Do You Know the Signs of Identity Theft?

Category: Finance , Privacy

Nobody wants to be a victim of identity theft, but if you're lucky, you'll know immediately when your identity has been stolen. A missing wallet or purse sets off an instant alarm. But many victims of identity theft don't learn of it until months after the fact, when enormous damage has been done to their finances and credit. Here's what to look for if you're concerned about possible identity theft...

Has Your Identity Been Stolen?

In some cases, the tipoff comes when you start receiving bills for things you did not buy. Even if your credit cards are still safely in your pocket, the information on them may be used to buy things online. Given the right personal information, identity thieves may open charge accounts, utility accounts, and unsecured loan accounts in your name. Often they use a billing address different from the victim's, so the first notice the victim receives is a call from a collection agency. By then, the victim may be on the hook for thousands of dollars with dozens of creditors. And the scammer could be long gone.

The first thing to do when you suspect that your identity has been stolen is to file fraud alerts with all of your financial partners and the major credit bureaus. Here are links and phone numbers for the credit bureaus. Equifax: 888-836-6351; Experian: 888-397-3742; TransUnion: 800-680-7289. You don't need to contact all three credit bureaus to place a fraud alert. The Fair Credit Reporting Act requires each of them to notify the others of the alert.

Fraud alerts expire after 90 days, but you can renew them. A fraud alert doesn't prevent you from opening a new credit account if needed. It does require creditors to do "due diligence" which means they have to contact you to make sure you really are the one trying to open an account.

Has Your Identity Been Stolen?

Fraud Alert or Credit Freeze?

You can also request a "credit freeze" from each of the credit bureaus, which prevents anyone - including you - from obtaining new credit in your name. A credit freeze will prevent new accounts from being opened, because it blocks lenders from checking your credit. A credit freeze won't stop you from opening a new account, but you will have to lift the freeze temporarily.

Unlike fraud alerts, you must contact each credit bureau (Equifax, Experian, and Transunion) to initiate a credit freeze. You'll need to supply personal information including your name, address, birth date, and Social Security number. When the freeze is done, you'll get a PIN or password from each of the credit bureaus, which you can use if you need to temporarily lift the freeze.

A credit bureau must lift a freeze within one hour, if you request it by phone or online. Requests made by mail can take several days. Ask which credit bureau the lender will be contacting, so you don't have to unfreeze all three of your credit reports.

Get Your Free Credit Reports (and Your Credit Score)

The credit bureaus are also required to give victims of identity theft free copies of their credit reports. (See my related article Free Credit Reports Online for more info.) These reports can help you discover unauthorized applications for credit made in your name.

Even if you're not concerned about possible identity theft, you can get FOUR credit reports every year for free. The link above will show you how it's done, how to avoid the potential pitfalls. And on a related note, do you know how a credit SCORE is different from a credit REPORT? See my article Here's How to Get Your Free Credit Score.

Minimizing the Damage of Identity Theft

If your credit card is lost or stolen, you must report it immediately. Once you have reported your credit cards stolen, you will not be liable for any additional charges that may be made with them. Use these phone numbers to contact the credit card companies:

  • American Express: 800-297-7672
  • Discover Card: 800-347-2683
  • MasterCard: 800-622-7747
  • VISA: 866-434-6854

Next step: File a police report. Although local police have little power to track down identity thieves across the country, a police report is generally required by other entities when you are trying to repair your credit record.

Contact your State's department of motor vehicles to see if anyone has tried to obtain a driver's license in your name. Do likewise with the Social Security Administration (800-772-1213). Request a copy of your Social Security earnings history to ensure that it is correct. It's not uncommon to find that someone else is working under your name.

If you're positive you have been a victim of identity theft, you should close all of your existing credit card accounts immediately. Replace them with new ones if you can. Ask your bank if closing your checking or savings account is a good idea as well.

Change all of your online passwords, even if they are not associated with financial accounts. Be sure to choose strong passwords with a mixture of upper and lower case letters, digits, and special characters. See my related article Is Your Password Strong Enough? for help selecting a good password.

A credit monitoring service may seem like a good idea right after you've been victimized by identity theft. Such services charge a monthly fee of $10 to $15 to monitor your credit records and alert you of any unusual activity. But they don't prevent identity theft; they only alert you to a problem after you have one. Yes, they will file all of the alerts mentioned above with credit bureaus and card companies, but you can do that yourself.

And credit monitoring services won't do the heavy lifting of defending you against fraudulent debts or rebuilding your credit. Most consumer advocates consider credit monitoring services to be a waste of money. Have you or someone you know had personal experience with identity theft? Post a comment or question below...

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Most recent comments on "Do You Know the Signs of Identity Theft?"

Posted by:

25 Feb 2020

Invaluable information. Probably one of your best articles. Chock full of what we as consumers need to know and who to call in case of a problem. Thank you!

Posted by:

25 Feb 2020

I arranged to receive an email for each and every transaction that is made either from my bank, my credit cards even when applying for a new credit card or loan.

Posted by:

Bill C.
25 Feb 2020

Super important info.

Thanks Bob !!

Posted by:

25 Feb 2020

Same here. Because of illegal use of credit cards ,I had already put a $100.00 hold on my credit card charge ,until I "OK'd it. Since I was already a subscriber to Credit Karma ,they e-mailed me because of my current account with them they will e-mail me any activity on any one of the 3 reporting co. on a daily basis.

Posted by:

25 Feb 2020

Great article! I appreciate it very much! Thanks

Posted by:

25 Feb 2020

The big thing this time of the year in the US is if someone has all your info they could file a tax return in your name and make the numbers look like "you" are due a huge refund, which of course gets sent to them not you. The Federal Trade Commission has a very useful article here:

I am a firm believer that now is the time to set a credit freeze, not after your identity is stolen. It is really easy, as Bob wrote, to unfreeze for an hour so you can have whomever needs the access get it.

Posted by:

Jim Swan
26 Feb 2020

These days I see "Know Your Customer" requirements, asking us to send a face picture together with some very important ID document, such as a passport. This trend scares me a lot. Any thoughts on this recent trend?

Posted by:

26 Feb 2020

Best article in a long time.

Bob (and Lucy Post, above) are spot on.

Place a free credit freeze for yourself and your dependents at all 3 credit bureaus. It's straight forward and free. See link below (a legitimate FTC US government site) for easy instructions.

For example, if you are buying a car, the dealer will give you the bureau they use. You call that bureau and ask them to lift freeze for say 72 hours so the car dealer can check your credit. After 72 hours the bureau will automatically reset the freeze.

(Important!!! Make sure you get a "Freeze" and that the bureau does not try to upsell you another service.)

Posted by:

05 Mar 2020

Great article, Bob--one of the most useful for everybody. Thank you for all the phone numbers and web sites if we have to go there!

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