Identity Theft Protection: What to Do Now
By the time Lynda Rodriguez saw her BMW's smashed front window and realized her purse was gone, thieves had already rung up $4,000 in charges not far from her Scottsdale, Ariz. home. Though Rodriguez, 47, acted quickly to shut down her credit card and bank accounts, her purse's contents — including her pay stubs, checkbook, driver's license, and medical ID as well as assorted credit cards — still held a potential bonanza for anyone intent on identity theft. That's because personal information can be sold and traded among criminals for years after it's stolen, making identity theft the crime that keeps on taking.
Rodriguez, who works in commercial real estate, learned that lesson last June, two years after the break in. That’s when she discovered the reason she hadn’t received her American Express bill: Someone had called AmEx to get the address changed and order a new card. The crook used the new card to charge $4,500 at the Bellagio in Las Vegas. In a Kafkaesque twist, Rodriguez says AmEx refused to provide her with the forwarding address the thieves used, claiming a “right to privacy” issue ... for the thieves.
As Rodriguez found out, identity fraud is booming, due in part to the tough economic times. There were 9.9 million victims in 2008 (the most recent figures available), up 22 percent from 2007, according to estimates by Javelin Strategy & Research, a financial-services consulting firm. Javelin president James Van Dyke predicts the numbers will stay high “until more people are fully employed and economic pressures lessen.” Because identity thieves come out in droves during the holiday season, as MoneyWatch blogger Kathy Kristof points out, you may have recently been victimized without even realizing it yet.
What exactly should you do if your identity does get stolen? You may be surprised. In general, you’ll need to multitask at warp speed to minimize the damage to your accounts and to prevent new accounts from being opened in your name. As you contact authorities and financial institutions, keep a detailed log of each conversation. Then confirm what was said in writing by sending a copy of your notes by certified mail, return receipt requested. That way, if your contact leaves or fails to follow up, you’ll have a record.
Here’s a step-by-step guide to follow in case you do become an identity theft victim:
1. Put a Fraud Alert on Your Credit Reports
This is your very first step, even before you call the police, since credit bureaus are better able to shut down new attempts at fraud. Call the three major credit reporting firms (TransUnion, 800-680-7289; Experian, 888-397-3742; Equifax, 888-766-0008) and ask for the alert, requiring merchants to get your approval before granting new credit in your name. “You want to do anything you can to put up a barrier to new false credit being issued,” says Mari J. Frank, an attorney and author of the forthcoming The Complete Idiot’s Guide to Recovering from Identity Theft. Though in theory, you need to tell only one bureau to place an alert — that one is supposed to pass the word to the others — Frank recommends contacting all three to be sure the job gets done.
Fraud alerts normally can be renewed after they expire every 90 days, but once you’ve established you’re an ID theft victim, you can ask the bureaus for an extended alert lasting seven years.
2. Order Your Credit Reports
Once you get the fraud alert, you’re entitled to one free copy of your credit report from each credit bureau. Order these and scour the reports for unauthorized charges. Pay special attention to the “Inquiries” section, which lists businesses that obtained your report for the purposes of issuing you credit. “If you see a Kohl’s on there and you haven’t applied for an account, that’s an early indication someone used your name to open an account,” says Frank. If you spot charges you didn’t make, tell the credit bureaus and your credit issuers in writing and request the bureaus remove all the fraudulently-initiated inquiries.
3. Report the Crime
File a report with the fraud or economic crime unit of your police department. It helps convince lenders and credit bureaus to take you seriously. (You may be told to also contact law enforcement in the city where the fraud occurred.) Be persistent if you encounter resistance: Overburdened police departments may not want to take a crime report, because it requires an investigation. But “your local law officials have a duty to provide you with at least an informational report under most state laws,” says Frank.
If you have trouble getting a report, you may be able to obtain one from a state or federal law enforcement agency or the U.S. Postal Inspector, if the crime involved fraudulent use of the mail. The Federal Trade Commission has details.
4. Fill Out an Identity Theft Form
The Federal Trade Commission has developed an identity theft affidavit that you can send businesses and creditors when a new account is opened in your name, to help document that a thief used your personal information to open the account. “It’s a kind of summary of what’s happened to you,” says Frank.
5. Notify Banks, Creditors, and Utilities
Ask to speak to someone in the security or fraud department to close all accounts a thief used. You can find the phone numbers on the back of your credit card and account statements. If you don’t have recent statements, Credit.com lists the ID theft contact info for many financial institutions.
Follow up by closing the accounts in writing, sending along copies of your police report, if you have one, and the FTC affidavit. The FTC and the Privacy Rights Clearinghouse have useful sample letters to help you document the fraud. Get new account numbers, PINs, and passwords for each account. If you have any recurring bills paid automatically out of your bank account, make sure you give merchants any new information they need.
6. Consider a Credit Freeze
If someone is still able to open fraudulent accounts more than a month after you’ve reported your identity theft, you may want to ask credit bureaus for a credit freeze. This drastic action prevents credit card issuers and lenders from looking at your credit report, which means they won’t grant new credit in your name while the freeze is in effect. (Because it can take several days to lift a freeze, you’ll need to plan ahead if you want to apply for a new card or loan once the freeze is in effect.) In most states, security freezes are available at no charge to identity theft victims. You can request a freeze online or in writing.
7. Keep Ordering Your Annual Credit Report
Since credit issuers aren’t always diligent about observing fraud alerts, you need to monitor your credit reports consistently to see if fraudulent accounts are opened in your name. You’re entitled to one free report each year from each of the three bureaus, in addition to the free reports you’re allowed when you place fraud alerts on your credit files. So a few months after getting your free credit reports from the fraud alert, order the free reports all consumers are entitled to receive through annualcreditreport.com; 877-322-8228. If you find a problem on the reports, contact the lender or credit issuer who provided the inaccurate data and make sure the firm has all the necessary documentation of the fraud.
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