Each month, the Identity Theft Resource Center tracks the calls that come into its non-profit, 24-hour call center in order to get a better picture of the types of crimes that are affecting consumers’ personally identifiable information. Last month, the top crime was once again financial identity theft, with 61% of the call volume for January 2015 reporting this crime.
Financial identity theft is what many people mistakenly assume all identity theft is, perhaps because it’s so prevalent.
It occurs when a thief or hacker accesses your information and uses it for financial purposes. These purposes may include draining your bank account, using your existing credit cards, opening a new line of credit or a new account, or even much larger instances such as purchasing a car or renting a home.
Fortunately, of all the types of identity theft out there, the fact that financial identity theft is so common also means that the process of clearing your name is a lot more streamlined than some of the other types. Most banks and credit card companies now have fraud detection and resolution departments to help consumers whose identities have been stolen or accounts have been accessed.
As with any type of identity theft, the first step is to figure out the extent of the damage as best you can. It could be a simple matter of one of your credit cards being used online or in a store for a single purchase, but it could extend as far as whole new accounts being opened in your name, especially if a hacker sold your identity online on a black market site. After you have a mostly clear picture of the damage, you’ll be prepared to take your findings and any receipts or statements to the police to file a police report. This step is very important, as it’s a legal document in which you’ve stated that you are not responsible for the activity on your accounts, while accepting responsibility under penalty of the law if you’re lying. Depending on the dollar amount of the damage, your bank or credit card company may require this report to remove your name from the charges.
You’ll also need to order copies of your credit reports from the three reporting agencies, which are free once per year; you’re entitled to another free copy if your identity has been stolen, and you’ll need to provide the copy of the police report with the request. While you’re ordering your reports, sign up for alerts or freezes on your credit report, as an alert is supposed to require proof of identification before a new account can be opened in your name and a freeze is supposed to prevent new accounts at all.
While you’re planning your diligence strategy in how to monitor your credit during and after an identity theft has occurred, it’s a good idea to follow best practices for preventing these kinds of cases from happening in the future. Safeguard your information so you can be sure it doesn’t fall into the wrong hands, be sure to shred sensitive documents before you discard them, and be mindful of where your Social Security number and other information ends up.