You have just been denied a loan for a new home because of your credit, which surprises you because you’ve always kept on top of your finances. That’s when it hits you: You’re one of millions of Americans each year whose identity is stolen.
“Most people are going to find out that they have been victims of identity theft at the most inconvenient times,” says Eva Velasquez, president and CEO of the nonprofit Identity Theft Resource Center (ITRC).
Usually, the news comes as part of a background check for a potential job or new apartment. As a result of running that check, people are denied credit due to potentially negative information found in their credit report.
Velasquez’s top advice for identity theft victims: “Don’t panic, but do react.”
After recovering from the initial shock of your identity being stolen, Velasquez recommends taking these five steps to mitigate the damage:
1. Contact any financial institutions or companies where you know identity theft has occurred.
All credit card companies have identity theft departments, and the FTC suggests calling those departments to report that your identity has been compromised. The companies you contact should then close or freeze the accounts for you so no one can add new charges without your permission.
2. Put a fraud alert on your credit reports with the three major credit reporting agencies.
Once you contact one major credit reporting agency (CRA) and explain that you’re a victim of identity theft, that agency is required to alert the other two. According to the FTC, an initial ID theft alert can make it harder for an identity thief to open additional accounts in your name.
3. File a police report with your local law enforcement agency.
According to the FDIC, which insures many of the nation’s consumer bank accounts, reporting identity theft in a timely fashion may improve the chances of recovering what you’ve lost and allows the authorities to take appropriate action. Although it’s also important to report the issue to federal authorities, local law enforcement agencies may be able to provide the most direct advice and assistance.
4. Fill out an ID Theft Affidavit with the FTC.
The FTC accepts reports in three ways: on its website at www.ftc.gov, by telephone at 1-877-IDTHEFT, or by mail to Consumer Response Center, FTC, 600 Pennsylvania Ave, NW, Washington, DC, 20580. All ID Theft related complaints sent to the FTC are entered into Consumer Sentinel, a secure online database that law enforcement agencies nationwide and overseas can search.
5. Start monitoring all your accounts.
If you’ve been a victim of identity theft, you should be checking your credit reports regularly. You can obtain one free copy of your credit report each year from all three major CRAs at annualcreditreport.com. The U.S. Department of Justice also suggests carefully checking monthly credit statements for any suspicious or false charges.
“Of course, the sooner you find out about the problem, the less time has lapsed in which the thief can use your identity,” Velasquez says. “The longer the individual’s personal information is used unnoticed, the more damage is done and the longer it may take to clean up.”
Once you’ve taken these initial steps, you can begin to turn the focus to any long-term steps to repair your good name.
“When you are a victim of identity theft, there is most often not an overnight solution,” Velasquez says. “So act quickly, take good notes, and stay organized. Make sure to take care of yourself emotionally, as identity theft has many [effects] on victims more far-reaching than the most widely known financial impact.”
Megan Craig is a Chicago-based journalist and communications professional who writes mostly about personal finance and consumer issues. She is a former reporter and editor for the Chicago Tribune. Follow her on Twitter @megcraig1.
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