If your identity is stolen, the first thing you need to do is report the crime to the Federal Trade Commission (FTC). The sooner the authorities are aware of identity theft, the faster you can get your name back and resolve any damages.
The problem is that most victims aren’t aware of any crime until it’s already occurred.
It’s not until they find an unexplainable drop in credit scores or an unusual charge on their credit card statement or otherwise that they suspect something is awry.
No one expects to be a victim of identity theft, so when it does happen, people are often unsure about what they need to do. This article is intended to address that issue by outlining the most important steps to take when reporting identity theft.
Report Identity Theft to the Federal Trade Commission (FTC)
The first action you should take is to report the identity theft to the FTC and obtain an Identity Theft Report. You can provide that report to creditors and businesses to prove you are indeed a victim of identity theft. In fact, you can even use the report instead of a police report in many cases.
The Identity Theft Report enables you to:
- Block any company from continuing to collect debts resulting from identity theft (or selling them to debt collectors).
- Place an extended fraud alert on your credit report that requires businesses to verify your identity before they issue new credit. Extended fraud alerts last for seven years and are only available to victims of identity theft.
- Prevent fraudulent information stemming from identity theft, such as fake accounts and addresses, from appearing on your credit reports.
- Ensure that fraudulent debts are not listed on your credit reports.
An Important Note About Filing a Police Report
Many victims of identity theft instinctively feel it is appropriate to notify the police. However, the FTC, which is the principal law enforcement agency for identity theft, says there are only three times identity theft victims should file a report with local police. Contact the police when:
- You know who the criminal is or you possess other vital information that could assist a police investigation.
- The thief used your name in an encounter with the police.
- A creditor, collector or another party you do business with demands you give them a copy of a police report.
If you do file a police report, show them a copy of your Identity Theft Report and give them as many details as you can.
Consider Using Fraud Alerts or Freezing Your Credit Report
You have a right by law under the Fair Credit Reporting Act (FCRA) to put a fraud alert on your three credit reports (Equifax, Experian and TransUnion). Alternatively, you might consider freezing your credit reports to limit access to them and make it harder for thieves to open new accounts in your name.
Here’s what you need to know to determine whether you should put a fraud alert or a freeze on your credit reports:
Fraud Alerts
Fraud alerts help protect your credit from being used to open unauthorized accounts. With a fraud alert in place, lenders must confirm your identity before approving new credit that is associated with your Social Security number.
There are two types of fraud alerts:
- An initial fraud alert is good for one year (formerly 90 days) and is available for free to anyone looking to safeguard themselves against identity theft. It’s important to note, if your Social Security number is compromised, it might take several years before a criminal uses it to commit identity theft. With this in mind, you might prefer an extended fraud alert.
- The extended fraud alert is good for seven years and is only available to victims of identity theft who have filed an FTC Identity Theft Report Like an initial fraud alert, the extended fraud alert requires businesses to verify your identity before they approve new credit.
To enable an extended fraud alert, contact one of the three major credit reporting agencies using the contact information below. The credit bureau you contact will notify the other two credit bureaus on your behalf.
The credit bureau may ask you to complete a request form and you’ll need to submit a copy of your FTC Identity Theft Report.
Credit Freeze
While a fraud alert allows companies access to your credit reports as long as they identify your identity and you grant them access, a credit freeze restricts most access to your credit reports, whether or not your identity can be verified. A credit freeze is the best way to ensure your credit isn’t used without your permission. It provides a mechanism to stop the bleeding when identity theft occurs and it helps to prevent the creation of new credit accounts.
A fraud report requires there to be an actual case of fraud. A freeze, on the other hand, is about preventing access to your account. A freeze may not be beneficial if you are already a victim of fraud, but it serves as an excellent preventative measure.
Keep in mind, a credit freeze helps stop thieves from opening new credit accounts, but it may not stop unauthorized use of your existing accounts. Additionally, companies you already do business with may still be able to access your credit reports.
Equifax Credit Information Services: 800-525-6285
Equifax Consumer Fraud Division
P.O. Box 740256
Atlanta, GA 30374
Experian: 888-397-3742
National Consumer Assistance
P.O. Box 9554
Allen, TX 75013
TransUnion: 800-680-7289
Fraud Victim Assistance Department
P.O. Box 2000
Chester, PA 19016-2000
Contact Creditors and Companies Affected
Contact your creditors and any other companies affected by the identity crime immediately.
Fortunately, most credit cards have zero-liability policies that protect their members who are victimized by identity theft. But when it comes to credit card fraud, you are also covered by the Fair Credit Billing Act (FCBA) that limits your financial liability for fraudulent charges to $50.
Meanwhile, debit cards and electronic transfers are protected under the Electronic Fund Transfer Act (EFTC). This law stipulates that you must report unauthorized charges within two days of learning about any such losses or you could be on the hook for a maximum of $50. Reporting the loss between two and 60 days increases your liability up to $500 and reports made after 60 days can result in unlimited liability.
You will also want to cancel your credit and debit cards and have new replacement cards sent to you.
If a scammer opens a new account in your name, contact the customer service department for help closing the account. The company may require a written letter, in which case you can use a sample letter the FTC provides on their website. It’s a good idea to keep records of the dates and times of when you call as well as who you talked to and the actions they advised.
The Bottom Line
If you are a victim of identity theft, the sooner you take the steps above the better. These steps are necessary to help stop criminals from continuing to inflict financial harm on you through the fraudulent use of your identity.
Settling identity theft issues can take several weeks or months. That’s why it’s important to act quickly to resolve the issues stemming from identity theft so you can get your identity back and put the ordeal behind you.
