How Should You Respond to The Theft of Your Identity?

Was Your Identity Stolen? Don’t Panic

When Herman Ng found out he was receiving disability benefits he hadn’t applied for, he had no idea that this was only the tip of the iceberg [*]. 

A year later, not only was the Employment Development Department (EDD) still  disbursing disability payments to an identity thief using Herman’s name, but he also discovered a fraudulent Bank of America account in his name as well.  

According to the Federal Trade Commission (FTC), identity theft was the most reported crime in 2021, with victims losing upwards of $6.1 billion to ID theft and related fraud [*].

But what makes identity theft so uniquely dangerous, is that nearly 50% of identity theft victims are repeat victims [*].

If someone steals your car, it doesn’t mean you’re automatically at higher risk of losing your replacement vehicle. But the same can’t be said for when someone steals your identity. 

That’s why responding to the theft of your identity demands a methodical, long-term approach. Some people compare the experience to managing a chronic disease — a cycle of flare-ups, treatments, and remission periods.

In this guide, we’ll walk you through the essential steps to take in order to secure your identity, protect your finances, and keep your sensitive information safe from future scammers. 

How Does Identity Theft Happen?

Identity theft occurs when bad actors use your personally identifiable information (PII) for fraud, scams, and other crimes. 

For example, scammers might use your name and stolen Social Security number (SSN) to open new bank accounts or take out loans in your name — leaving you to foot the bill and clean up the mess. In other cases, fraudsters sell your PII on the Dark Web, giving other criminals access to your accounts and information. 

Criminals have numerous ways of obtaining and exposing your PII, including: 

• Phishing attacks. Fraudsters email, call, or text, impersonating organizations that you trust to try and trick you into giving up personal data. 
• Data breaches. Cybercriminals hack customer databases from major companies and leak them onto the Dark Web. These leaks give scammers access to a wide range of customer information, from emails and phone numbers to Social Security numbers (SSNs) and financial information.
• Device and network hacking. Hackers intercept data sent over public Wi-Fi networks or hack into individual phones and computers to steal confidential login credentials. From there, they can work their way into your email inbox and other accounts.
• Malware and other viruses (like keyloggers). Fraudsters trick you into clicking on malicious links or downloading malware that spies on you and steals your sensitive data. Some forms of malware even record every key you type — including passwords and account numbers.
• Stolen mail, documents, and IDs. Physical identity theft is still a serious problem. Scammers steal anything that contains your sensitive information — from everyday mail to your driver’s license or passport.

Investigating identity theft is a complicated process, as the crimes often occur in different states, counties, or even countries. And because law enforcement can’t easily tell the difference between you and an identity thief, the crimes often go unpunished. 

That’s what makes this crime so appealing (to criminals) and dangerous (to victims).

⛳️ Related: How To Check If Someone Is Using Your Identity →

How Should You Respond to the Theft of Your Identity?

Follow these steps as soon as you realize that your identity, finances, or online accounts have been compromised.

1. Contact your identity theft protection service or other insurance provider

The process of recovering from identity theft can be long and complicated. But you don’t have to go through it alone.

If you’re already a member of an identity theft protection service like Identity Guard, this should be your first call.

Identity Guard’s team of U.S.-based White Glove Fraud Resolution Specialists are available 24/7 to answer questions, and can even facilitate three-way calls between you and your bank or government agencies.

What to do:

• Contact your provider. They’ll be able to walk you through the steps of the fraud resolution process. 
• Check your insurance coverage. Every Identity Guard membership comes with $1,000,000 in insurance for eligible losses due to identity theft. Start tracking your expenses and losses to make sure you’re not paying out-of-pocket to deal with the consequences of identity theft. 
• Notify your bank. Financial institutions and credit card companies provide resources to customers facing identity theft. You may be eligible for increased protection and monitoring. If not, you should purchase these services and increase security on your accounts.

Consider this: Check your workplace or home insurance policy to see if identity theft protection is one of your benefits. Many companies offer identity theft protection as an employee benefit or as part of another insurance package. 

2. Freeze your credit report with all three bureaus

Identity thieves are almost always financially motivated. If they have access to your personal information, they can try to open new accounts or take out loans in your name. 

A credit freeze stops anyone from accessing your credit file. As most creditors check your credit report before opening a new account in your name, this can protect you from financial damage. 

