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.
What to do if your identity gets stolen
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.
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).
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.
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.
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.
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.
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.