Identity theft can take on many forms.
Identity theft has topped the list of consumer complaints filed with the FTC for 13 consecutive years and there's no evidence that this year it won't make the list for the 14th. Just how many victims of identity theft are there each year? While we don't yet have the figures for 2013, a Javeline report puts the numbers from 2012 at 12.6 million. Factor in the more than 70 million Americans impacted by the recent Target and Niemen Marcus data breaches, and it's clear why identity theft is a major concern for many Americans.
Identity theft takes many forms. Some of the most common include:
Credit card fraud
False applications for new credit
Fraudulent withdrawals from a bank account
Fraudulent use of telephone calling cards
Fraudulent use of an IP address in order to engage in illegal acts online
Fraudulent use of medical care
Social security fraud (for tax and employment fraud)
If you know or suspect that you are the victim of identity theft, there are steps you should take immediately to stop the theft and minimize the damage.
1. Put a Fraud Alert on Your Credit Reports
A fraud alert puts a red flag on your credit report and notifies lenders and creditors that they should take extra steps to verify your identity before extending credit. To place a 90-day fraud alert on all three of your credit reports, you only need to contact one of the three credit reporting agencies (Experian, Equifax, or TransUnion). When you place the initial alert, they will automatically notify the other two agencies for you.
Another option — and a more effective identity theft prevention measure — is to place a security freeze on each of your credit reports. A freeze prevents creditors (except those with whom you already do business) from accessing your credit report(s) at all. New applications will automatically be declined. With a security freeze in place, you will need to take extra steps if you wish to apply for new credit. Each agency has a procedure for temporarily "thawing" your file in order to allow a legitimate application to be processed and unlike a fraud alert, you'll need to contact each agency individually to place a freeze on each of your reports. See more information about security freezes here: Experian, Equifax and TransUnion.
When you place a fraud alert on your credit reports, you’re entitled to a free copy of your credit report from each of the three agencies. Be sure to obtain them. If you find fraudulent items on your credit report(s), the simplest way to begin the dispute process is to click the item while viewing your credit report online. Some items must be disputed in writing and with supporting documentation. Hard inquiries cannot be disputed, but may give you a clue as to where a thief has applied for credit in your name.
Initial fraud alerts are free and remain in place for 90 days. In some cases, security freezes and extended fraud alerts incur a small fee, but these services are free to victims of identity theft.
2. Contact Any Institution Directly Affected
For example, if you know your credit card was stolen, report the theft to the credit card issuer. If your checkbook was stolen, contact your bank.
For this step it's really helpful if you've prepared a list of institutions and phone numbers in advance. You don't have to write account numbers down on the list — that would be just one more way for a thief to gain access to your personal information. But do keep a list of what's in your wallet, along with the contact information for each item.
3. Contact the Federal Trade Commission (FTC)
File an Identity Theft Affidavit and create an Identity Theft Report. You can file your report online, by phone (toll-free): 1-877-ID THEFT (877-438-4338); TDD (toll-free): 1-866-653-4261, or by mail — 600 Pennsylvania Ave., Washington DC 20580.
The FTC will provide you with information about what to do next, depending on what type of fraud was (or may have been) committed.
4. File a Police Report
To complete the Identity Theft Report, you'll need to contact your local law enforcement office and report the theft. Be sure to get a copy of the police report and/or the report number. Both your police report and the FTC Identity Theft Affidavit combine to create your Identity Theft Report. Your Identity Theft Report will help you when working with the credit reporting agencies or any other companies the identity their may have used to open accounts in your name.
5. Protect Your Social Security Number
If your social security number was or may have been compromised, contact the Social Security Administration (800-269-0271) and the Internal Revenue Service (800-829-0433).
It's important to talk to the SSA if you have reason to believe your social security number has been compromised, even if you don't yet see any evidence of financial fraud. A thief could be planning to swipe your tax refund, or to obtain employment in your name.
In addition to these five steps, if you have reason to believe the identity thief may have submitted a fraudulent change-of-address to the post office or has used the U.S. mail to commit the fraud against you, contact the Postal Inspection Service, which is the law enforcement and security branch of the post office. Fill out the online form.
This list is not exhaustive. These are only some of the first few steps. Indeed, clearing the wreckage of identity theft can be a laborious and complex process. For more information about how to prevent or recover from identity theft, the U.S. Department of Justice and the Federal Trade Commission offer a wealth of information and will walk you through the steps.
CORRECTION: This article was updated on 1.30.14 to address the difference between a fraud alert and a security freeze.
Originally written by Kimberly Rotter for Credit Sesame.
Credit Sesame is the consumer's credit and loan expert, helping them make smarter financing decisions. Credit Sesame is the best way to receive your free credit score, credit monitoring and find out how you can save on your credit cards, loans and mortgage.