What to do: ‍

Contact each credit reporting agency and request a freeze. There are three major credit reporting bureaus in the United States — Experian, Equifax, and TransUnion. You will have to request a credit freeze with each one individually. 

These agencies accept freeze requests online, by phone, and by mail:

Credit freeze or fraud alert? A fraud alert is another option to protect your credit report. However, it only warns lenders to take extra precautions to confirm your identity before issuing new credit (rather than restricting access). That’s why we suggest freezing your credit instead. 

3. File an official report with the Federal Trade Commission (FTC)

Filling an official identity theft report is essential when it comes to proving your identity was stolen and disputing fraudulent activity. You can report identity theft to the FTC at IdentityTheft.gov. Their online tool will ask for your personal information and specifics of the crime and then provide a personalized recovery plan. 

You can also contact the FTC toll-free at 1-877-FTC-HELP (382-4357). 

What to do:

• Go to IdentityTheft.gov and click on “Get Started.” Follow the prompts and submit the details of your identity theft experience.
• Make multiple copies of the FTC Identity Theft Report. You will need to file this report with every organization with which your identity thief interacts — such as banks, government agencies, or even the police.

⛳️ Related: Identity Guard vs. IdentityForce: 2023 Comparison & Showdown →

4. Get a free copy of your credit report and look for suspicious activity

Your credit report contains data about your payment history, outstanding balances, and credit accounts. If a scammer opens new accounts, takes out loans, or requests credit inquiries in your name, these actions will show up on your credit report. 

You are eligible to receive a free copy of your credit report from each of the three major credit bureaus every year from AnnualCreditReport.com. This report does not include your credit score. However, it will provide clear insight into the fraudulent credit lines that you must close.

What to do:

• Scan your free credit reports for signs of fraud. If you haven’t ordered a free copy of your report in the last 12 months, you are eligible to receive one for free. It’s important that you review your report from each of the three bureaus — as some lenders only report to one or two of them. 
• Check for suspicious activity. Look for credit activity that you don’t recognize — such as new accounts, incorrect personal information, or loans you didn’t apply for. Write down the details of every suspicious account.
• Consider signing up for credit monitoring. Identity Guard monitors your credit report at all three bureaus and can alert you in near real-time to any changes or suspicious activity. The faster you can identify and shut down scammers, the less damage they can do. 

Learn more about how Identity Guard keeps your credit safe →

5. Check your bank account and credit card statements for signs of fraud

If fraudsters have access to your financial information, they could try to empty your bank accounts or use your credit cards for fraudulent purchases. Scan your statements for any transactions or withdrawals that you don’t recognize. 

• Check your latest statements for fraudulent activity. Look through your bank statements for charges you don’t recognize. Don’t ignore small transactions, either. Criminals often start small to “verify” your bank details or credit card numbers before moving on to larger frauds. 
• Contact your bank’s fraud department. Explain that you’ve been the victim of identity theft and ask them to close your accounts and issue you new cards. 

6. Contact any company where fraud occurred

If you find any suspicious activity on your credit report or account statements, you’ll need to notify the impacted companies. Contact their fraud departments and provide any information you have — including your FTC report number. 

What to do:

• Call each company where you know your identity was fraudulently used. Ask to speak with a fraud specialist. Most organizations have a dedicated department for handling identity theft issues.
• Use the information from your identity theft report. Most organizations will want to see a copy of the report that you got from the FTC. Make sure you send the report to them through a secure channel.

⛳️ Related: Do You Really Need Identity Theft Protection? →

7. Dispute fraudulent transactions and accounts

Every institution has its own dispute process — and it’s rarely easy or straightforward. Put together your list of fraudulent charges, accounts, or transactions and come prepared with supporting documentation.

What to do:

• Create a master list of every instance of fraud across your credit report, bank accounts, or credit card statements. Prepare evidence for each fraudulent transaction, including dates, amounts, and locations.
• Contact each company and ask to speak to its fraud department. Explain what happened and provide your FTC report as proof that your identity was stolen. 
• Request written confirmation that your accounts are closed. Ask for a letter or email that confirms the fraudulent account has been closed or debt has been removed from your file. 

8. Stop debt collectors from damaging your credit score

If the identity theft has been going on long enough (or is ongoing), you may be stuck with fraudulent debts. 

