hackers once this program is installed on a computer.
As a result, it is crucial to ensure that your personal information cannot be stolen again by running antivirus scans on all of your devices and inspecting the security of your home Wi-Fi network.
10. Change your passwords
After making sure your devices are virus-free and safe, it’s a good idea to reset the passwords for your most important accounts.
There are several guidelines you may follow to make sure your new passwords are secure from intruders:
Password strength is directly proportional to the length, therefore use as many characters as possible.
Never use your name or date of birth as a password, or any other piece of easily recognizable personal information.
Make use of both uppercase and lowercase letters, as well as digits and symbols.
Use a different password for each account you have.
Password management software can help you remember complex passwords that you might have trouble remembering on your own. The greatest passwords are made up of a random string of letters, numbers, and special characters.
11. Repair your credit
Now that you’ve filed reports, informed the appropriate institutions, and secured your accounts, you may turn your attention to restoring your credit.
How long it takes to get your credit score back up after identity theft depends on a variety of things, including how high it was to begin with and how badly it was damaged. However, once you have the required paperwork in order, it won’t be long before you’re back on solid financial ground.
You can also use a credit service, such as the one we provide here at CreditRepair.com, to review your credit report, challenge any errors you find, and keep a constant eye out for any new problems.
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