What to Do If You’re a Victim of Identity Theft: A Step-by-Step Guide

Common Mistakes and How to Avoid Them

In the stressful aftermath of discovering identity theft, it’s easy to make missteps that can prolong the recovery process. Being aware of these common pitfalls can help you navigate your recovery more effectively.

Mistake 1: Delaying Action

The Mistake: Seeing a small, strange charge and deciding to “wait and see” if it happens again, or putting off reporting the theft because you feel overwhelmed.

How to Avoid It: Act immediately. The moment you suspect fraud, the clock is ticking. Identity thieves work quickly. A small fraudulent charge is often a test to see if the card is active before they make much larger purchases. Immediate reporting allows banks and card issuers to shut down the compromised account and begin their investigation, limiting your financial liability and preventing further damage.

Mistake 2: Only Placing a Fraud Alert and Not a Credit Freeze

The Mistake: Many people place a fraud alert and think they are fully protected. While a fraud alert is a good first step, it is not foolproof. It only requires a creditor to take “reasonable steps” to verify your identity, which can sometimes be bypassed by a sophisticated thief.

How to Avoid It: Place both a fraud alert and a credit freeze. A credit freeze is the strongest form of fraud protection you can use. It locks your credit file so that no new accounts can be opened. While it requires the extra step of contacting all three credit bureaus individually, the superior protection it offers is well worth the effort.

Mistake 3: Paying Fraudulent Debts

The Mistake: Receiving a bill from a debt collector for an account you didn’t open and paying it out of fear or a desire to make the problem go away.

How to Avoid It: Never pay a debt that isn’t yours. Paying it can be interpreted as an admission that the debt is legitimate, making it much harder to dispute later. Instead, use your FTC Identity Theft Report to formally dispute the debt with the collection agency and the original creditor. Federal law protects victims of identity theft from being held liable for fraudulent debts.

Mistake 4: Oversharing Information with Scammers

The Mistake: In the chaos of dealing with identity theft, you might receive a call or email from someone pretending to be from your bank, the police, or even a credit bureau, offering to “help.” They then ask you to “confirm” sensitive information like your full Social Security number, PINs, or passwords.

How to Avoid It: Be extremely cautious of unsolicited communications. Legitimate organizations will never call or email you to ask for this type of sensitive information. If you receive such a request, hang up or delete the message. If you are concerned it might be legitimate, find the official phone number or website of the organization yourself and initiate contact directly. Never use the contact information provided in a suspicious email or text.

Mistake 5: Failing to Document Everything

The Mistake: Relying on phone calls and verbal agreements without keeping a written record of your conversations and correspondence.

How to Avoid It: Create an “identity theft” file. Keep a log of every phone call: the date, time, the name of the person you spoke with, and a summary of the conversation. Keep copies of all emails and letters you send and receive. Send important correspondence via certified mail with a return receipt requested to have proof it was sent and received. This documentation is invaluable evidence if you encounter disputes with creditors or bureaus down the road.

Mistake 6: Stopping Monitoring Too Soon

The Mistake: Once the known fraudulent accounts are closed and your credit report looks clean, you stop checking your statements and reports regularly.

How to Avoid It: Stay vigilant for at least a year after the incident. Your personal information may have been sold on the dark web and could be used again months or even years later. Continue to review your bank, credit card, and insurance statements carefully each month. Take advantage of your right to free annual credit reports from all three bureaus to ensure no new fraudulent activity has appeared.

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