Hold your ground when speaking to debt collectors. Mention that your rights are protected by the Fair Debt Collection Practices Act and the Fair Credit Reporting Act. These laws prevent debt collectors from repeatedly calling at odd hours or threatening legal action that they can’t follow through on. The responsibility for responding to identity theft falls on financial institutions — not their customers. 

What to do: Contact all debt collectors within 30 days of discovering the debt and explain that:

• Someone stole your identity (provide your FTC report as proof). 
• You won’t be paying the fraudulent debt and are protected by federal laws. 
• They need to stop reporting the debt to credit bureaus. 

You should also ask them to send you information about the debt, such as a copy of the application and the applicant’s signature. 

Consider this: The FTC has numerous letter templates that you can use for disputing charges with your bank, credit bureaus, and debt collectors. 

9. File a report with local law enforcement

In certain situations, you should also report the identity theft to your local law enforcement —  for example, if you have information about the criminals that could lead to an arrest, or your identity was used during a crime. 

If your identity was used in a different city or state, you should also contact the local police in the municipality where the fraud took place. 

What to do:

• File an identity theft report with your local police department in person. Bring along primary identification, such as your driver’s license, to prove your identity. If you know fraud was committed in another city or state, include that in your report so that your local police department can help you file a report there as well. 
• Keep proof of your reports. Your police reports will help you prove you are a victim of identity theft. Make plenty of copies and keep them safe.

10. Secure your online accounts

If your online accounts have been compromised, you’ll want to secure them with new passwords, two-factor authentication (2FA), and a password manager. This includes your social media and email accounts along with any business platforms you use. 

Your email inbox is especially important, as scammers can use your email to request password resets to other services (such as your bank). 

Even if there are no signs of unauthorized activities on your accounts, you should assume your accounts are vulnerable. Take steps to protect your digital accounts.

What to do:

• Change your passwords. Use unique and strong passwords that are at least 10 characters long and include a combination of letters, numbers, and symbols. Avoid using easily guessable combinations or words (such as your mother’s maiden name or pet names).
• Enable two-factor authentication (2FA). This added level of security requires a secondary code or security method confirmation before you can log in — such as a code sent to your phone, or your fingerprint. Enabling 2FA makes it much harder for intruders to compromise your online accounts.

⛳️ Related: The 10 Best Identity Theft Protection Providers of 2024 →

11. Scan your devices for malware and other viruses

Device hacking and malware can compromise your most sensitive data — such as passwords and financial account information. If your identity was stolen through an advanced cyberattack, you’ll want to clear any viruses off your devices. 

Beware of “free antivirus scans” as hackers often disguise malware as helpful software. Major cybersecurity brands charge money for their services, but guarantee reliability.

What to do:

• Download antivirus software on your phone and computer. Mobile phones and desktop computers use different antivirus applications. Look for one suited to your particular situation, with a price within your budget.
• Run a full scan on your devices. If the app finds malware, it will isolate it and explain how to delete it. Sometimes the antivirus app can do this for you, but not always. Make sure to also set up a regular scan schedule to keep your devices clean and secure.

12. Protect yourself against tax fraud

Tax identity theft is a type of fraud in which scammers file taxes in your name (using your SSN). The goal is to claim bogus income and benefits in order to receive a large refund check. 

If your PII has been compromised, you should contact the Internal Revenue Service (IRS) to make sure that you’re not the victim of tax identity theft as well. 

What to do:

• Contact the IRS. If you suspect your social security number is compromised, you can call the IRS for specialized assistance. If you receive an unexpected IRS notice, you can call the provided number and ask for an identity theft expert.
• Follow the IRS’ instructions if they reach out. Sometimes the IRS catches suspicious activity on its own. If the IRS Taxpayer Protection Program reaches out to you, it will provide information and guidance on how to resolve your issue.

⛳️ Related: How To Tell If a Check Is Fake (With Examples) →

13. Look for evidence of criminal identity theft

If someone impersonates you when accused of a crime, it makes the justice system work against you. You may be on the hook to pay for fines and damages. Or, if the crime is severe, you could face jail time for something you did not do.

Fighting criminal identity theft can be challenging. Law enforcement authorities may treat you like a criminal until you’re able to prove your innocence. The earlier you detect evidence of criminal wrongdoing, the better.

