What to Do If Your Identity Is Stolen: A Step-by-Step Guide

7 MIN. READ

 

Key takeaways:

 

• Identity theft is on the rise, and it’s important to know how to recognize the signs and what to do if you’re a victim.
• You can protect yourself by using unique passwords, enabling multi-factor authentication, monitoring financial accounts and credit reports, and staying alert for phishing scams.
• We share more tips for reporting identity theft and keeping your information safe.

Identity theft is one of the fastest-growing types of crime, facilitated in part by the amount of personal data available online. Being a victim of identity theft can be stressful and overwhelming, but it’s crucial to stay calm and act fast. And, given how prevalent this type of crime is, it can be helpful to educate yourself about the steps to take in case it ever happens to you.

What Is Identity Theft?

Identity theft happens when a criminal uses your personal information to impersonate you. They may use your Social Security number, account credentials, credit card details, or other sensitive information. The goal is usually to access an account, make a purchase, open a new credit card, or even file a tax return in your name.

What To Do If You’re a Victim of Identity Theft?

Act quickly to protect your money and limit the amount of damage the criminal can do:
 

• Contact your credit union, bank, credit card issuer, or any company where fraud occurred. Ask them to freeze the affected cards or accounts.
• Change passwords for affected accounts, starting with your email and financial accounts, and turn on multi-factor authentication.
• Report the identity theft at IdentityTheft.gov. The Federal Trade Commission has a helpful recovery plan and an online form you can fill out to report the incident.
• Review your credit reports for accounts or inquiries you do not recognize, and reach out to the three credit bureaus to request a credit freeze.
• File a report with your local police department. They may not be able to track down the criminal, but you’ll need a police report to dispute fraudulent charges.
• Document everything related to the fraud, including unauthorized transactions, account numbers, dates, screenshots, emails, letters, case numbers, and the names of representatives you speak with.

How Common Is Identity Theft?

With 6.4 million cases reported to the FTC a year on average, identity theft is one of the most common types of crime.

Identity theft is growing fast, and criminals are getting more resourceful with the methods and technologies used to steal your data.

How Does Identity Theft Happen?

Identity thieves use many methods to get personal or financial information, including:
 

• Phishing emails, texts, phone calls, or fake websites designed to steal passwords, verification codes, or account details.
• Data breaches that expose login credentials, Social Security numbers, or other personal information.
• Malware, unsecured devices, or compromised public Wi-Fi networks.
• Stolen wallets, mail, documents, or electronic devices.
• Social-engineering scams that pressure someone into sharing personal information or sending money.

Can I Take Steps to Prevent Identity Theft?

Given that several major data breaches have exposed millions of records, your information may already be available to criminals.

It may not be possible to completely eliminate the risk of identity theft, but you can take steps to protect yourself:
 

• Always use strong passwords for your online accounts and change them often.
• Most banks and credit unions give you the option to use multi-factor authentication to get into your accounts. Make sure this feature is turned on.
• Review account statements, transaction alerts, and credit reports regularly so you can spot suspicious activity quickly.
• Be cautious with unexpected emails, texts, calls, and links. Never share a password, verification code, PIN, or Social Security number in response to an unsolicited request.
• Keep devices, browsers, and apps updated, and avoid signing in to financial accounts on public Wi-Fi networks.
• Shred documents containing personal or financial information before throwing them away. 
• You can contact Equifax, Experian, and TransUnion and ask to add a credit freeze. This means no new account can be opened without your explicit authorization.

What Are the Signs of Identity Theft?

Identity theft is not always obvious, and criminal activity can happen over months or years if the criminals aren’t directly draining your bank account. 

Here are some signs you should watch out for:
 

• New accounts, credit inquiries, addresses, or debts on your credit report that you did not open or authorize.
• Bills, collection notices, benefit statements, or medical charges for services you did not receive.
• Missing mail, unexpected credit cards, or notices that your mailing address or account contact information has changed.
• An unexplained drop in your credit score or being denied credit unexpectedly.
• Being locked out of an online account or seeing unfamiliar password-reset or security-alert emails.

