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What is Identity Theft and What to Do if Your Identity is Stolen

The thought of sending out your personal information over the internet may not seem like a particularly noteworthy thing these days. After all, you may already be used to using your credit card to buy things online, signing up for subscription services, or applying for things with your personal information for any number of reasons. But as familiar as it might feel, there’s always some level of risk when you send this information out into the world. And if it manages to end up in the wrong hands, the consequences can be severe.

The action of stealing someone’s personal information is known as identity theft, and it’s no joke. If you end up in a situation where this information has been compromised, you’re going to need to take immediate action. In this article, we’re going to dive a little deeper into what identity theft is, how to report identity theft, and what to do when your identity is stolen.

What is Identity Theft?

Before we get into the steps you can take to mitigate the damage when your identity is stolen, we should talk about what identity theft is in a little more detail. Generally speaking, when your identity is stolen, it means that someone is trying to use some of your personal information without your permission for financial gain. They might do this by applying for a loan, opening up new credit card accounts, renting property in your name, and more. They may even be able to access your bank accounts to siphon money out of them.

person on a laptop committing identity theft.

The tricky thing here is that this may be happening under your nose without you even realizing it. If damage is done to your financial profile and you’re not paying close attention, you may not even see what’s going on until you get a look at your credit report, are notified by a financial institution that a new credit account is being opened up in your name, or when you’re contacted by a debt collector.

Common Warning Signs of Identity Theft

In order to combat identity theft, you’re going to need to look out for the warning signs. While there are many, here are some common ones for you to keep an eye on:

  • Line of credit or loan statements for accounts you don’t remember opening
  • Getting denied for a credit account that you never applied for
  • Notifications about purchases you never made
  • Unrecognizable items on your bank statements
  • Inaccurate, unrecognizable, or faulty information found on your credit reports

Generally speaking, the key is to pay close attention to your financial profile and keep an eye out for anything that looks fishy.

What to do When Your Identity is Stolen

While it’s never something you want to deal with, if you share your personal information online, there may be a chance that it gets stolen. The good news is that there are steps you can take to right the ship. Just remember to act fast to minimize the damage.

1. Review and Identify Compromised Accounts

Like we said, one of the most important things for you to do is to keep a close eye on your finances. If you do feel like something nefarious is going on, the first step you should take is to thoroughly review any activity that’s been going on in every financial account you have. Look at all of your bank accounts, loan accounts, credit card statements, and anything else that could have potentially been tampered with. Check to see if you can spot any new accounts, see if you’ve missed some payments for bills that are usually paid automatically, or check to see if you’ve even defaulted on any accounts.

Once you’ve looked through all of your financial accounts, zero in on those that you feel might have been compromised. Make a list of all of these accounts, and then move on to the next step on this list.

2. Contact a Major Credit Bureau

Now that you’re more certain that your identity has been compromised and you have a better idea of what specific accounts have been targeted, your next move should be to stop the bleeding. This means you’ll need to know how to report identity theft.

Start by contacting one of the three major credit bureaus – Experian, Equifax, or TransUnion – in order to have a fraud alert put on your credit report. Once you contact one of these organizations, they’ll contact the other two for you.

Call center agent helping someone deal with identity theft.

The alerts that are placed on your reports will be in place for one year[1]. This means that every time an inquiry is made into your credit, like when a request for a new credit card or loan is made, your identity will need to be verified. This makes the process of opening a new credit account more intensive, and makes it even harder for a scammer to commit identity theft.

If you want to take a more extreme measure against fraudsters, you can also put a credit freeze on your accounts. This will stop a lender or financial institution from being able to access your credit report which means that you (or anyone else) won’t be able to open any new accounts in your name. To do this, you’ll need to reach out to each individual credit bureau and request that they freeze your credit.

3. Shut Down Your Fraudulent Accounts

On top of contacting the credit bureaus, you’ll also want to reach out to the financial institutions that you have the accounts with. For example, if you’ve noticed some suspicious activity on your credit card, you’ll want to contact your credit card company and close or freeze that account. They’ll likely offer to open a new credit card account for you. Just remember that when you notice any sort of suspicious activity, report it right away. While different credit card issuers may have different policies, you generally won’t be on the hook for the fraudulent activity.

The same general principles apply to any new accounts that are opened in your name. Get in touch with these organizations right away and close these accounts immediately. The quicker you act, the less damage is done.

4. Report the Fraudulent Activity to the Authorities

In addition to reporting this activity to a major credit bureau and the financial institutions you have accounts with, you’ll also need to report it to the Federal Trade Commission (FTC). Fortunately, they have an easy-to-use portal just for this purpose that you can access by going to[2]. From there, you can submit the necessary information to inform the FTC of what’s going on. They’ll then walk you through creating an identity theft report and guide you through a path to recovery as well as direct you to the forms you’ll need to continue on in the process.

The reporting doesn’t stop there. Identity theft is a serious crime, so while it’s important that you do what’s necessary to limit any damage that’s done to your financial standing, it’s also important for you to report this crime to the police. Once you have the identity theft report that was created for you in hand, bring this along with any documentation that has all the fraudulent activity done in your name listed to the local authorities. They’ll then create a police report which you should ask for a copy of. This may be able to help you in the next step.

5. Dispute the Fraudulent Charges

At this point, you’ve reported the fraudulent behavior that’s been done in your name to all the necessary people, and you’ve done what you can to limit the damage. The next thing to do is to dispute this activity to try to get off the hook for any purchases that were made in your name, or any overall damage that’s been done to your financial profile. This process may be different depending on the financial institution that the disputed activity is with. Different organizations have different ways of dealing with identity theft, so you’ll want to get in touch with them and see what their particular process is.

Agent helping someone deal with identity theft.

Generally speaking, you’ll likely need to put together every piece of information you have on the suspicious activity, figure out what the fraud protocol is with the necessary financial institution, and get a better idea from them as to when they’ll be able to fix the problem. For example, let’s say someone has gotten into your checking account and taken money from it. You’ll want to make sure that you’ll be able to get this money back and you’ll also want to get clarity on when this will happen. When a financial institution does give you this information, make sure you keep a clear (and written) record of everything they say. This can be useful if you continue to see fraudulent activity in your accounts.

Stay Vigilant to Limit the Damage of Identity Theft

The thought of your identity being stolen is a scary one. A fraudster can do a lot of damage if they get a hold of your personal information, but that doesn’t mean that you need to sit and wait till the damage is done! If you stay vigilant, report any suspicious behavior right away, and take the necessary steps, you may be able to seriously limit the damage that identity theft can do to your overall financial standing.





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