By Mark Lamoriello, AIF® | President, Chief Investment Officer | 7.06.2017
It’s a nightmare none of us even want to imagine, but it happens more and more – identity theft. In 2016, more than 15 million Americans were victimized by identity theft.
If you’re a victim of ID theft, you need to take action as quickly as possible to limit the damage. As soon as you realize what has happened, here are the steps to take:
1. Notify the Financial Institution
If you notice a fraudulent transaction on your bank or credit card statement, the first thing to do is call the affected financial institution. Point out the transaction and then work with the institution to close the account and open a new one.
With credit cards, the Fair Credit Billing Act limits your liability for fraudulent purchases to $50, although many creditors have $0 fraud liability policies.
With purchases and withdrawals using a debit card, ATM, or electronic transfer from a bank account, things are different. According to the Electronic Fund Transfer Act, you have a $50 liability limit when you let the bank know within two business days after discovering the fraud. Your liability rises to $500 liability after two business days. However, if you wait 60 days, there is unlimited liability on your part.
The faster you contact the financial institution, the quicker you can get things taken care of – and reduce the risk that you get stuck with the bill.
2. Ask for a Fraud Alert on Your Credit Report
You can contact any one of the three major credit reporting agencies and ask for them to put a fraud alert on your credit report. Once the alert is on one report, it will be added to the other reports. This alert lets the reporting agencies and others know that your credit has been compromised. A fraud alert lasts 90 days. However, you can extend it later, after you’ve contacted law enforcement.
3. Contact Law Enforcement
After you notified your financial institution and taken care of the fraud alert, contact the Federal trade Commission (FTC). Fill out an ID theft complaint affidavit form and print it out for your records. The FTC monitors ID theft cases to look for patterns and to try to identify large rings.
You should also file a police report with your local law enforcement officers. Unfortunately, it is hard to catch ID thieves, and your local police might not make headway in your case. However, having a police report can help you move forward to have fraudulent accounts removed from your name and credit report. It can also provide you with what you need in order to have charges removed from your accounts if your financial institution is slow to respond.
Bring your ID theft complaint affidavit and make sure your police report number is added to the form, along with a signature from the police contact handling your case.
4. Send Your ID Theft Report to Creditors
If your identity has been stolen and used to open fraudulent accounts in your name, sending a copy of the ID theft report to the creditors should get them to close the accounts and stop reporting them to the credit bureaus.
You can also send copies to the credit bureaus. At this point, if you want a fraud alert to appear on your credit report for seven years, instead of being removed after 90 days, you can request this. That way, new accounts in your name will be harder to open.
Realize, though, that this could mean extra verification when you move to open a new credit account. If you’ve been a victim of ID theft, though, it might be worth it to go through the extra steps, knowing that it can stop another fraudster from opening accounts in your name.
5. Change Personal Information
Change the passwords associated with the affected accounts. It also makes sense to change your other passwords, just in case the ID thieves have information about other accounts you have. Create secure passwords that follow best practices.
You might also need a new driver’s license. Follow up to find out what kinds of accounts were opened using your information, and find out what identification was used. If a fraudster used your driver’s license to apply for a new line of credit, you should talk to your local DMV about getting a new driver’s license.
6. Other Places to Contact
You might need to contact other agencies to report your ID theft. If your Social Security number is at risk, contact the Office of the Inspector General at the Social Security Administration.
It might also make sense to contact your utility companies, just in case a fraudster tries to use a utility bill as proof of residence.
7. Update Your Saved Information
Once you have new credit card information or bank account information, you need to update your saved information. If you have auto pay for utilities, insurance, or other items, you need to make updates so you don’t miss your payments – and perhaps lose some of your services.
8. Consider a Credit Freeze
Consider whether or not it makes sense for you to request a credit freeze. You have to pay for a credit freeze on each bureau’s report in some cases. However, if you can prove you’re a victim of ID theft, it’s usually free to have your credit frozen.
With a credit freeze, your credit information is locked down. It means no one can open an account in your name, including you. If you want to ensure that no new accounts are opened in your name, a credit freeze is the way to go. But it also means you won’t be able to get new credit, so use this strategy carefully.
9. Remain Vigilant
It’s especially important to remain vigilant after you’ve been a victim of ID theft. Check your accounts regularly, and review your credit report. Make sure reported fraudulent accounts have been removed from your credit report, and double-check for new signs of fraud every few months. Don’t forget to review your account statements carefully and monitor accounts online.
You can recover from ID theft, but it takes some legwork on your part, and a willingness to watch your accounts in the future..
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If you still have questions or concerns regarding this topic, reach out to our retirement plan team experts—we would be happy to help.