You can get a free copy of your credit report from each of the three reporting bureaus and review it for new accounts and activity you don’t recognize.

If you notice any of these signs, contact the affected company right away and report suspected identity theft at IdentityTheft.gov.

How Does Identity Theft Impact Me?

Having your identity stolen is a stressful event. You might find yourself locked out of your accounts and can even lose money.

Credit Score

The good news is that you can dispute any unauthorized charges and new accounts once you get an affidavit from the FTC. However, this process is time-consuming, and it can take a few weeks before the three credit bureaus update your credit report. Meanwhile, you will likely see your credit score drop.

Financial Liability

Financial liability depends on the type of fraud committed. If a criminal made unauthorized purchases with a debit or credit card, you'll only be responsible for up to $50 as long as you report the fraud to the FTC within 2 business days. If you take longer, you may be responsible for up to $500, or for the full amount if you take more than 60 days to report the fraud. Check your cardholder agreement for more details.

You're generally not responsible for fraudulent tax returns or benefits claims as long as you took the necessary steps to report the fraud.

Future Risks

Unfortunately, it’s difficult for law enforcement to catch identity thieves. These criminals are usually free to keep operating once they have obtained your personal information.

You need to take a few fraud-prevention steps to anticipate future risks. You can prevent fraud by placing a fraud alert on your credit report. Creditors will have to contact you and verify your identity before opening a new credit line.

You can choose to freeze your credit as an alternative. In this case, you’ll have to give your authorization before the credit bureaus can release your credit report.

You should also file your tax return early and contact the Taxpayer Protection Program or file Form 14039 if the IRS rejects your return because of a pre-existing fraudulent filing.

What’s the Difference Between a Credit Freeze and a Fraud Alert?

A credit freeze and fraud alert can both make it harder for identity thieves to open new accounts, but they work differently.
 

Feature	Credit Freeze	Fraud Alert
What it does	Restricts access to your credit report, making it harder for someone to open new credit in your name	Tells lenders to take extra steps to verify your identity before opening new credit
How to set it up	Contact Equifax, Experian, and TransUnion individually	Contact one of the three credit bureaus; it will notify the other two
Best for	People who have experienced identity theft or want stronger protection from new-account fraud	People who suspect their information may be at risk and want an added layer of verification
Effect on existing accounts	Does not stop activity on existing bank accounts or credit cards	Does not stop activity on existing bank accounts or credit cards
Cost	Free	Free
How long it lasts	Remains in place until you lift it	An initial fraud alert typically lasts one year

What To Do If Tax Identity Theft Happens?

Identity thieves can use your SSN to file a fraudulent tax return. The goal is usually to collect a tax return by reporting false income information.

A common warning sign is the IRS rejecting your return and saying a return has already been filed for this year.

If you suspect tax-related identity theft, report it through IdentityTheft.gov or file IRS Form 14039, Identity Theft Affidavit. You should also call 800-908-4490 to get help from the IRS.

What To Do After a Data Breach?

A data breach means that some of your data has been exposed to unauthorized people. The scope can vary based on the kind of data exposed and who had access to it.

Being a victim of a data breach doesn’t necessarily mean your identity will be stolen, but you should be cautious and keep an eye on your accounts and credit reports.

Here are some steps you can take:
 

• You should change the passwords for the affected accounts right away.
• If you weren’t using multi-factor authentication before, turn this feature on.
• Monitor financial statements and keep an eye on your credit report.
• Some organizations will offer complementary credit monitoring or identity-protection services after a data breach. These services can be worth using.
• Consider a free credit freeze if the breach involved your Social Security number or other sensitive personal information.

Stay Safe with Power Financial Credit Union

At Power Financial Credit Union, protecting your accounts and personal information is a priority. We use fraud-prevention technology and stay informed about emerging fraud trends to help protect our members.

For instance, you can add an extra layer of protection to your online banking account with multi-factor authentication (MFA) and time-based one-time passcodes (TOTP).

Learn more about how we help prevent fraud and protect our members.