What To Do If Your Identity Is Stolen: 8 Steps

No one wants to have their identity stolen, but this unfortunately happens to millions of Americans every year. According to a study done by Javelin Strategy & Research, 15 million people experienced identity theft in 2021 alone.

If any of your personal identifiable information gets into the wrong hands, you should take action immediately. The road ahead may be difficult, but with a well-designed plan, you can get your identity and life back.

How Do People Steal Your Identity?

Before we consider what you need to do after you’ve become a victim of identity theft, let’s start by looking at a few of the common tactics used to steal identity.

Data Breaches

It seems like every month a new corporation reports that part of its database was compromised. A data breach, also called a database hack or data leak, is a cyber attack where cyber criminals gain access to protected or confidential information through a computer system or network. The stolen data usually includes usernames, passwords, email addresses and credit card or banking information.

Data breaches are becoming increasingly common and cost U.S. businesses millions of dollars in damages every year. These security incidents also put consumers at risk of identity theft.

Computer Malware

It’s important to always be smart when using your personal computer. Cyber criminals are very intelligent when using malware to steal information. Make sure you never open email attachments or click links from people you don’t know. These are often the access points for criminals to place malicious software on your computer and gain unauthorized access to your personal information.

Mail Theft

Have you ever been waiting for a W-2, only for it to never arrive? Mail theft is one of the most common forms of identity theft. If criminals get ahold of your tax documents, medical bills or other information through the mail, they can uncover your employer name, Social Security number, health insurance member number and more.

They can also gain access to your credit card statements in the mail, and these frequently include a card number.

How To Check If Someone Is Using Your Identity

One of the best ways to protect your identity and make sure people aren’t using your information is to regularly check your credit report. Do you see a credit card account that doesn’t belong? Maybe a personal loan you never applied for or a purchase you didn’t make?

Here are a few other telltale signs you might have been a victim of identity theft:

• Fraudulent charges appear on your credit card or bank statement
• You’re declined for a credit account even though you have excellent credit
• Your credit score suddenly drops for seemingly no reason 
• You receive a message that your personal information was part of a data breach
• You get a bill for something you didn’t order
• You’re not receiving sensitive pieces of mail like bills or checks

What To Do When Your Identity Is Stolen: 8 Steps To Take 

So where are you supposed to start if your Social Security number or identity is stolen? Here are eight steps to prevent and protect yourself from identity theft.

1. Add Fraud Alerts To The Three Major Credit Bureaus

The first step to take to prevent identity theft is to add fraud alerts to the three credit bureaus – Experian™, Equifax^® and TransUnion^®. Typically, you can file the alert with one credit bureau and they will then alert the other two in the event of fraudulent or suspicious activity.

If someone attempts to apply for a loan or get a credit card using your information, the credit bureaus will inform the lender or card issuer that additional security measures need to be put in place. This allows them to confirm the applicant's identity.

Fraud alerts are typically free to place on your account. Plus, if you’ve been a victim of identity theft, the alert can be added for up to 7 years. You’ll also be allowed to receive two free credit reports from all three credit bureaus each year. Look through each of the reports closely to make sure no new accounts have been opened.

2. Freeze Your Credit Reports

Once you’ve placed fraud alerts with the three credit bureaus, you’ll need to freeze your credit reports and bank accounts so creditors can’t access your credit report without your permission. If someone tries to open a new account using your information, it will be declined since the new creditor won’t be able to evaluate your credit profile.

Once you freeze your accounts, it will become more difficult to apply for new credit accounts yourself, so you’ll typically need to ask to temporarily unfreeze your account in order for a decision to be made.

3. Contact The Necessary Organizations

You’ll need to get in touch with the company through which the identity theft occurred. Chances are, they’ve dealt with cases of identity theft before. You’ll also want to contact your credit card issuer or bank to let them know about the incident. Once you do this, they will freeze or close your accounts.

4. File A Police Report

Because identity theft is fraud, you should always file a police report. This will offer support if and when you receive any future collection calls about accounts opened illegally in your name. Plus, filing a report provides a physical record of the incident and leaves a paper trail if your Social Security number or identity is stolen again in the future. 

5. Contact The Federal Trade Commission

In addition to filing a report with your local police department, you’ll want to contact the Federal Trade Commission (FTC). The FTC provides a number of resources to help victims of identity theft learn what identity theft is, how to report instances of stolen identity and how to set up a step-by-step recovery plan.

You can also file your identity theft affidavit online. Both the police report and the identity theft affidavit will make up your identity theft report. Once this report has been created, the FTC will help you through the next steps.

6. Contact The Social Security Administration And IRS

What do you do if your Social Security number is stolen? If you believe your Social Security number might have been compromised as part of the identity theft, contact both the Social Security Administration and the Internal Revenue Service (IRS). If your Social Security number falls into the wrong hands, criminals could attempt to collect future tax returns or apply for health insurance coverage in your name. 

7. Close Accounts That Were Opened In Your Name

Once you’ve taken most of the important steps to alert the appropriate agencies about the identity theft that took place, now it’s time to start cleaning up. After you’ve had a chance to go through your credit report, call the fraud departments and close any accounts that were not opened by you.

8. Remove Unauthorized Charges From Each Account

In addition to closing accounts that were set up in your name, it’s important to address each individual charge posted on your credit card or bank accounts. Let the company know you were a victim of identity theft and want to remove fraudulent charges from your account.

Once you’ve notified the company and asked to have the charges removed, you can ask the company to send you a letter stating that the charges were removed. This letter might be helpful to have if the charges show up on your credit report in the future. Oftentimes, businesses will need you to send them a copy of the identity theft report you received from the FTC.

What Are You Liable For If Your Identity Is Stolen?

If you’re a victim of identity theft, the law is on your side. In most states, you’re not liable for any debt that occurred as a result of fraudulent accounts being opened. Plus, under federal law, you are only liable for the first $50 in fraudulent charges on your credit card if someone uses your card to make a purchase.

The laws are slightly less in your favor if your debit card is involved. If you report the theft pretty much immediately and before any transactions are made, you’re responsible for $0. However, if you file a report with your bank within 2 business days, you’re liable for as much as $50.

If you file between 2 business days and no more than 60 days of receiving a bank statement that lists the fraudulent activity, you’re liable for up to $500. And if it’s been more than 60 days since your bank statement listing the unauthorized withdrawals was mailed, your liability is potentially unlimited.

How To Prevent Identity Theft

To lower the risk of your identity being stolen, protect yourself and your personal information. Here are some tips to prevent a stolen identity:

• Don’t share your bank account or credit card number, Social Security number, date of birth or other personal information unless absolutely necessary.
• Don’t carry around a physical copy of your Social Security number. Store the card in a secure place (like a safe).  
• Keep an eye on your mail, including bills, credit card statements and medical information.
• Install cybersecurity software on your computer.
• Review credit reports, credit card statements and bank statements regularly. 
• Shred outdated documents, including old credit cards, bank account information and tax forms.

For more information about identity theft protection, visit USA.gov.

The Bottom Line

No one wants to deal with the aftermath of a stolen identity. However, by understanding the steps you’ll need to take if your identity is stolen, you’ll be able to recover your identity and regain peace of mind much quicker. Because many identity thefts happen when thieves steal your financial information like a bank number or credit card number, it’s important to closely monitor all charges to your accounts.

The Rocket Money℠ app can help you connect all of your banking and credit accounts in one place. If you identify any unauthorized transactions, you can act immediately and prevent any potentially fraudulent behavior.

Download the Rocket Money app to take control of your finances today.