2020 saw a dramatic increase in identity theft and fraud, according to a study from the Consumer Sentinel Network. There were 4.8 million fraud and identity theft reports in 2020, an increase of 45% from the 3.3 million recorded in 2019. A big part of identity theft cases in 2020 had to do with the COVID-19 federal stimulus checks.
To protect yourself from identity theft, you should learn how your personal information may be at risk and how criminals can use it. If someone steals your identity, you should take action to limit further damage and file a report with the Federal Trade Commission as soon as possible.
What Is Identity Theft?
Identity theft is when someone steals your personal information and uses it to make purchases, open new accounts, or commit other types of fraud. Identity theft is becoming increasingly common due to the widespread use of the internet and technology.
There are many types of identity theft, but some of the most common forms include:
1. Unauthorized credit and debit card use
Criminals use your credit or debit cards to make purchases. Investing in good antivirus software is a great way to protect yourself from online scams and fraudsters.
2. Account takeover
Thieves access your account and use it to make purchases or withdraw funds. Account takeover has become one of the most frequent cases of identity theft. When consumers are feeling financial stress due to economic crises, online scams increase. Economic crises cause businesses to cut down on non-essential costs, and often these include security systems. Hackers see an opportunity and take advantage of it.
3. Opening credit accounts or loans
Criminals may use your personal information to open a credit card or loan account. The credit cards or loans are linked to your account, and when the criminal defaults, it damages your credit score. You can dispute a credit score report to eliminate the credit score damage, but this process takes time.
4. Government identification, job, or tax fraud
Criminals use your identity to receive government benefits, use fake identification, or file taxes in your name to receive a refund. During the COVID-19 pandemic, there has been a dramatic increase in this type of identity theft.
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How to Report Identity Theft
If you realize you have been a victim of identity theft, it’s critical to act quickly and limit the possible damage. When experiencing identity theft for the first time, many people don’t know how to handle the situation. One of the first things you should do is report identity theft to the Federal Trade Commission.
Step 1: Cancel credit or debit card
A criminal doesn’t need your physical credit or debit card to steal from you. They can use your card number, PIN, and security code to make transactions. If your credit or debit card has been stolen, get in touch with your bank immediately and block the account. Some banks allow you to do this quickly via their app.
If you aren’t entirely sure, but yoususpect that someone might have your personal, bank account, or credit card information, you should still contact your bank and block the card to be on the safe side. You can take additional measures to protect yourself, such as adding a fraud alert to your credit report through a credit bureau.
Step 2: Report the crime
After taking care of your bank account and credit cards, you should report identity theft to the appropriate authorities.
You can do several things with credit bureaus in the U.S. to protect yourself and minimize damage, but first, you’ll need to report the crime. Reach out to the Federal Trade Commission and file an identity theft report. After you have filed the report, you can also sign up for their recovery plan. Through this plan, the agency will guide you on how to complete the necessary paperwork and dispute fraudulent charges.
You should also contact your local police and report the crime. Even though they can’t do much in an identity theft case, it’s still a good idea to report the crime to law enforcement authorities so they can flag potential culprits or common scams and prevent it from happening to anyone else.
Step 3: Work with a credit bureau
Several credit bureaus in the U.S. can help you deal with a case of identity theft. The three main credit bureaus in the U.S. are Experian, Equifax, and TransUnion. These agencies can help deal with the situation and reduce future damages.
You can place an extended fraud alert on your credit report with credit bureaus. This alert notifies any potential credit grantors to verify your information before granting credit. However, also note that this safety mechanism might slow down your approval process for credit. The alert can be for one year or seven years. To put it in place, you’ll need to provide a copy of your FTC identity theft report.
To remove fraudulent information from your credit report, send a copy of the FTC identity report to the credit bureau with a letter citing the fraudulent information. Then the bureau will inform the creditor in question that your identity has been stolen, and they will remove the fraudulent debt.
Step 4: Communicate with creditors and debt collectors
You can stop creditors and debt collectors from reporting fraudulent accounts under your name by sending them a copy of your FTC report. Also, in most cases, you can get debt collectors to stop contacting you by sending them a copy of your FTC report and a letter explaining you are a victim of identity theft. According to the Federal Trade Commission’s website, it’s your right as a U.S. citizen.
Step 5: Know Your rights
You have a right to get the necessary documents related to your identity theft case. These documents might be transaction records or applications for new accounts. Send the company that has the documents you need a copy of the FTC report, and they should provide them to you. Check the FTC website for a list of your rights when dealing with an identity theft case.
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Next Steps: How to Prevent Identity Theft
It’s challenging to completely protect yourself against identity theft, but you can implement a couple of strategies. With people spending so much time online either working, on social media, or purchasing items, the internet has become an opportunistic place for scammers, so you must protect the information you store and share online.
There are lots of ways you can protect your identity online, one is to get ID theft protection plan like for example Lifelock which has great reviews from clients.
Monitor your accounts closely and stay alert for any unusual activity. When surfing the internet, use an encrypted internet connection and stay off public Wi-Fi. Use complex passwords, and don’t use the same password for every account. You should also consider investing in high-quality antivirus software for your computer.
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