Identity Theft: What You Must Know to Protect Yourself and Repair the Damage
When an unidentified stranger steals your personally identifiable information (PII) or other identifying information and uses it to commit fraud, this is known as identity theft. These criminals frequently pose as you to gain access to your financial accounts, steal money, enjoy services while you pay the bill, and even commit other scams. Your full name, address, social security number, driver's license number, phone number, account numbers, date of birth, PINs, usernames, and passwords are some pieces of information that have been stolen.
Thieves can access your information by stealing your mail or trash, tricking you into downloading spyware or malware, exploiting data breaches, and other means. They might take your debit or credit card out of your wallet to accomplish their goal.
Many people need help understanding the danger. They believe it won't happen to them until they become the victims for the first time.
The long-term effects of identity theft on you
Most people spend at least six months cleaning up, and they may continue to have serious financial and credit issues for years.
You might even run into legal problems where it might be challenging to prove your innocence if the scammer also commits other crimes while using your identity.
The fraud makes you helpless.
“One of the emotional effects of identity theft is feeling violated, betrayed, and helpless. Identity theft victims can experience confusion, anxiety, and depression. Financially, victims may suffer losses due to fraudulent transactions, difficulty obtaining credit, and other expenses related to restoring their credit and identity. To recover, it is essential to act quickly. Victims should contact the appropriate authorities, such as the police and the Federal Trade Commission. They should also contact their creditors and credit bureaus to alert them of identity theft and take steps to protect their accounts.
Finally, victims should protect their information, such as using strong passwords and monitoring their accounts regularly”, said Michael Chen, Growth Director, Notta.
It causes monetary loss.
Losing personal funds is the most severe side effect. The bank or business that issued the credit or debit card will frequently cover fraudulent purchases made using stolen card information.
But sometimes, it can be more challenging to recover and more difficult to prove money that has been stolen through other methods, like wire fraud, fake money orders, or cashier's checks.
The likelihood of recovering the stolen money significantly decreases if time passes and the victim doesn't discover the fraud immediately.
The victim may be left in financial ruin in certain situations. It might take years to recover lost money, and in some cases, it might never be found.
It can ruin your credit.
Identity theft damages your credit, making applying for loans, credit cards, or other financing difficult. It also impacts your ability to find work. Many employers run credit checks in addition to drug tests and background checks for criminal activity. Finding a job is much harder for those with low credit scores.
It creates stress
An identity theft case may require hundreds of hours to resolve. Victims often discover that problems they thought were resolved may resurface years later, necessitating ongoing damage control that can be emotionally taxing. The anxiety and stress caused by financial uncertainty can have a long-term effect on mental health. Families have lost their homes, cars, and life savings due to numerous identity theft scams, leaving them helpless. The anxiety brought on by the fear of losing everything can be emotionally debilitating and cause hospitalization and even suicide in extreme cases.
One of the most common and frustrating effects of identity theft is the time and effort it takes to recover from it. Victims of identity theft may be required to spend hours on the phone, submitting paperwork, and even appearing in court. This can be incredibly frustrating, especially when the victim has to prove they are not responsible for fraudulent charges.
The financial consequences of identity theft can also be devastating, as victims may be held liable for any debts incurred. The best way to recover from identity theft is to contact the police and all relevant financial institutions immediately and to take steps to protect your personal information in the future, said Tiffany Homan, COO of Texas Divorce Laws.
How identity theft victims can protect themselves
It's crucial to determine whether the criminal has used your information when you know or suspect someone has stolen your identity.
Avoid scams on current accounts.
Technically, credit card fraud and identity theft are two different crimes.
Although some may categorize credit card fraud as an instance of identity theft, it's usually simple to solve the problem. You need to act quickly because most credit cards offer fraud protection. On the other hand, the damage may be more challenging to repair if someone steals your personal identifying information. Make a list if you find unauthorized charges or withdrawals on current accounts. When you later get in touch with your creditor(s), you will need to be able to name each false transaction.
Avoid fraud on credit reports.
For identity theft protection, you can get a free copy of your three reports from AnnualCreditReport.com. These free reports are typically available once every 12 months. Check your three reports for indications of fraud.
Search for any current or collections accounts that you did not create on your own. Unauthorized questions may indicate that someone is attempting to open fraudulent accounts in your name if you find them.
Place fraud alerts
You can take action to stop further harm. It's a good idea to place fraud alerts with the three credit reporting agencies if you find any red flags on your credit reports, such as unauthorized inquiries or accounts you didn't open. You should also consider blocking access to your report for identity theft protection.
