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Identity theft: Everything you need to know

At a glance:

  • What to do if your identity has been stolen

  • How to contact the proper authorities when your identity has been stolen

  • How to clean up your credit after identity theft

  • Summary of identity theft

  • Practical ideas you can start with today

Identity theft is a crime that takes on many insidious forms, leaving a trail that can be hard to pick up on and follow. Despite the high number of victims, many people remain unaware of how to respond to identity theft.

If you believe that you are a victim of identity theft or fear that you may become one—for example, you lost your wallet or gave personal information to a stranger—take the following steps immediately.

What to do if your identity has been stolen

Keep a log

In the event of a crime, you need supporting documentation. Take notes of your correspondences, whether by email, phone, or letter. Include names, dates, and contact information.

Keep track of your hours and your expenses. You may be able to take a tax deduction on expenses related to theft.

Fill out an identity theft affidavit

Fill out affidavits with the FTC and possibly the IRS.

Go to the FTC

The Federal Trade Commission provides an online report at www.identitytheft.gov/. Filling out the form and having it on file at the FTC can help your creditors investigate fraud in your accounts, block it from appearing on your credit report, and prevent companies from collecting debts that are not yours.

Mail it in by certified mail with a return receipt, and take a copy of it to your local police station as part of the police report you should file. While filling out this form will not by itself resolve the theft, it will be one piece that can help your case along. The FTC can refer your complaint to other government agencies or companies.

You can also call the FTC:

FTC's Identity Theft Hotline

1-877-ID-THEFT (438-4338) (toll-free)

TTY: 1-866-653-4261

Or write:

Identity Theft Clearinghouse

Federal Trade Commission

600 Pennsylvania Avenue, NW

Washington, DC 20580

Go to the IRS

ID theft can also spill over into your taxes if your Social Security number has been stolen and someone has been using it to report income that they have no intention of paying tax on.

You might get a letter stating that you filed more than one tax return, that you owe money, or that you received wages from an employer that you did not actually work for. The IRS provides an ID theft affidavit at http://www.irs.gov/pub/irs-pdf/f14039.pdf. You can also contact the IRS at 1-800-908-4490.

Stop payment on checks

For ID theft involving your checks or a checking account, contact your financial institution to report it. Ask them to notify the check verification service that it uses so that it can stop payment on them. It is important that you take these steps as soon as possible, because your liability for unauthorized use of your checking account may be limited, depending on the state you live in.

You can also contact the two major check verification companies directly. To ask that they notify businesses that use their databases not to accept your checks, call TeleCheck at 1-800-710-9898 or 1-800-927-0188, or call Certegy at 1-800-237-3826.

To find out whether the ID thief has been using bad checks in your name, call SCAN at 1-800-262-7771.

If your ATM card has been compromised, cancel it as soon as you can and get a new one with a new PIN.

Dealing with accounts that have been used fraudulently

Close any bank or credit union accounts, credit card accounts, or other accounts that have been affected by identity theft or that have recently been opened in your name.

In the case of any creditors, ask that the closures be reported as "account closed at consumer's request." This type of closure will not reflect negatively on your credit report.

Ask for a fraud dispute form from the companies where you are closing accounts. Send it to the address given out for billing inquiries. If they do not have a fraud dispute form, you can use a sample letter form such as the one provided by the Federal Trade Commission.

Sending in a fraud dispute form along with an identity theft report filed with your local police department will carry greater convincing power with the accounts.

If you've had bank accounts opened fraudulently in your name, call TeleCheck at 1-800-710-9898 or Certegy at 1-800-237-3826. They can flag your account to stop further checks from being written.

Get copies

Request copies of the account application and any transactions that the ID thief perpetrated. Do this in writing, and include an identity theft report, a police report, and proof of your identity. Keep the copies for your records. Also, if there is any identity-theft-related information in your credit report that was provided by businesses, contact the businesses in writing and request that they stop providing it. By law, they are required to stop providing this information after receiving a request from you. The request should be in writing and accompanied by an identity theft report.

A last step

Once the disputes have been resolved, request a letter from each company stating that it has closed the disputed accounts and discharged the fraudulent debts. These letters will come in handy for anyone who claims that you owe money on the accounts.

Debt collectors

Debt collectors may hound you for payment on accounts that thieves opened up in your name. Inform them that you are a victim of ID theft and are therefore not responsible for the bills. Make your notification both in writing and over the phone. In writing, include a copy of a police report. The aim is to convince them beyond doubt that you are telling the truth. The debt collector must then pass this information on to the creditor.

Once you have sent this information in, request information about the debt as well as about the creditor. Ask the debt collector to state in writing that you are not responsible for the debt and that it has been closed. If the debt collector does not cooperate or attempts legal action against you, consider hiring a lawyer to help you.

