I'm the victim of identity theft. What should I do?

Q:

I'm the victim of identity theft. What should I do?

A:

Identity theft is the fraudulent misuse or theft of someone else’s personal information or documents, generally for financial gain. Identity theft is one of the fastest-growing crimes and can include bank fraud, employment fraud, loan fraud, phone or utilities fraud, government benefits fraud and credit card fraud.

Unfortunately, unlike many other types of crimes, you may be the victim of identity theft and not realize it until it’s too late. Additionally, you may be the victim of identity theft through no fault of your own. In fact, one of the leading causes of identity theft happens to be breaches at companies or banks in which you transact business, which means that you could be a victim even if you have personally take all the necessary precautions.

How significant is the problem of identity theft? According to a recent 2017 Identity Fraud Study released by Javelin Strategy & Research, it’s estimated that over the past six years, identity thieves have stolen over $107 billion.

With the growing problem of identity theft and the increasing chance that you will one day be a victim, it’s important to understand what to do if you are the victim of identity theft. Let’s take a look at the steps you need to take immediately.

1. Identify the scope of the problem.

If you believe that you might be the victim of identity theft, the first step is to identify the scope of the problem. If only one account is compromised, this may not be identity theft; it might simply be a case of credit card fraud. Although this can be frustrating, solving the issue of credit card fraud may be as simple as contacting the financial institution responsible for the account, reviewing previous charges, disputing fraudulent charges, and making sure that the account is closed.

2. Contact the credit bureaus and sign up for a credit monitoring service.

If, however, the breach is more significant, you will need to take additional steps. For example, if a business notifies you that all of your personal information has been stolen, you will need to contact one of the three credit bureaus (Experian, Equifax or TransUnion) and ask them to put a fraud alert on your account.

An initial fraud alert will require creditors, who check your credit report, to verify your personal identity before issuing new credit cards, increasing your credit limit, or allowing someone to open a new credit account. Additional security measures are also available, including an extended fraud alert and a security freeze.

Contacting a credit bureau is an important step even if you are not 100% sure that your personal information will be used. The good news is that you will only have to contact one agency, and they will be responsible for contacting the other two.

Another step after an identity theft is to consider hiring a credit monitoring service. In some cases, if the identity theft was due to a breach of a company’s computer system, the company may offer the credit monitoring service for free. Experts vacillate on the benefit of credit monitoring, with some arguing that the services generally don’t alert victims to unusual activity on their credit cards. Monitoring services can, however, alert victims to new credit accounts opened in their name without their knowledge. So if the service is offered for free following a breach, why not take advantage of the protection?

3. Determine whether you need to file a police report.

The Federal Trade Commission has simplified the process for reporting identity theft. In fact, the FTC reports that most victims will not need to file a police report (exceptions exist if you have information that could help with a police investigation, the perpetrator used your name in a police encounter, or you are required to provide a police report to the creditor).

However, even if you decide not to file a police report, you should go to IdentityTheft.gov. This website provides a recovery plan and a template for letters to send to businesses and banks, and allows you to complete an Identity Theft Report.

4. Review your credit report.

Everyone should be reviewing their credit report from all three credit agencies each year. If you are the victim of identity theft, however, you are entitled to a separate free report. Experts suggest that you should wait several weeks before requesting the report to ensure that all of the fraudulent activity has been placed on your report.

After you receive the report, make sure that the accounts are valid, that you do not have any fraudulent debt on your account, and that your personal information is accurate. If you find incorrect information, you will need to work with the credit bureaus to ensure that the information is deleted from your report. It’s also important to follow up every year to ensure that your report remains accurate. The official site to request your free credit reports each year is AnnualCreditReport.com.

5. Protect yourself from future identity theft.

As mentioned above, identity theft may be due to your lax attitude toward security. It also could be through no fault of your own. Regardless of the reason, however, it is important to take preventive steps to ensure that it does not happen again. Such steps include creating strong passwords and regularly updating them, protecting personal information, not carrying your Social Security card, and shredding all personal documents prior to disposal.

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Whether you're facing a legal issue or just seeking information, Justipedia aims to be your most trusted resource for legal information on the Web. With the help of legal professionals across the country, we put the law in plain language to help answer your top legal questions.

Justipedia was founded by Internet veterans Cory Janssen and Mitchell Allen. Janssen founded Investopedia.com and grew it one of the largest investing sites on the Web. Allen is an author, speaker and the founder of LeadRival, the leading provider of pay-per-action advertising in consumer legal services.

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