- Identity theft is often a crime of opportunity, so reducing risk goes a long way to protect against identity theft.
- Protect your identity by securing personal information and keeping complex, unique passwords.
- Identity theft services and credit monitoring services can automate these for you and give you peace of mind.
The consequences of identity theft can be steep. There are various forms of this illegal activity, which can be used to open credit cards, buy cars, or steal your tax refund.
Identity theft is often a crime of opportunity: You may be a victim because your information was an easy target. Closing those vulnerabilities will mean that an identity thief is more likely to move to the next person who has more gaps in their cybersecurity. Knowing what to do about identity theftwill go a long way in preventing any incidents.
How to reduce the risk of identity theft
Eva Velasquez, president of the Identity Theft Resource Center, says it's best to take multiple steps to secure your identity. However, your identity will never be completely theft-proof. There's still a possibility that a hacker sneaks through layers of protection.
"There's no guarantee to prevent identity theft from happening. What you can do is engage in practices that significantly reduce your risk, but you can do everything right and still become a victim," Velasquez says.
1. Monitor your credit
Credit monitoring is the process of checking your credit report to ensure that it is free of errors and suspicious activities. You can employ credit monitoring services to do this automatically, notifying you of any changes to your credit report. Many of the best identity theft protection services include some credit monitoring capabilities, such as certain plans from Identity Guard.
You can also manually monitor your credit by regularly reviewing your credit reports. You can request to view your credit report from the three major credit bureaus for free every week through AnnualCreditReport.com.
While this doesn't necessarily prevent identity theft, it does mitigate any potential damages as a result of identity theft. With regular monitoring, you'll catch any suspicious activity early.
2. Keep your personal information secured
Another way to prevent identity theft is to keep your personally identifiable information, also called PII, from prying eyes. Fraudsters can't impersonate you if they don't have any information on you.
Velasquez says you should have all personal information, whether physical or digital, in a place that you have exclusive access to so "you're not leaving your personally identifiable information out and easily accessible for anyone coming into your house." This can include your Social Security card, financial documents, and medical records.
In addition to properly storing them, you should properly dispose of personal documents. Any physical documentation that isn't important or outdated with your personal information must be shredded immediately before throwing it in the trash. Leaving those documents intact creates an opportunity for identity thieves to recover these documents and use them against you, Velasquez says.
3. Maintain good password etiquette
There are so many online accounts to keep up with nowadays, from personal to professional. It's tempting to use the same password repeatedly or use personal names or birth dates, but think of it like an apartment building where all the units use the same lock. Someone with a working key could open every single apartment.
This kind of attack, called a credential stuffing attack, is common. Hackers find a pairing of login credentials in a data leak or off the dark web and plug it into various sites to see if it works. Identity theft protection services like Auraprovide dark web monitoring, as well as criminal activity monitoring, to ensure your data is kept secure.
Similarly, easily guessed passwords can also lead to a breach in your cybersecurity. Passwords with a complex string of numbers and symbols with varying letter cases will be harder to crack. Hints or recovery questions should also be difficult to answer by anyone but you.
A password manager or a simple physical list of usernames and passwords (provided you're following step 2) can serve as reasonable solutions to multiple passwords. Multi-factor authentication can add another layer of protection to your online accounts.
4. Freeze your credit
A credit freeze is a service offered by the three major credit bureaus — Experian, Equifax, TransUnion— that seals your credit reports from third parties. This means that lenders, for example, can't pull a hard inquiry when extending a line of credit. With your credit reports frozen, "even if a thief has all of the data needed to open new financial accounts in your name, they still won't be able to do it because the issuers of credit can't get access to your report," Velasquez says.
Equifax credit freeze: Freeze your credit with Equifax on its website, or over an automated phone line at 800-685-1111, (800-349-9960 for New York residents). If you'd rather talk to a human, its customer care number is 888-298-0045. You can also freeze your credit through the mail by submitting its Fraud Request Alert Form.
Experian credit freeze: Freeze your Experian credit report using Experian's online Freeze Center. You can also call 888-EXPERIAN (888-397-3742). Experian does not have a request form, but you can mail a written request to Experian Security Freeze, P.O. Box 9554, Allen, Texas 75013.
TransUnion credit freeze:You can request aTransUnion credit freeze through its online portal. You can also add a freeze by calling 888-909-8872. You can also print, complete, and submit TransUnion's Security Freeze Request Form.
When requesting a credit report freeze, you must place a freeze with each credit bureau individually.
The most common type of identity theft
Identity theft can happen in many ways, but financial identity theft is the most common form. Financial identity theft is when someone uses another person's monetary information for financial gain. For example, an identity thief may use your bank account or credit card numbers to steal money or make purchases, or use your Social Security number to open a new credit card.
Responding to identity theft
Immediate steps to take
If you experience identity theft, the first step you have to take is to shut down any financial information or tools that may have been compromised.
For example, if you learn that your credit card was used to make unauthorized purchases, call your credit card issuer, alert them to the problem, and either close that account or request a new credit card with a new card number. If there are online financial documents or accounts that have been accessed, change those passwords immediately.
Reporting identity theft
If you don't recognize a line of credit on your credit report, there are several steps you can take. Be sure to do this as quickly as possible, as many of these steps are time-sensitive.
Report the fraud to any companies involved
First, notify the companies involved in the identity theft. For example, if someone opens a Discover card in your name, go to Discover and tell them that the credit line is fraudulent. As long as you do that within the allotted time since the fraud occurred, usually 60 to 90 days, you won't be held financially responsible for anything.
Create an identity theft report
Report the incident to IdentityTheft.gov. Once you complete this process, you will be given an identity theft report, which you need if you want to place an extended fraud alert on your credit report, which lasts for seven months. You can report identity theft over the phone; however, you will not receive an identity theft report.
Report fraud to credit bureaus
You should also notify one of the three major credit bureaus. You only need to report to one credit bureau, as that bureau is required by law to inform the other two bureaus.
Contact your local police department
Identity theft is a crime, so filing a police report is important not only for the police to try to catch the perpetrators but also because your creditors may require a police report as proof of the identity theft.
Recovering from Identity Theft
Correcting your credit reports
After you report the identity theft, you must correct and clean up your credit reports. Work with each compromised account, creditor, and credit bureau to remove any information reported based on the identity theft.
Restoring your financial accounts
Depending on your financial institution, charges you can prove were not made by you will typically be refunded to your account. The money stolen from you should be replaced after an investigation, so it is important to file a police report and notify all relevant authorities.
Frequently asked questions about reducing the risk of identity theft
What should I do if I suspect identity theft?
If you suspect identity theft, immediately contact your bank or credit card company, report it to the FTC, and place a fraud alert on your credit reports.
What do I do if I'm the victim of identity theft?
If you're the victim of identity theft, start by securing any credit cards or bank accounts that may have been compromised. Then, report the theft to any companies that may have been involved, file reports with the credit bureaus, and report it to the government at identitytheft.gov to receive an official report.
How can I protect my personal information?
You can protect your information by not sharing personal information online, making secure passwords, and shredding documents with sensitive information.