You’ve read about it, and you thought it would never happen to you. But suddenly your bank account is empty, your credit card bills are through the roof, and you’re getting late notices for accounts you don’t own. What should you do?
Time is money.
To minimize your losses, act fast. Contact, in this order:
-Your credit card companies.
-Local, state, or federal law enforcement authorities.
First stop: Credit card companies.
Credit card companies are getting better at detecting fraud. In many cases, if they spot unusual activity, they’ll call you to confirm that you made the charges. But the responsibility to notify them of lost or stolen cards is still yours.
If you notify them within 30 days after you discover the loss, you won’t be responsible for more than $50 per card in fraudulent charges. Ask that the accounts be closed at your request, and open new accounts with password protection.
If an identity thief opens new accounts in your name, you’ll need to prove it wasn’t you who opened them. Ask the creditors for copies of application forms or other transaction records to verify that the signature on them isn’t yours.
Finally, follow up with letters that include the date you reported the loss or theft. Watch your monthly statements from the creditor and if any fraudulent charges appear, contest them in writing.
Next up: Your bank.
If your debit (ATM) card is lost or stolen, you won’t be held responsible for any unauthorized withdrawals if you report the loss before it’s used. Otherwise, how much you’re on the hook for depends on how quickly you report the loss. In general:
-If you report the loss within two business days after you notice the card is missing, you’ll be held liable for up to $50 of unauthorized withdrawals. However, if the card doubles as a credit card, you may not be protected by this limit.
-If you don’t report the loss within two days after you notice the card is missing, you can be held responsible for up to $500 in unauthorized withdrawals.
-If you don’t report an unauthorized transfer or withdrawal that’s posted on your bank statement within 60 days after the statement is mailed to you, you risk unlimited loss.
Keep in mind that policies vary from bank to bank, so make sure you understand your specific bank’s rules and timelines.
If your checkbook is lost or stolen, stop payment on any outstanding checks, then close the account and open a new one. Dispute any checks not written by you. This can help keep money from being taken out of your bank account or from collections agencies coming after you (and damaging your credit) if a merchant tries to cash a bad check after your account is closed.
Now place a fraud alert on your credit report.
If your credit cards have been lost or stolen, and you think someone is using your identity, you can place an initial fraud alert on your report. This alert will remain on your account for 90 days.
If you know with certainty that someone has stolen your identity by using an existing account fraudulently or opening a new account in your name, you can place an extended fraud alert on your credit report. This type of alert stays on your report for a full seven years. However, you’ll have to file a report with a law enforcement agency first.
Once a fraud alert has been placed on your credit report, anyone who checks it is required to verify your identity before extending any existing credit or issuing new credit in your name. For extended fraud alerts, this verification process must include contacting you personally by phone.
Most states also allow you to “freeze” your credit report. Once you freeze your report, no one — creditors, insurers, and even potential employers — will be allowed access to your credit report unless you authorize it.
To freeze your credit report, you must contact all three major credit reporting agencies. In many cases, those affected by identity theft are not charged a fee to freeze and/or thaw their credit reports, but the laws vary from state to state. Contact the office of the attorney general in your state for more information.
If you discover fraudulent transactions on your credit reports, contest them through the credit bureaus. Do it in writing, and provide a copy of the identity theft report you file. You should also contest the fraudulent transaction in writing with the merchant, bank, or creditor who reported the information to the credit bureau.
But don’t stop there. Follow up to make sure that your report has in fact been corrected, and continue to monitor your report for any new suspicious activity.
Last stop: Law enforcement agencies.
Finally, you should file a report about the theft with a federal, state, or local law enforcement agency. Once you’ve filed the report, get a copy of it — you’ll need it to file an extended fraud alert with the credit bureaus. You may also need to provide it to banks or creditors before they’ll forgive any unauthorized transactions.
When you file the report, give the law enforcement officer as much information about the crime as possible. Include the date and location of the loss or theft, information about any existing accounts that have been compromised, and information about new credit accounts that have been opened fraudulently. Write down the name and contact information of the investigator who took your report so you can give it to creditors, banks, or credit bureaus that may need to verify your case.
In addition to law enforcement, you may need to follow up with other government agencies depending on how you were affected.
-If the theft of your identity involved any mail tampering (such as stealing credit card offers or statements from your mailbox, or filing a fraudulent change of address form), notify the U.S. Postal Inspection Service.
-If your driver’s license has been used to pass bad checks or carry out other forms of fraud, contact your state’s Department of Motor Vehicles.
-If you lose your passport, contact the U.S. Department of State.
-Finally, if your Social Security card is lost or stolen, notify the Social Security Administration.
Once they’re initially resolved, most identity theft cases stay resolved. But stay alert: Monitor your credit reports regularly, check your monthly statements for any unauthorized activity, and be on the lookout for other signs (such as missing mail or debt collection activity) that someone is pretending to be you.
Identity theft is something we all hope to avoid, but remains a common threat. By taking the proper steps and staying vigilant, you can recover and restore order to your finances.
Part of this content has been contributed by Broadridge Investor Communication Solutions, Inc.