Thieves who assume your identity work quickly to drain your bank and investment accounts and borrow money in your name. By the time you discover the theft — which can take months or even years — you might have lost hundreds, even thousands of dollars, and you may spend months or years untangling the web of mischief the thieves created. Until you clean up the mess, your credit report is likely to be in tatters, cashiers may treat you like a thief, and you will make dozens of phone calls in an attempt to straighten things out.
In spite of your best efforts, you may still become a victim. Therefore, prevention is not enough. You must also vigilantly monitor the following:
Bank and credit card accounts
By the time you learn that you’ve bounced a check, or are informed that your credit card limit has been exceeded, the damage is already done. Unfortunately, most financial institutions use U.S. mail to notify you; few phone or e-mail you. This delay can make the problem worse.
To protect yourself, minimize the number of bank and credit card accounts you hold, and check the balances regularly. Most allow you to do this through automated telephone menus or the Internet.
Know your billing and statement cycles. Bank, investment, and credit card statements that fail to arrive on time might have been stolen. Thieves could have raided your mailbox, found an old statement in your trash, or gleaned information from your check or credit card number when you used it in a store or restaurant. However they got it, they sometimes use the data to submit a fraudulent change of address form with the institution. They might create fake checks on their computers, or they might shop with a fake card that carries your number. So, if your mail is late, investigate.
Your credit report
Ideally, you’d look at it weekly to see if any accounts have been opened in your name without your knowledge, or if any of your legitimate accounts show unauthorized activity. Weekly is ideal because someone who steals your identity will cause extensive damage during the first week to ten days. But let’s get real — nobody looks at their credit report often due to the time and effort involved. So, examine yours at least annually. And if you see old accounts listed that you no longer use, close them.
Someone Has Stolen Your Identity — Now What?
If someone has forged a check on your account, laws in most states hold banks responsible for any loss. However, you must notify financial institutions about the problem in a timely manner. If someone illegally uses your credit card, your maximum liability for each account is $50 if you report it within 50 days. Debit cards are another matter: Your liability is $50, but only for the first two days after the card is lost or stolen. Your liability increases to $500 for the next 58 days, and after 60 days, your liability is unlimited. Thus, if you have a line of credit attached to your checking or savings account, you could lose thousands of dollars.
Obviously, as soon as you discover or suspect a problem, notify the institution that handles the account. Do the following:
- Phone the institution. Each maintains a fraud division, so make sure you’re talking to people able to take action. Maintain a log showing the telephone number, date, time of the call, and name and title of the person with whom you spoke. Add notes describing what was discussed and actions agreed to.
- Send a certified letter, return receipt requested, to the person you spoke with, confirming the call and summarizing the conversation. If you send an e-mail instead, require that they confirm receipt.
- Keep your original logs, notes, and documents. Upon request, send copies; never give originals to anyone.
- Keep all records for at least seven years after you have resolved the last problem.
- Close all affected credit card, investment, and bank accounts. Open new ones. This is a major hassle, but the alternative might be to lose all the money in those accounts. Put your request in writing and ask each institution to place on each account the statement, “Account closed at customer’s request.”
- Issue “stop payment” requests on all missing or outstanding checks. Ask each bank and credit card company for a copy of its “fraud dispute form.” Fill it out promptly and return by certified mail, return receipt requested.
- Notify the following check verification companies that your checks have been stolen:
Certegy Inc.: 1-800-437-5120
- If a financial institution is not supporting your efforts, find out your bank’s regulator by visiting the Federal Financial Institution Examination Council online at www.ffiec.gov. Contact the regulator, carefully explain your problem, and include a description of the financial institution that is not assisting you.
- Place a 90-day fraud alert on your file by contacting any of the three credit reporting agencies (Transunion: 800-680-7289; Equifax: 888-766-0008; Experian: 888-397-3742). When there is a fraud alert on your report, creditors are supposed to contact you to verify you want to open a new account. An extended seven-year fraud alert is available to victims of identity theft who file an identity theft report filed with law enforcement.
- File a police report immediately in the jurisdiction where your problem occurred (for example, in the city where your wallet was stolen); many banks, credit card companies, and credit reporting agencies will request a copy. Keep in mind that this type of crime, unless it occurred just minutes ago (“Hey! He just stole my wallet!”), is often a low priority for law enforcement. The more evidence and information you can provide the police, the more cooperative and helpful they’ll be. Still, expect few results — and be downright astonished if they catch the culprit.
- If there is any chance that the thief might use your Social Security Number, contact Social Security at: http://www.socialsecurity.gov/pubs/10064.html.
- If you think the thief might be using your driver’s license, contact your state’s department of motor vehicles and ask to have a fraud report attached to your record.
- Report your problems to the Federal Trade Commission at https://www.ftccomplaintassistant.gov/. The FTC will investigate only if there is a pattern of identity theft in your area.
- Never pay for any forged check, credit card purchase, or other fraudulent transaction for which a merchant may try to hold you liable. If presented with an invoice or demand for payment, explain the situation with the vendor. Be polite, friendly, professional, and communicative, but do not pay a debt that is not yours. If you pay a false bill in error, it is highly unlikely you will get your money back.
For more information on identity theft, go to the Federal Trade Commission’s website at: http://www.consumer.ftc.gov/features/feature-0014-identity-theft.