There is nothing more violating than having your identity stolen. Identity theft costs money, tarnishes your reputation and puts a strain on your peace of mind. There are a plethora of tips on how to avoid identity theft, but what if it has already happened? What if your bank account contains unauthorized charges, withdrawals or even overdrafts? The road to financial recovery can be a rough one, but the sooner you act, the better. Here are some useful tips for mitigating the damages of a stolen identity.
Report Lost Credit, Debit or ATM Cards Immediately
If you have lost or misplaced a card, close or freeze the associated account. This step can help you both avoid identity theft and put a stop to occurring or future damage. Next, gather your credit and debit statements and search through the transactions with a fine-tooth comb. Verify that the transactions are indeed yours. If they are not, report the unauthorized charges to the card issuer. The Fair Credit Billing Act and the Electronic Fund Transfer Act protect you from unauthorized charges if you act quickly. You are only liable for up to $50 per card if you report the loss within two business days.
Contact a Credit Reporting Company
Contact one of the three credit reporting agencies and place a fraud alert on your credit report. A fraud alert makes it very difficult for a thief to open more accounts under your name because it forces an extra identity verification before credit is issued. Placing a fraud alert is free, lasts 90 days and covers all three credit reporting agencies. It’s important to document everything at this point, including the people you’ve spoken with and the actions you’ve taken. This chronicled timeline of events will help in the process of repairing your credit.
Consider a Credit Freeze
Along with extending a fraud alert beyond 90 days, you can also place a freeze on your personal credit file. A credit freeze stops all new access to your credit report but does not necessarily prevent existing entities from accessing your information. If you need to allow future access to your credit report, such as when you’re applying for a new job or obtaining a mortgage, you’ll have to manually lift the freeze. Unlike your first fraud alert, this process is not always free and requires a greater degree of maintenance.
Create an Identity Theft Report
Repairing the damages to your credit can be a long and arduous process. It involves disputing all of those bad transactions with credit reporting agencies and businesses you have accounts with. Take all of the information you’ve gathered over the process, including that timeline of events, and compile it into an Identity Theft Report. This report will help you remove fraudulent information from your credit file, stop the debt collection agencies from unfairly collecting from you, and facilitate access to all of your abused accounts.
The best combative strategy against identity theft is a good defensive strategy: Protect your identity like you would protect your reputation. Keep your information on a need-to-know basis, shred documents you don’t keep, and always be aware of your surroundings. For an in-depth guide on identity protection, check out Identity 101. And remember, take an active role in your financial wellbeing by checking your credit report at least once per year.
If so, subscribe now for tips on home, money, and life delivered straight to your inbox.