Before this year, identity theft was a topic I felt strangely disconnected from. I knew it was something that happened to “other people.” But I also felt confident that it would never happen to me. Yet, in January of this year, it did.
Virtually every piece of sensitive information about me, including my Social Security number and driver’s license number, was stolen by identity thieves. And over a three-month period, the fraudsters worked tirelessly to wreak havoc on my financial life.
They were able to open five credit cards and more than ten bank accounts before I was even aware that my information had been compromised. Even after locking my information down, another 30+ credit card loan applications and 50+ fraudulent bank applications were submitted in my name.
Slowly but surely, I was able to clean up the mess and get my life back under control. Want to know what it takes to recover from identity theft from someone who had to learn the hard way? Here are seven steps that I recommend.
1. Add a Fraud Alert to Your Credit Report
I first became aware that my identity had been stolen when I checked my mailbox and found “welcome” letters from multiple credit cards and banks. Since I hadn’t applied for any of these accounts, I knew there was a serious problem and I needed to take quick action.
The first step I took was to add a fraud alert to my credit report. These alerts notify credit card companies that your identity may have been stolen. In turn, they are encouraged to take additional steps to verify your identity (such as contacting you over the phone), before approving any applications for credit.
It’s completely free to add a fraud alert and you can do so in a matter of minutes by calling any of the three major credit bureaus (Experian, Equifax, or TransUnion). And you don’t have to contact all three bureaus as the one you call will notify the other two major bureaus for you.
Fraud alerts expire after one year unless renewed. But victims of identity theft can apply for an extended fraud alert, which lasts for seven years. These alerts, however, can only be requested if you have an FTC Identity Theft Report or police report.
2. Freeze Your Credit
I have to admit that I was a bit proud of myself for taking such quick action to add the fraud alert to my credit report. And I naively assumed that this would stop any fraudulent credit or loan applications in their tracks.
I was wrong. Unfortunately, the fraud alert did little to stem the flow of fake credit accounts being created under my name. Nearly all applications continued to be approved. In fact, I only received one call from a credit card company to verify my identity after I had added the fraud alert to my credit report.
It didn’t take long for me to realize that more drastic action was necessary. That’s when I made the decision to place a freeze on my credit file.
With a credit freeze, creditors are unable to access your credit file at all. And since the vast majority of credit issuers require a credit check, it makes it highly unlikely that anyone will be able to get approved for credit using your Social Security number — including you.
If being unable to apply for credit yourself sounds inconvenient, you’re not wrong. But the good news is that you can temporarily lift a security freeze at any time. Recently, I needed to thaw my credit to open a business checking account and was able to do so with all three credit bureaus in less than ten minutes.
3. File an Identity Theft Report With the FTC
When you file an Identity Theft Report with the Federal Trade Commission (FTC), you’re reporting the crime to a federal agency that could charge you with criminal penalties if you lie. And while that might not sound scary, it’s also compelling evidence to creditors and businesses that you’re telling the truth.
Thankfully, the FTC makes it easy to fill out an Identity Theft Report completely online. I finished mine in about 15 minutes and saved the completed form as a PDF for my own personal records.
4. File a Police Report
Before the FTC created its own Identity Theft Report, victims filed police reports.
In theory, filing an FTC report should nullify the need for a police report in most cases. However, I found that whenever I would call to cancel a credit card or visit a bank to close an account, they would always encourage me to file a police report as well.
One bank representative informed me that the identity thieves had used my driver’s license number when opening the fake account. And she warned that if they were able to produce a fake driver’s license, they could steal a car, get a speeding ticket, or commit some other crime as “me.”
I was scared enough by this potential nightmare that I immediately headed over to my local police department and filed the report. In many areas, you’ll need to visit your local police station in person as I did. But, in some cases, you may be able to file an identity theft police report online.
5. Remove Fraudulent Inquiries from Your Credit Report
After freezing my credit, no more new credit accounts were opened in my name. But I still had a ton of work to do to remove the fraudulent hard credit inquiries that had already been added to my credit report.
There are two primary ways to dispute a credit inquiry. One way is to call up the bank or credit issuer where the account was opened. In about 90% of the hard credit inquiries that I had removed, a customer service representative from the financial institution happily took care of it for me.
My first preference was always to ask the creditor to remove the inquiry because it required only one phone call. When you dispute an inquiry with the credit bureaus, on the other hand, you’ll need to make three claims (one with each major credit bureau).
6. Place a ChexSystems Security Freeze
Once I had frozen my credit and removed all the fake hard credit inquiries from my credit reports, I thought that I was finally done with the whole ordeal.
Unfortunately, I was wrong yet again. I continued to receive a steady stream of welcome packets from banks for new checking accounts that had been opened in my name.
I was very confused. How could someone open up a bank account using my Social Security number if my credit was frozen? I discovered that while credit card issuers rely on credit reports, banks tend to focus more on a different report called the ChexSystems report.
Your ChexSystems report shows banks if you’re a high or low-risk customer by providing your history of bounced checks, account closures, and more. And while some banks will check both your credit report and your ChexSystems report, it appears that many only check the latter.
Thankfully, I learned that it’s easy to freeze a ChexSystems report as well. I was able to do it in five minutes online. Since then, I haven’t had any bank accounts opened in my name.
7. Sign Up for Identity Theft Protection
Now that my personal information has been breached, I’ll be monitoring this for years. That’s why I decided to sign up for identity theft protection.
You may be wondering why someone with a frozen credit report and ChexSystems report would also sign up for identity theft protection. The reason is that opening bank and credit accounts aren’t the only ways that identity thieves can cause harm.
For example, down the road, they might try to use my name and Social Security number to file a fraudulent tax return. Or they may try to use my information to get access to my real bank and investment accounts or to rack up medical debt.
With identity theft protection, I get access to 24/7 personal identity and Social Security number scanning and alerts. And many of the best services like LifeLock, Identity Guard, and Identity IQ also offer identity theft insurance that will reimburse any stolen funds or expenses related to identity theft recovery.
Identity Guard uses AI to uncover identity theft by sifting through data on the web to find out how and where your information is being used. Identity Guard offers three plans to choose from. The most affordable is well under $10 a month–that’s about the cost of two expensive lattes–so it’s an easy one to fit into a budget.
For about the same price (two expensive lattes), Identity IQ offers a bit more features including annual 3 bureau credit report and scores, SSN alerts, checking account report, and more. It’s a great bang for your buck.
Having your identity stolen makes you feel violated, abused, and angry. I know because that’s exactly how I felt. And I also know how much time it can take to clean things up.
But by putting in the time now to take the appropriate recovery steps, you can stop the bleeding faster. And you can better protect yourself from future identity thieves who will want to use your good name to make a quick buck.
Related: How to Avoid Identity Theft
Want to Know More?
Here’s more info on how to temporarily lift a security freeze.
Need to report identity theft with the FTC? You can start your own Identity Theft Report here.
Need to stop fraudsters from opening bank accounts in your name? Freeze your ChexSystems reports here.