You should be checking your credit every few months, preferably through AnnualCreditReport.com which is setup so the big three credit reporting bureaus (Equifax, Transunion, Experian) can easily comply with their Fair and Accurate Credit Transactions Act (FACTA) requirements. You only get one freebie a year normally but you are entitled to another free one if you are denied credit, file a dispute, are an ID theft victim, plan on looking for employment shortly while unemployed or if you are on public assistance. In short, even though the government only mandates one free report a year, in practice, you will probably be able to access it multiple times for free.
Credit Karma and Credit Sesame also offer all of the information in your credit report for free, along with your credit score. They also show you what kind of credit cards or loans you might qualify for depending on your credit. It’s handy to have an account at these places specifically so you can see what’s on your reports outside of your annual free report.
One of the very first things you should do when you find out that you have been a victim of identity theft is to put a freeze on your credit reports. Many people only find out they’ve had their ID stolen when they go to apply for a loan or a credit card only to have it come back as denied. If it’s totally unexpected, you’ll usually ask why and be shocked when you’re told it was from a string of payday loans 6 months ago, or a second mortgage you never took out.
A credit report freeze effectively stops anyone else from pulling your credit report. You will still be able to pull it with a special PIN that you’ll be given, but other lenders (or the person who stole your identity) will not. This should stop any more damage from being done. Here is where you need to go to place the credit freezes:
You can also have a security alert put on your credit file. This is basically a notation that tells lenders that they need to contact you or put additional verification measures into place before issuing any lines of credit to you or someone who may have stolen your identity. These last for 90 days and are available if you think you might be the victim of identity theft. In order to keep it on past 90 days and have lenders contact you, you need to obtain a police report.
After placing a freeze on your credit reports, you should go over them to see what exactly was done. It should be pretty obvious what you did and did not open, but go ahead and print out paper copies and clearly mark what isn’t yours.
In the case of identity theft via your credit or debit card, pull your online account statements and start looking at charges you didn’t make. Just as with your credit reports, print out a copy and mark the charges that are not yours.
Once your credit is locked and you know what has been done there is a good chance you’ve prevented any new accounts from opening. That doesn’t mean more damage can’t occur, just that you’ve discovered the problem and are taking steps to fix it.
Filing a Police Report
Anything that isn’t yours on your credit reports will require a police report to take care of, while some credit/debit transactions will need one as well. Just to be safe, fill out the sworn ID theft affidavit the FTC uses as a general form to help law enforcement in their investigations. The form is long and it does take awhile to fill out but it’s important that you are thorough with it. In bigger towns, a detective will be the one handling your ID theft case and it’s likely that they will have a lot on their plate. Filling out the form completely makes their job of writing the report easier, letting them get it back to you as soon as they can. You’ll need the police report to start cleaning up your credit.
A Notice on Family Members A common theme here on r/personalfinance involves someone close to the submitter having stolen their identity or even just a parent opening up lines of credit in a child’s name. In cases like these, it is important that you know the person who opened these accounts will get in big trouble. Most of the time, it isn’t a slap on the wrist, they might be looking at prison time, probation or at the very least a criminal record that could include a possible felony. Even a misdemeanor conviction for identity theft or fraud will be enough to keep that person out of many lines of work.
Law enforcement and criminal prosecutors don’t get the chance to go after most identity thieves because they operate outside of their jurisdiction and many times, outside the country. Conviction rates are high for the people who are charged because there is usually a lot of proof that they did it. I would personally have no qualms sending a random person stealing my mail and opening lines of credit in my name to jail, but the situation would be quite a bit different if it were my mother or father who opened a cell phone bill in my name.
Creditors who are owed a lot of money will almost always require the police report in order to let you off the hook for the charges.Telling them your mother did it in your name, but you don’t want to press charges against her, will not work with them. Those companies will also usually work with law enforcement or prosecutors to make sure the person is punished.
I just added this here as a special word of warning that if it was someone close to you who did it, turning them in is going to sour your relationship with them (if it wasn’t already sour). It’s your choice whether you do it or not, just be prepared to live with the after-effects if you know your identity thief.
Disputing Accounts You Didn’t Open
With a scanned copy of your police report and affidavit in hand, you need to start disputing the accounts on your credit report that you did not open. Depending on how severe the theft was, there might be a lot of accounts to dispute. Doing it online, select the reason “Identity Theft” when it asks you why you are disputing and upload the police report and affidavit in the area for supporting documentation.
Since you’re including extra information, the credit reporting bureaus have 45 days to contact the creditors to start their investigations. For many creditors, especially if the money owed isn’t an extreme amount, the police report and affidavit will be enough for them to voluntarily close the account and remove it from your credit report. If you’re lucky, all of the accounts will be removed and will not be sold to a collection agency.
For accounts that come back as verified, you can start by calling the creditors and explaining what has happened. This is likely what you will have to do if the ID thief did something major like purchase a vehicle or open up a mortgage/HELOC. Every reputable lender will have a process you have to go through if you’re a victim of identity theft, sometimes it will take months, other companies it might only take a couple of weeks. They don’t want people who legitimately took out a 2nd mortgage for $60,000 to decide they don’t want to pay it back and cry wolf about identity theft. They may go as far as to pull security camera footage, computer logs, IP addresses, etc. to corroborate your story. In extreme cases, they may try to put a lien on your home if you are a homeowner. In these cases, you might need to talk to a lawyer because they clearly aren’t buying the fact that you are a victim of identity theft.
In serious or repeated cases, you may need to look into changing your social security number. The SSA doesn’t like to do this but they do realize that for some people, the cause of their identity theft problems may be someone specifically using somebody else’s social security number. If you have your ID stolen one time and the damage isn’t too severe, you likely will not be able to replace your SSN.
You aren’t responsible for the information security of retailers or others who might have your personal information, but you are responsible for your own computer, smartphone, tablet, online accounts, etc. Download a popular and proven anti-virus program, such as Avast!, to keep yourself protected and clean out any current malware that may have lead to your identity being stolen.
IRS Reporting – Identity thieves might try to claim your tax return, file the IRS Identity Theft affidavit with the IRS if you believe your social security number has been compromised.
Social Security Cards – Don’t carry around your social security card, memorize it and keep it in a safe place at home. If you lose your wallet or purse you’re going to be busy enough canceling credit cards and getting a new license, you don’t want to add the much larger headache of your credit being in danger.
Craigslist Scams – Don’t send your SSN to a “real estate agent” in order to approve an application for a rental. In fact, don’t give anything to them outside of either their (clearly marked) office, or the property you want to rent. If they ask to meet at Starbucks for you to either give them money or information, report them.