credit

A 12-point checklist for victims of identity fraud

ID fraud © iStock

As soon as you suspect that you've been a victim of identity theft, taking these steps immediately will help you clear your name and your credit. Also, consider grabbing a free credit report from myBankrate.

1. Notify affected creditors or bank

If a bank account or existing credit line has been affected, shutting it down should be the first order of business. Working with the credit card company or the bank as soon as possible can save you money. In general, most credit cards have zero-liability policies, but the Fair Credit Billing Act specifies that your maximum liability for unauthorized charges is $50.

ATM or debit cards and electronic transfers from your bank account fall under the Electronic Fund Transfer Act. Under this act, consumers have to move fast. Reporting a lost or stolen ATM or debit card before any fraudulent transactions means the victim is off the hook for any that happen afterward.

But if purchases or withdrawals are made, consumers have a small window of two business days after you realize the loss has occurred to report the unauthorized charges or transfers and get a $50 liability limit. After that, there is a $500 liability limit for up to 60 days after the statement reflecting the fraud is mailed. After 60 days, consumers are exposed to unlimited liability.

Consumers should also notify banks of any lost or stolen checks.

2. Put a fraud alert on your credit report

"Contact any one of the three credit reporting agencies and request a fraud alert. By doing so, a fraud alert will be put on all three of your credit files," says Steven Katz, former director of consumer education for TransUnion's TrueCredit.com.

The fraud alert will last 90 days. After you've filed a police report or filled out the ID theft complaint form from the Federal Trade Commission, you can put an extended fraud alert on your credit. The alert stays in effect for seven years.

"Filing a fraud alert is probably the best step for someone who is unsure if they are a victim," says Katz.

A credit freeze will provide more protection but can be restrictive when applying for credit.

3. Check your credit reports

After installing a fraud alert in your credit file, you'll automatically receive a free credit report from each of the three agencies, and you will be opted out of preapproved credit card and insurance offers. After you receive your reports, make note of the unique number assigned to your account. This will be valuable in all your communications with the agencies.

Check your reports for signs of fraud -- new accounts you didn't open, hard inquiries you don't recognize, payment history you can't account for, an employer you never worked for and personal information unfamiliar to you. Pull each of your credit reports at least once over the course of the next year to check for fraudulent activity. Use an identity theft report to get fraudulent information removed from your reports.

4. Consider putting a credit freeze on your reports

"A credit freeze is a good thing to do if you know you're a victim, as it will completely lock down all your credit information," says Katz.

A credit freeze prevents the credit reporting agencies from releasing your credit report to new creditors. You'll pay as much as $10 to place a freeze at each bureau depending on the state you live in; it's usually free if you can prove you're an ID theft victim.

5. Contact the FTC

Contact the FTC at 1 (877) 438-4338. While federal investigators tend to pursue only larger, more sophisticated fraud cases, they monitor identity theft crimes of all levels in the hopes of discovering patterns and breaking up larger rings.

More importantly, fill out the ID theft complaint and affidavit form at the FTC's website and print out for your records. Together with a police report, it serves as your ID theft report, which will help you dispute fraudulent accounts.

According to the FTC website, an ID theft report is more comprehensive than a police report alone. Your local police department may incorporate the ID theft complaint form into its report or they might have another way of providing the full details needed for an ID theft report.

If you don't file a police report, you can use the complaint as an ID theft affidavit to request companies to remove you from being responsible for unauthorized new accounts. However, the affidavit doesn't provide as many legal protections as an ID theft report.

6. Go to the police

Alert the police in your city. You may also need to report the crime to the police departments where the crime occurred.

Securing a police report is of utmost importance. But not all states have legislated that local law enforcement must take a police report on identity theft from consumers.

The FTC provides a cover letter to give to local law enforcement which stresses the importance of police reports for consumer victims.

Make sure the police report lists all fraud accounts. Give as much documented information as possible and give them a copy of the ID theft complaint form from the FTC.

If the police cannot give you a copy of their report, request that they sign your FTC complaint form and provide the police report number in the "Law Enforcement Report" section. Keep the phone number of your police investigator handy on a contact sheet for future reference.

7. Send creditors a copy of your ID theft report

Notify creditors in writing that you have been a victim of fraud and include a copy of your ID theft report.

Further, ask each affected creditor to provide you and your investigating law enforcement agency with copies of the documents showing fraudulent transactions. You may have to fight to get this documentation, but don't give up. You'll need these to help track down the perpetrator.

Informing creditors of the fraud should get them to stop reporting the information to the credit reporting agencies.

"We always advise that you contact the creditor first because they will continue to report that information that they have. But we take steps on our end to make sure that the fraudulent information doesn't show up on the credit report," says Katz.

8. Contact credit reporting agencies

By sending a copy of your ID theft report to the consumer reporting agencies, fraudulent accounts should be blocked from appearing on your credit report.

Nonetheless, consumers must keep a close eye on credit reports to make sure that erroneous information doesn't get added again.

"Often the bad information that they thought they had cleared up mysteriously reappears," says Ed Mierzwinski, U.S. PIRG consumer program director.

9. Change all account passwords

If an account doesn't have a password, put one on it. Avoid using obvious passwords such as the last four digits of your Social Security number or your birth date.

10. Contact the Social Security fraud hot line

Notify the Office of the Inspector General if your Social Security number has been fraudulently used. Ask for a copy of your Personal Earnings and Benefits Statement and check for accuracy.

11. Get a new driver's license

You may need to change your driver's license number if someone is using yours as an ID. Go to the Department of Motor Vehicles to get a new number.

12. Contact your telephone and utility companies

They need to be alerted in case an identity thief tries to open a new account in your name, using a utility bill as proof of residence.

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