What can you do if your identity is stolen? Identity theft is certainly no fun, as it comes with dealing with banks, insurance adjusters, and credit card companies. There is also that feeling of violation, on a personal level.
However, you can get through it, and with your sanity intact. This article dives into the details of identity theft, and what to do if your identity is stolen.
Understanding identity theft
Identity theft happens when someone uses your sensitive data to pose as you or steal from you. Identity thieves may drain your bank and investment accounts, open new credit lines, get utility services, and steal your tax refund. They can also use your insurance information to get medical treatments or give police your name and address when they are arrested.
Frequent data breaches mean your information may already be exposed. In this new reality, it’s smart to take steps to prevent malicious actors from using your personal information and ruining your financial life.
More than 15 million people were victims of traditional identity fraud last year, according to the 2023 Identity Fraud Study from Javelin Strategy & Research. That number is roughly the same as the previous year, but the amount of money consumers lost dropped 15% to $20 billion.
While that is still significant – and doesn’t include the $23 billion lost to scams – the downward trend is encouraging. Javelin notes that years of outreach from consumer advocacy and financial services groups may be turning the tide as consumers become more savvy about how fraudsters operate.
Still, criminals continue to find new ways to defraud people so it’s crucial to remain vigilant.
Who is stealing your identity?
Identity thieves are a diverse group, and many come from quite unexpected places. Many victims know their attackers – it could be a co-worker, friend, employee, neighbor, or even a family member. Tech-savvy children may see benefits in stealing Mom or Dad’s credit card and Amazon login to buy a few items, assuming there’s no real ‘victim’ if they eventually come clean and apologize.
Work acquaintances may see an opportunity too good to pass up if you leave your computer unlocked or your wallet sitting out.
Petty criminals are getting in on the action since it’s possible to download turnkey malware programs for little or no cost. Organized crime gangs using trained computer science graduates are also out looking for large quantities of personal data. These groups are often responsible for significant retail attacks and healthcare breaches.
The sheer volume of this data is worth a great deal on the black market.
Types of identity theft and the warning signs
Once a criminal has your info, here are common ways that they may exploit it:
Credit identity theft
Credit identity theft happens when a criminal uses your personal information, such as birthdate and Social Security number, to apply for a new credit line.
Warning signs: You might see an unexpected change in your credit scores or an account you don’t recognize on your credit reports. You may get debt collection notices or a court judgment against you. The best way to prevent it is to freeze your credit.
Criminal identity theft
Criminal identity theft occurs when someone gives law authorities someone else’s name and address during an arrest or investigation. This is often done with false identification, such as a fake driver’s license.
Warning signs: You may be detained by a police officer for reasons that are unclear to you, or be denied employment or a promotion because of something found in a background check.
Taxpayer identity theft
Sometimes fraudsters use a Social Security number to file a tax return and steal your tax refund or tax credit.
Warning signs: You may be unable to e-file because someone else has already filed under that Social Security number, you get an IRS notice or letter referencing some activity you knew nothing about or IRS records suggest you worked for an employer that you did not.
Filing early can help you beat criminals to filing in your name, and some states offer six-digit identity protection PINs (after a rigorous verification) with additional security.
Account takeover
Criminals use personal data to access your financial accounts and then change passwords or addresses so that you no longer have access.
Warning signs: An email, letter, or text from your financial institution that refers to an action (like a password or email change) or transaction you don’t recognize.
Child identity theft
Criminals steal a child’s identity and apply for credit in that child’s name. Often it is not discovered until the victim applies for college loans or other credit.
Warning signs: If your child is getting offers of credit cards or phone calls about late payments or debt collections, investigate. You can freeze your child’s credit to prevent it.
Medical identity theft
Using someone else’s identity to get health care services is medical identity theft. It’s particularly dangerous because it can result in medical histories being mixed, giving doctors and hospitals wrong information as they are making health care decisions.
Warning signs: Claims or payments on your insurance explanation of benefits that you do not recognize can suggest that someone is using your health care benefits. If you are a victim, you’ll need to both report it to your insurance company and inform your healthcare team to be sure the information in your healthcare records is actually yours.
Synthetic identity theft
Synthetic identity theft is when criminals use a patchwork of identity details to construct a fictitious consumer, using a Social Security number — often one of a minor child or one that is simply made up — that is not yet in the credit bureaus’ database and combining it with a name and address.
They then apply for loans and credit cards, often making payments for years as the credit limits grow. This is followed by a “bust out,” when cards are maxed out and the criminals disappear.
Warning signs: If you try to freeze your child’s credit and discover their Social Security number is already in use. Often it is not discovered until the child is applying for student loans. It is not always preventable, because sometimes criminals make up and use a Social Security number even before it’s assigned.