How to contact the proper authorities when your identity has been stolen

The police

Fill out a police report, and include as many details as you can. Make several copies of the report if you are allowed, because you will need them to support your correspondence with creditors and businesses. If the local police won't help you, file a report with the state police or the state attorney general's office.

If a criminal conviction or arrest shows up on your criminal record fraudulently, you can contact your sheriff or police department and fill out a police report (impersonation report). You can ask them to take your fingerprints and photograph and compare them to those of the impersonator. You can also contact your county's district attorney to clear your name from court records.

The Post Office

Identity theft can involve the mail, too. Thieves can change your address or get your mail forwarded to them. If you suspect this, contact your local post office.

The Social Security Administration

Your Social Security number is your most valuable asset for an identity thief to steal. If you believe it has been stolen and used to get unauthorized government benefits, contact the Social Security Administration's inspector general at http://oig.ssa.gov/ or 1-800-269-0271. Its Website has an online fraud reporting page.

You aren't done there. You should also get a copy of your Social Security Earnings and Benefit Statement. Check it for any reported earnings that are not yours.

The US State Department

Identity thieves steal passports, too. If you believe yours has been stolen, contact the US Department of State at 877-487-2778 or www.travel.state.gov.

Department of Motor Vehicles

Fill out a complaint form if you discover that your driver's license number is being used fraudulently. Ask for a fraud alert to be put on your license, and ask for a new license number.

Federal Trade Commission (FTC)

In addition to filling out an ID theft affidavit with the FTC, you can also fill out a complaint form. Though doing so cannot help you much individually, it can help police locate identity thieves and bring them in. The form can be accessed at www.consumer.gov/idtheft. You can also call the FTC at 877-438-4338.

Investment fraud

Identity thieves can hit investment accounts. If you believe that this has happened to you, you can file a complaint with the Securities and Exchange Commission at www.sec.gov/complaint.shtml. Or you can write to it at SEC Office of Investor Education and Advocacy, 100 F Street, N.E., Washington, DC 20549-5990. You might also contact regulators in your state. A list of them is available here.

Phone fraud

ID thieves may set up phone service in your name and rack up bills. You can contact your phone company and cancel your account and set up a new one. If you are having difficulty working with your phone company, contact your state's Public Utility Commission (for local service issues) and the Federal Communications Commission (for long-distance).

Student loan fraud

Report fraudulent loans that are in your name to both the school/program and the Department of Education. The Department of Education can be reached at 1-800-MIS-USED and here.

How to clean up your credit after identity theft

If your credit cards have been used fraudulently as a result of identity theft, you must contact them to close your accounts. You will also need to contact the three major credit bureaus to have fraud alerts issued on them. The three major credit bureaus are:

Fraud alerts

There are two types of fraud alerts:

Initial alert. An initial alert is good for at least 90 days. You can request one if you are, or think you may be, or think you are about to become, a victim of identity theft. The alert states that you are not authorizing new credit, an additional card on an existing account, or an increased credit limit. Any creditor wishing to extend credit to you must take extra steps to verify your identity.

Extended alert. An extended alert is good for seven years. You can have one placed on your credit report if you are a victim of ID theft and you provide the bureaus with an identity theft report. Potential creditors will need to contact you directly in order to issue you credit. Also, the credit bureaus must remove your name from marketing lists for prescreened credit offers for five years, unless you request that your name be reinstated.

To request one of these or to have it removed, you must furnish proof of your identity.

Both alerts entitle you to a free copy of your credit report from each of the three major bureaus. Examine all of them for accounts that you did not open or that you did not apply for, and delinquencies or defaults that you did not cause. Report anything suspicious or incorrect back to the credit bureaus.

Credit freezes

Another option is the credit freeze, in which you authorize the credit bureaus to restrict access to your credit report. This means that potential creditors and other parties will not be able to see your report. Laws on credit freezes vary from state to state.

Summary of identity theft

Many resources exist online to help you prevent, understand, and respond to identity theft. Two well-known ones are the Identity Theft Resource Center and the Federal Trade Commission's identity theft site. The FBI works with one at http://www.ic3.gov/default.aspx.

Practical ideas you can start with today

  • File a police report and fill out an ID theft affidavit and claim with the Federal Trade Commission.

  • Notify all my financial institutions and close any accounts that have been accessed fraudulently.

  • Access my credit report every year from www.annualcreditreport.com.

  • Contact the local postal inspector to ensure that mail addressed to me is not being sent elsewhere.

  • Contact the Social Security Administration to determine if my Social Security number has been used to get benefits fraudulently.

  • Send debt collectors written disputes of any fraudulent credit activity, along with copies of my police report and ID affidavit.

This content was created in partnership with the Financial Fitness Group, a leading e-learning provider of FINRA compliant financial wellness solutions that help improve financial literacy.

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