What to do:

• Check for your name in court records. Courts publish records of their activities. If someone uses your identity to commit a crime, your name will appear in court records. This might give you early warning that your identity has been stolen and used.
• Recognize the signs of criminal identity theft. Pay close attention to legal documents, court orders, or other information that you receive in the mail. Learn to recognize the warning signs of identity theft.
• Obtain a Certificate of Identity Theft from the court. If you have been accused of a crime, you may need to prove yourself “factually innocent.” This requires obtaining a Certificate of Identity Theft from the court. It’s important to note that there are different processes for this in each state. 

Take action: Identity Guard can scan public and court records automatically and alert you if your name turns up somewhere it shouldn’t. Right now, you can save 33% on your Identity Guard membership and secure your identity against scammers →

14. Replace any lost or stolen documents and IDs

If scammers stole your ID or other sensitive documents, you’ll want to inform the agencies responsible for them and request replacements. 

Here’s whom to contact if you need a replacement: 

• Social Security card: Request a replacement card online from the Social Security Administration.
• Driver’s license: Contact your state’s Department of Motor Vehicles (DMV) to set up an appointment to receive a replacement. 
• Passport: Submit a form DS-64 to report your passport as lost or stolen. Then, request an appointment at your regional passport office to request a replacement.
• Medicare card: Create a secure Medicare account online and request a replacement. Otherwise, you can contact Medicare at 1-800-MEDICARE (633-4227).
• Health insurance card: Contact your health insurance provider and ask for a replacement (and also warn them that your card is missing or stolen).

⛳️ Related: Buying a New Vehicle? Avoid These Common Car-Buying Scams →

15. Consider signing up for identity theft protection

Identity theft protection services can automate many of the demanding tasks required of victims. 

With Identity Guard, you get:

• #1-rated identity theft protection. Identity Guard monitors your most sensitive information — including your SSN, bank and investment accounts, and more — for signs of fraud. Identity Guard was recently rated the Best Identity Theft Protection Service of 2022 by Forbes Advisor. 
• Data breach, Dark Web, public records, and social media monitoring. Identity Guard scans billions of data points for your personal information — from recent data breaches to social media and court records. 
• Credit monitoring with near real-time fraud alerts. Identity Guard monitors your credit report for any changes or suspicious activity and alerts you in near real-time. 
• 24/7 access to Fraud Resolution Specialists. Identity Guard’s U.S.-based customer care team is available at all times to help you deal with fraud or identity theft. 
• Online safety tools. Safe Browsing tools and a password manager are included with all Identity Guard plans to stop you from entering dangerous websites and ensure that your online accounts are safe.
• $1,000,000 in identity theft insurance. Every Identity Guard plan comes with $1 million in insurance coverage for eligible losses due to identity theft. 

Consider this: Signing up for identity theft protection is useful even after your identity has been stolen. There is a good chance that identity theft issues will resurface for months or years. Having a reliable partner to shoulder some of the burden can make the experience much easier. 

Is Identity Theft Insurance Really Worth It?

Resolving identity theft is a grueling and complex process. It can also be an expensive one. You may need to take time off from work. You will probably have to pay notary fees, mailing costs, and phone bills. There may be legal fees involved as well – especially if collection agencies refuse to cancel debts made in your name.

Identity theft insurance protects you from having to pay for all of these things yourself. Having a policy in place lets you resolve identity theft issues without facing financial stress at the same time. Some policies cover accountant fees, travel expenses, and elderly care as well.

Without an insurance policy, you may have to draw from your savings to pay for these expenses. If you don’t have sufficient savings, you won’t be able to resolve identity theft issues fast enough — and the longer you wait, the more difficult the process becomes. 

Identity theft insurance can mean the difference between successfully resolving your issues or facing years of complications.

The Bottom Line: Don’t Let Identity Theft Ruin Your Life

Resolving identity theft takes time. The faster you can address new issues, the more stable your life will be during this difficult period. 

Preventing identity theft is not always possible. Having a reputable identity theft protection service and significant insurance coverage can make the process of recovering your identity much simpler. It’s never too late to reinforce your security with an identity protection service like Identity Guard.

Special offer: Save 33% on your Identity Guard membership today.