Freeze your credit report.
You might want to give your reports a little more security in addition to identity fraud alerts. The best way to prevent fraudsters from opening bogus accounts in your name is to place a credit freeze on your report. Your report is removed from circulation when it is frozen.
Lenders will only access your report if someone applies for credit in your name. The credit application will be turned down as a result.
Credit freezes are cost-free, as well as identity fraud alerts resulting from a 2018 FCRA amendment. To place a credit freeze, you must speak with each credit bureau separately, in contrast to one-call fraud alerts.
Learn about fraud warnings.
An instrument called a fraud alert makes it more difficult for identity thieves to use your stolen personal information. Before opening new accounts in your name, lenders must verify your identity when a fraud alert is on your credit report.
Fraud alerts can be quickly and cost-free added to your reports. Any credit bureau can add a one-year initial fraud alert once you suspect your personal information has been compromised.
The credit bureau you contact is required by the Fair Credit Reporting Act (FCRA) to inform the other two credit bureaus. Therefore, you can add fraud alerts with a single request.
- Extended fraud alerts are another service the FCRA offers to victims of identity theft.
- For seven years, extended fraud alerts are still visible on your reports.
- You must send evidence of identity theft to a credit bureau to place extended fraud alerts.
Recognize spam and con artists.
While some phishing scams are straightforward, other phishing attempts in emails, IM, social networking sites, or websites can appear very legitimate. Never click on a link sent to you to avoid identity thieves.
For instance, if the email claims to be from your bank, has all the correct logos, and is addressed to you by name, it may or may not be from your bank.
Use a search engine to locate the website rather than the provided link. This will allow you to verify that you are on the actual site and not a fake imitation.
Keep an eye on your credit reports.
The credit bureaus should remove any fraudulent accounts you disputed four business days after you report identity theft.
However, even if your dispute is successful, your work still needs to be finished regarding your credit reports. You must closely monitor your credit reports. Avoid becoming slothful because you have fraud alerts or credit freezes.
At least once every three months, though once a month is best.
Improve Your Credit
You can challenge any inaccurate information under the FCRA. This also applies to fake accounts created as a result of identity theft. The FCRA mandates that these fraudulent accounts be removed from your credit reports within four business days or less. If you want fraudulent charges from identity theft to disappear from your credit report quickly, you will need to approach your dispute in a specific way.
Actions to consider to prevent damages due to identity theft issues
The secret is to report the theft as soon as possible. Otherwise, you might be accountable for a portion or even the entire list of unauthorized purchases. Here are some more actions that you should take to protect your financial information.
- Update the usernames and passwords for your online accounts. A card issuer or bank may send a new credit card to replace a compromised account number, in which case you might also want to change your PINs.
- Keeping your passwords secure is essential because online accounts are ripe for identity theft. Regardless of convenience, only use the same password for some of your funds. As long as your Google account is secure, Google will generate and score one-time passwords for your online accounts, adding an extra layer of security.
- Inform your creditors that you were a victim of fraud if you find accounts that were opened without your consent so they can close the accounts. Find advice on challenging fraudulent charges that appear.
- File an identity theft report on IdentityTheft.gov in the most straightforward possible manner.
- A local police report may also be made. However, all you need for credit disputes is an identity theft report from the FTC.
- You can send a letter to the three credit reporting agencies once you have your identity theft report.
- Identify the erroneous accounts and include a copy of your identity theft report.
- To lessen the risk of identity theft, adopt healthy habits like regularly changing your passwords, shredding confidential documents, and being cautious about who you share your information with.
- Use robust, up-to-date security software to safeguard your computer and smartphone.
- Other security measures are of little use if your computer or phone is infected with malicious software because you've given the thieves access to all of your online activities. Make sure to install any operating system updates.
“Being a victim of identity theft can leave a very real, profound scar inside you. It can cause someone to be untrusting and even afraid of technology. Some may mistrust online banking, social media platforms, and other platforms where sensitive details are shared. This trust, once broken, can escalate over time. Soon, they could become very distrustful, affecting their personal lives, career, hobbies, and more.
This mistrust is a very emotional feeling, especially with technology being such an integral part of our lives, and can lead to several other harmful repercussions”, said Shaun Connell, Founder, and CEO of Credit Building Tips. However, no matter how much an identity thief is wise, you can stop the person from stealing your identity and damaging your reputation and credit with the proper protection and assistance.