What to do if your identity is stolen
If you do find you’re a victim of identity theft, here are some steps to minimize the damage.
Notify companies of your stolen identity
Don’t wait to notify any company where fraudulent transactions or accounts have occurred. Call them immediately to alert them to the problem.
In the case of an account takeover, your credit card number might be compromised but thieves may not have access to your personal information. However, if someone is opening accounts in your name, impersonating you, or using your Social Security number, you may want to proactively contact other companies and agencies.
For example, you should notify the IRS if your Social Security number was used to file an income tax return. You can do this by submitting a Form 14039 Identity Theft Affidavit.
Likewise, if someone is impersonating you, alert your health insurance company in case they attempt to obtain medical care under your name or policy number.
File a claim with your identity theft insurance
If your identity is stolen and you have an identity theft protection plan, your provider should be able to guide you through many of the following steps. Companies such as IDShield and Aura sell identity theft protection plans, but even if you haven’t purchased coverage, you may have it through an insurer or employer.
Some employers offer identity theft resolution services as a job benefit and some insurers may roll it into their products. For instance, Chubb offers complimentary identity theft resolution services to its policyholders.
File a report with the Federal Trade Commission
The Federal Trade Commission, or FTC, compiles information about identity theft cases. It can’t pursue criminal charges, but its information may be used by law enforcement agencies such as the FBI to track down perpetrators.
To file a report with the FTC, visit www.identitytheft.gov. As part of the reporting process, you’ll receive a recovery plan and even prefilled letters and forms that can be used to file police reports and dispute fraudulent charges.
Keep in mind that identity theft is defined as impersonating another person or using their information for financial gain. A stolen credit card number or security breach does not have to be reported to the FTC.
Contact your local police department
The next step is to file a report with your local police department and ask for a copy of it for your personal records. This creates a paper trail that could be useful in the future. For instance, if someone uses your information to commit a crime, having documentation of identity theft could make resolving the matter easier.
Although the police may not be able to do anything if your identity is stolen by criminals online and overseas, your report could help them track down someone who is stealing information locally.
Place a fraud alert on your credit reports
The next step to take if your identity is stolen is to follow up with the three major credit bureaus – Experian, Equifax and TransUnion – and ask them to place a fraud alert on your account. The fraud alert stays on your credit report for a year, and it notifies any institution that pulls your credit report to the fact your identity may be compromised.
Just because you had a problem and it was fixed doesn’t mean the problem goes away. Your personal information could – and probably will – continue to circulate among scammers. This means it may only be a matter of time before someone else tries to open a fraudulent account in your name.
The fraud alert notifies a creditor to take a closer look at the person applying to make sure it’s you. You only have to request a fraud alert from one of the credit bureaus, and that company should notify the other two firms. If you have an identity theft report from a law enforcement agency, you can submit a request for an extended fraud alert that will last seven years.
Requesting a fraud alert is free.
Freeze your credit
For an added layer of protection, you can initiate a credit freeze. This will completely cut off access to your credit report and means the credit bureaus won’t share it with anyone who requests it.
Credit freezes can also be a smart way to protect children from identity theft. If a child’s Social Security number is compromised, you might not know about that for years. However, a credit freeze eliminates the possibility of someone opening accounts with their number.
You’ll need to contact each bureau individually to request they freeze your credit. The process is free, and you can lift the freeze at any time.
Tighten security on your accounts
Another step to take if your identity is stolen is to review passwords. Using a password manager, such as Bitwarden or Dashlane, is an easy way to ensure all your accounts have strong passwords. Enable two-factor authentication if available. This will require both a password and a code delivered via email, text or phone for access to an account.
Using unique passwords can diminish the damage should a criminal gain access to one of your accounts.
Other ways to avoid future instances of identity theft include shredding documents with personal information, and not carrying your Social Security number in your wallet. Also, do not click on links in emails from suspicious or unknown senders.
Delete any personal information such as addresses and phone numbers from public profiles on social media and other sites.
Ways to prevent identity theft
- Freeze your credit
- Safeguard your Social Security number
- Be alert to phishing and spoofing
- Use strong passwords and add an authentication step
- Use alerts
- Watch your mailbox
- Shred documents containing sensitive information
- Use a digital wallet
- Protect your mobile devices
- Check your credit reports regularly
Recommended Articles
- Why Is Cybersecurity Important?: All You Should Know
- What is Tailgating in Cybersecurity & How to Prevent It
- CIA Triad in Cybersecurity: What Is It & Why Is It Important?
- What Is Keylogging & How Does It Work?
- Cybersecurity Specialist: Definition, Duties & How to Become One
- Spoof Calling: What Is It & How Do You Avoid It?
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