Everything You Need to Know About Identity Theft
Data suggests that higher-impact fraud (which costs the victim greater losses) is on the rise. Protect yourself: here’s everything a safe and savvy person should know about ID theft, and what to do if your identity is stolen.
What is identity theft?
Identify theft, also known as identity fraud, is the fraudulent use of someone else’s personal information. Personal information includes, but is not limited to, full name, social security number, birthdate, address, driver’s license number, bank account number, credit card number — really any information intended for use by only one person, or any combination of that information. ID thieves typically use personal information for monetary gain, but a stolen identity could also be used to escape their actual identity or to qualify for specific benefits like health care and employment authorization.
How does ID theft happen?
Identity theft is often the result of an online data breach, hack or scam where information is gleaned from a personal device or a company’s servers. But identity theft is not strictly an online risk. For example, credit and debit cards can be “skimmed” when you use them in real-world brick and mortar locations. Skimmers are small electronic devices that take an image of the card. They can be manually operated (perhaps by a predatory employee) or installed undetected into machines like ATMs or gas pumps. Identity thieves also retrieve information through stealing documents, typically from someone they know. In fact, so-called “friendly fraud” is on the rise. Identity fraud incidents where the victim and the perpetrator knew one another doubled in 2018.
Warning signs of identity theft
If you suspect that your identity has been stolen, you need to respond quickly! The sooner you take action, the sooner your accounts can be secured and restored to their previous status. Spring into action if you see any of the following warning signs. Remember, since your identity can be stolen and used in many different ways, the crime doesn’t always manifest the same way.
Suspicious activity on your bank or credit card accounts
Unauthorized charges are a dead giveaway that someone else has access to your account, and by extension, your money. Keep an eye on your statements and make sure you can verify every purchase, even the small ones. Fraudsters often make a smaller test purchase ahead of a larger spree in order to see what they can get away with.
Mail or notifications regarding accounts you didn’t open
Beyond cleaning out the accounts you already have, identity thieves may also create new accounts in your name. Suddenly receiving bills or collection notices for an account you didn’t open is a definite problem.
Unverified activity on your credit report
Your credit report outlines your accounts and inquiries from lenders. Regularly inspect your credit report for any unknown new tradelines (credit accounts) or voluntary inquiries from lenders that you did not request. Be aware that identity fraud might not change your overall credit score right away.
Unexpected IRS communication regarding tax return, transcript or refund
If someone else is using your social security number, you’ll eventually see evidence from the IRS. You might receive a notice that you’ve already filed your tax returns when you haven’t, see incorrect information about your place of employment listed on your returns or receive a return or transcript that you did not request.
False medical charges or health insurance claims
Criminals may use stolen identities to obtain medical care. If you receive bills or collection notices for medical procedures, or if your health insurance company issues an incorrect notice that your spending limit has been met or specifies a condition that you don’t have, you might be the victim of medical ID theft.
An alert that your data has been breached
In the event of a big data breach, you will likely receive a message directly from the retailer, bank or other organization that experienced the breach. Take these alerts seriously – they wouldn’t give their customers a scare unless the threat was well founded.
What to do if your identity gets stolen
1. Report fraudulent activity to all of the companies or banks where it occurred
Call each company, retailer or financial institution known to be affected and explain that your identity was stolen. Be prepared to verify your last purchase or activity and listen to any specific company-recommended next steps. Ask for a hold on your account to prevent further fraudulent activity. Note: you may need to provide further documentation of the ID theft in order to completely reverse the fake charges. However, contacting the company or bank with the compromised account(s) should still be your first step, since it’s often the quickest way to start limiting the potential damage.
2. Request your credit reports and submit a fraud report
There are three major credit bureaus that issue credit reports: Experian, TransUnion and Equifax. If you don’t already have them, request all three reports so you can better ascertain the extent of the fraud. Next, submit a fraud report with any of these credit bureaus. As soon as the first bureau processes your report, they will notify the other two, freeing you to focus on the rest of your damage-control tasks. From there, the bureaus will post a yearlong security alert on your account, which notifies potential lenders that your account may have been compromised.
The security alert also requires lenders to take extra steps to verify your identity before granting new lines of credit. You may also choose to add a credit freeze to each bureau. Unlike a security alert, which still allows new credit to be taken out in your name, a security freeze completely prohibits new lenders from viewing your report or issuing new lines of credit unless you first unfreeze your account (usually using a secure PIN).
3. Report the identity theft to the Federal Trade Commission (FTC)
The FTC’s sole purpose is to protect consumers. In recent years, it has ramped up its resources for victims of identity theft. Report the crime to the FTC via its online form at IdentityTheft.gov, or by calling 1-877-438-4338. Include as many details as you possibly can. After your submission, the FTC will send you a completed ID Theft Complaint report and a personalized recovery plan to guide your resolution. Save digital and print copies of the FTC report. You will need this documentation to file a police report and to arrive at resolutions with creditors and fraudulent accounts.
4. Submit a police report
At this point, submit a police report at your local police station. Bring the completed FTC report with you, along with a copy of this law enforcement memo from the FTC. The police report increases the likelihood of the perpetrator being prosecuted. Even if justice is never served, the police report is still important. You will likely need to submit both the FTC and police reports to dispute fraudulent activities on your credit report, or to correct your account history with certain institutions.
5. Report a misused social security number
If you believe the ID thief has access to your social security number, there are a few extra steps in order. If the card itself was stolen, request a new one directly through the social security administration. This service is free, so do not be tricked by third-party scams asking for a payment. If you suspect someone was using your social security number for employment purposes, review your social security work history by creating an account at www.ssa.gov. If you find fraudulent activity, report it through your local office.
6. Replace your driver’s license
Driver’s license numbers are frequently used as a means of identification. If someone has access to yours, contact your state’s Department of Motor Vehicles and follow their instructions to get a new license and license number.
7. Change all of your passwords and account info
If you haven’t already, assign new, secure passwords to all of your online accounts. Change your security question(s) if you can. Avoid using personally identifying passwords, such as your mother’s maiden name or the last four digits of your social security number.
How to protect yourself from future identity theft
In a best case scenario, ID theft presents a huge headache for anybody trying to re-establish the security of their personal information. At its worst, it entails significant out-of-pocket expenses and negative repercussions on financial and personal matters that take years to overcome. Stay vigilant and protected in the future by taking the following measures:
Monitor your credit reports and bank accounts.
Unauthorized charges, suspicious activity and unverified credit requests are all immediate calls to action. All of the major credit bureaus allow you to periodically check your credit report for free. Subscribing to a credit monitoring service via your bank or another financial institution is also an option for more hands-on monitoring.
Practice safe document handling & don’t ignore your mail.
Shred documents with personal information. Keep sensitive documents locked up. Junk mail is not always harmless. Keep an eye out for suspicious messages, unexpected billing statements and/or mysterious requests and confirmation messages.
Opt into all-in-one ID theft protection.
Staying vigilant prevents the worst parts of a stolen identity, but the warning signs can be subtle and hard to track. ADT’s Identity Theft Protection combines a spectrum of monitoring, reporting and resolution services into one monthly service package, to automatically keep tabs on your identity and organize the details in one space.