Receiving a collection agency call for an unknown debt or discovering hundreds of dollars in unauthorised charges on your bank or credit card account is everyone's worst nightmare.
Identity theft occurs when a cybercriminal exploits someone's personal information unlawfully for financial benefits, such as creating a Credit Card or making fraudulent purchases—and it's a rising problem.
According to the Federal Trade Commission, the amount of fraud, identity theft, and other complaint instances increased by more than 60% between 2019 and 2020, and 1 in 5 persons reported losing money in imposter scams in 2021. Regrettably, determining what to do if your identity is stolen is a process that an increasing number of individuals must learn.
The easiest way to deal with identity theft is to prevent it from happening in the first place. Unfortunately, not everyone has the luxury of preparing ahead, which is where we can assist. We've highlighted our tips for what to do if your identity is stolen below. You will find 11 measures to right your financial ship in the short term, as well as some extra advice.
1. Contact your identity theft insurance
Fraud is unpleasant. If you're wondering who to contact regarding identity theft, your first call should be to your identity theft insurance provider.
Identity theft insurance is often available as an add-on to property insurance plans from major insurers such as State Farm or Liberty Mutual. Also, identity theft insurance may be provided via your workplace benefits, so if you are unclear, it is advisable to conduct your research to check.
Identity theft insurance may help you go back to normalcy, moving you from "why was my identity stolen?" to a secure financial future.
2. Notify your bank and credit card companies
The next step, whether you have identity theft insurance or not, is to contact your bank and credit card providers.
It's critical to do this for every account you own since even if the card in issue hasn't been used in a fraudulent transaction, it doesn't imply your information is safe or secure.
You have the choice of cancelling the card or contacting the fraud department of each account. They will help you secure your valuables, open new accounts, and issue new cards.
Learn what you are liable for if your identity is stolen
If your credit card is used without your consent, you may question if you are responsible for the costs. According to the Federal Trade Commission, your obligation for debts incurred when your identity is stolen is determined by the circumstances. A few significant points are:
• Most state laws hold you harmless for any accounts or debts opened in your name without your approval.
• In the case of credit card fraud, you are only responsible for up to $50 if you notify the financial institution within 60 days of getting a statement containing fraudulent transactions.
• Your responsibility for debit card fraud is limited to $50 if you notify the banking institution within two business days of discovering the fraud or losing the card. The good news is that your responsibility is limited as long as you notify financial institutions as soon as you detect fraud. Nonetheless, it is best to contact your financial institution and local legislation.
3. Reach out to any institution where your identity was used
The next step is to contact any institution where your identity was exploited. These might include banks or lending offices where loans were obtained or retailers where fraudulent purchases were made.
Some institutions may require more information, such as a police or theft report number, in order to completely authorise and execute appropriate reimbursements, and it is essential to begin the dialogue as soon as feasible. Also, anything you can obtain in writing, such as the institution's acknowledgement that fraud occurred, is useful for your records as you rehabilitate your credit.
4. Place a fraud alert or freeze your credit
Equifax®, Experian®, and TransUnion® are the three major credit reporting companies. You must call one of these three organisations to issue a fraud notice, which will then contact the other two on your behalf.
Fraud alerts are valid for a year and give an extra layer of protection to your credit. While a fraud warning is in effect, a bank or credit card business must check identity before making a loan or opening a new line of credit. This makes opening bogus accounts in your name exceedingly difficult.
A credit freeze, on the other hand, is more severe than a fraud warning. Credit freezes effectively protect your credit history and prevent any third party from seeing your credit report. To place a freeze, you must call each of the three credit bureaus separately.
Credit freezes are quite safe, but they must be removed if you want to apply for a loan or are doing a job search that may need a background check. If you're wondering how to unfreeze credit, simply contact each credit union individually to have the freeze removed.
5. Look through your credit report for any other fraudulent activity
You have now safeguarded your accounts and prevented any further unwanted access or spending. It is now time to go through your credit report to ensure that there is no further fraudulent activity that you may have missed.
Following the placement of a fraud alert or credit freeze, you will be able to receive a free credit report from the reporting agency with which you were in touch. Examine your accounts carefully for any unusual activity, such as any fake accounts or loans you may have overlooked, unfamiliar accounts in collections, and even seemingly minor items like unrequested credit inquiries.
6. File an identity theft report with the Federal Trade Commission
While you have previously reported identity theft to credit bureaus, you must now submit a formal identity theft report with the Federal Trade Commission (FTC).
7. Call your local law enforcement
After submitting a claim with the FTC, they will also advise you to seek charges for identity theft by contacting your local police authorities. Institutions may request a police record in addition to the FTC identity theft complaint when challenging charges, therefore it is critical to complete this step.
Call the non-emergency number or visit the station to register a police report with your local department. You must bring your identification, proof of address, any evidence of identity theft, and your FTC report. Next, ensure that you obtain a copy of the police report for your records.
8. Dispute fraudulent credit hits and transactions
After you have your FTC identity theft complaint, police record, and any other pertinent information, it's time to legally contest the credit hits and charges that have been made against your name.
In Step 3, we discussed how to contact any institution where your identity was fraudulently exploited. Accounts and transactions may have been suspended, but they may require a few specific items before proceeding with the closure and possibly refund procedure. With copies of your official fraud reports in hand, legally challenging these transactions will move the case along.
9. Check your devices for viruses
When you've protected your accounts and are contesting any transactions, it's time to discover out how your identity was stolen in the first place. Understanding how your identity was stolen is a significant tool for avoiding it from occurring again.
Malware, or harmful software that hackers fool users into downloading on their computers or mobile devices, is a prevalent means of identity theft. Hackers can steal passwords, account numbers, and other personal information once this programme is installed on a computer.
As a result, especially if your identity has been stolen, it is critical to conduct antivirus scans on your devices and verify the security of your home Wi-Fi to ensure that your personal information is not compromised.
10. Change your passwords
When you have verified your devices for viruses and ensured that everything is safe, you should change the passwords for your most frequently used and important accounts.
11. Repair your credit
Now that your reports have been submitted, institutions have been alerted, and your accounts are protected, you can concentrate on rebuilding your credit.
The length of time it takes to increase your credit score is determined by a variety of factors, including your previous credit score and the extent of the fraud. Yet, with the correct papers, it won't be long before you're back on solid financial ground.
You may also employ a credit service that analyses your credit report, rejects inconsistencies, and continuously monitors your credit for possible problems, such as the one we provide here at social credit repair.