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Guest Post by Sean Messier
Identity theft can happen to anyone at any time, and for a variety of reasons. Sometimes, it may result from your own less-than-careful behaviors. Other times, you’re simply at the wrong place at the wrong time, like with credit card skimming. And in some cases, your information could have been stolen through a remote hacking operation, like the infamous Equifax breach of 2017, which impacted millions of individuals around the world.
But regardless of how the incident began, identity theft is a danger for which you should always be on the lookout. If you’re not, it could make your life extremely difficult in the future.
Defining identity theft
True to its name, identity theft is a crime that involves using the identity of another person — whether by way of their credit card number or personal information — for personal gain.
Specifically, Merriam-Webster defines identity theft as “the illegal use of someone else's personal information (such as a Social Security number) especially in order to obtain money or credit.”
This definition alone should make it clear just how dangerous a threat identity theft can be. If someone can secure credit in your name, they can spend heaps of money that neither they nor you actually have, leaving you with massive bills for items that you never purchased in the first place. And if these charges aren’t addressed appropriately, identity theft can deal major damage to your credit and general financial stability, potentially turning your life upside-down.
That’s why it’s vital to understand exactly how to respond if you believe your identity has fallen into the hands of the bad guys.
Responding to identity theft
For simple cases
In the simplest of cases, you may be able to respond to identity theft quickly and easily. This is particularly true if it’s just your credit card information that was stolen. If this is the case, you should take the following steps:
- Contact your issuer to cancel the card(s) and report the incident as soon as possible. Your issuer should send you a replacement card with a new number, rendering the prior information unusable.
- Report and dispute the fraudulent charges with your issuer. Under federal law, you have up to 60 days to do so. You can do this in writing, but many issuers allow you to dispute charges online for your convenience.
- Monitor your credit card statements and credit reports to make certain nothing else is happening.
For complex cases
Unfortunately, more complex cases might also be more difficult to resolve. This is especially true if enough information was stolen — your name, your Social Security number, your address, etc. — to successfully open various credit cards in your name.
The steps you’ll want to take will vary depending on your case, but as a rule of thumb, here’s a basic response process that should deliver solid results:
- Immediately report your existing credit cards lost or stolen if you believe your credit card numbers were among the information affected.
- Next, reach out to the nation’s consumer credit bureaus: Equifax, Experian, and TransUnion. You can set fraud alerts if you believe you’ve fallen victim to identity theft. If you activate alerts with one bureau, they’re legally mandated to inform the other two.
- If you believe other personal information, such as your Social Security number and/or birthdate, has been used in an identity theft incident, report the incident to IdentityTheft.gov. This will get you an identity theft report, as well as a custom recovery plan. You’ll be able to track your progress, and you’ll even have access to helpful resources, like prefilled form letters, which can help you dispute fraudulent accounts and charges.
- This will only be necessary in certain situations, but you may want to file a police report with local police.
- Once you’ve alerted the appropriate entities, start cleaning up the damage done by attempting to close the accounts that were opened in your name and removing fraudulent charges. You can generally accomplish this by contacting the fraud department of the companies associated with the fraudulent credit accounts and explaining the situation. You may need to send a copy of your identity theft report, depending on the company’s policy. Thoroughly document your contact with each company, just in case.
- Write to each of the credit bureaus, and include a copy of your FTC identity theft report. Request that the fraudulent information be removed from your credit reports — a process known as “blocking.” Per federal law, your request must be honored if you have an identity theft report. You can still try to dispute the charges without a report, but it might take longer, and there’s no guarantee that it’ll work at all.
These steps should help you kick-start your trip down the path to identity theft recovery, but they’re not a one-size-fits-all solution. The little details of identity theft vary widely by situation. You may have to take a different approach.
If this process doesn’t make the cut, explore IdentityTheft.gov’s full list of possible identity theft recovery steps.
Preventing identity theft
Identity theft can happen when you least expect it. A proactive approach to prevention can help you keep the risk to the minimum. Even if you don’t believe your identity is at risk, the following best practices can keep fraudsters’ hands off your private information in the meantime:
- Be guarded with your information. Only use credit and debit cards with reputable merchants, particularly online. Plus, ensure that other information, like your Social Security card, is stored safely and securely.
- Monitor your credit proactively. It’s impossible to overstate the importance of credit monitoring. The good news is that monitoring your credit is free and easy to do on your own. If you’re confident you won’t have the time, there are services that can help make things simpler.
- Use a credit card instead of a debit card whenever possible. Credit cards offer much more effective security measures, and credit card users have more thorough protections under federal law.
- Consider using virtual credit cards. Virtual credit cards are only offered through certain issuers, but they’re useful if you’re worried about security. Some virtual credit cards offer temporary, merchant-specific numbers, and you’ll often be able to set specific spending limits in order to curb the amount of damage that could be done in the event of identity theft.
A credit industry analyst at Credit Card Insider, Sean Messier strives to empower individuals with the knowledge required to use credit cards to their advantage. His writing and research-based background has granted him experience in an array of topics, from finance to business and beyond.