If you think your identity has been stolen, it's important to take action right away. Unfortunately, many people don't realize that identity thieves have already stolen their data until it's too late. By then, the damage had already been done.
However, there are some signs that can tip you off that someone's using your personal information without your permission. In this article, you'll learn how to detect identity theft and how to prevent it from happening in the first place.
We've checked official government and identity theft authority sources. We've also gathered the best tips on what to do if you suspect an ID theft.
Don't skip the most important steps to take to prevent identity theft. Read on until the very end to discover one unique tip that you must do if you think your identity has been stolen.
8 common signs of identity theft
Identity theft is a serious crime that can have a lasting impact on your finances, credit, and reputation. It can take months or even years to recover from ID theft, so it's important to catch it early.
While it's important to be vigilant about protecting your personal information, it's also helpful to know the warning signs of identity theft. Here are some of them:
1. You receive bills or statements for accounts you don't recognize
If you suddenly start receiving strange emails or bills from companies you don't recognize, it's a sign that someone may have opened up new accounts in your name.
This is a common tactic for identity thieves who often use stolen personal information to open multiple new accounts and rack up debt.
2. You see withdrawals from your bank account that you didn't make
If you notice any unauthorized withdrawals from your bank account, it's a sign that your account may have been compromised.
This could mean that someone has stolen your bank card information or gained access to your online banking account, which can happen even if your card is still in your possession.
3. You get denied for credit or loans because of information in your credit report
If a thief has taken out new lines of credit in your name, it can cause your debt-to-income ratio to become too high. This can lead to negative entries on your credit report.
As a result, when you try to apply for new credit, creditors may deny your applications for new credit. In some cases, you may even be denied loans that you've been approved for in the past.
4. You get calls or letters from debt collectors for debts you don't owe
Similar to getting bills for accounts you don't recognize, this can happen when an identity thief uses your accounts for a while before the bills start coming due. At this point, they simply stop paying and let the debt go to collections.
With this, the debt will show up on your credit report, and you may start receiving calls or letters from debt collectors.
5. Medical providers bill you for services you didn't receive
Identity thieves will often use your personal information to get access to your medical benefits.
They can use your insurance information to receive care at a provider that you don't normally use.
They may also set up a new account with your medical provider. In some cases, the thief may even use your information to get prescriptions filled in your name.
6. The IRS notifies you of suspicious activity on your tax return
This can happen if someone has used your personal information to file a fraudulent return in your name.
In many cases, the thief will claim a false refund, which can result in you owing money to the IRS or even facing criminal charges.
7. Your medical insurance provider denies your claims because of information in your file
If you've been a long-time policyholder with no issues, and suddenly your claims are being denied, it's possible that someone has used your personal information to obtain coverage elsewhere.
When identity thieves obtain your personal information, they may use it to apply for health insurance, rack up a lot of medical bills, and submit false claims under your name. As a result, the insurance company may flag your account and reject legitimate claims from you.
8. Your credit score drops suddenly and unexpectedly
Credit scores are one way for creditors and lenders to determine how likely you are to repay a loan.
A high credit score indicates that you're a low-risk borrower, while a low credit score indicates that you're a high-risk borrower.
So, if your credit score drops suddenly and without explanation, it could be a sign that you're a victim of identity theft.
Identity thieves often open new accounts in their victims' names and run up large balances. This can cause your credit scores to drop sharply.
What should you do if you become the victim of identity theft?
If you think identity thieves have stolen your identity, don't panic. Take action right away to minimize the damage and prevent further exploitation of your personal information.
Here are some steps you should take if your identity has been stolen:
Contact the credit reporting bureaus
You can contact one of the three major credit bureaus – Equifax, Experian, and TransUnion – to place a fraud alert or security freeze on your credit report.
You may also call your bank, credit card issuer, employer, or the IRS. This will make it harder for thieves to open new accounts in your name.
If you think your Social Security number has also been compromised, contact the Social Security Administration immediately. They can help you protect your benefits and prevent someone else from using your number.
Close any accounts that have been compromised
Close any accounts that have been tampered with or opened fraudulently. This includes credit card accounts, bank accounts, and online accounts.
Additionally, you should also change your passwords and security questions for all of your online accounts. This will help prevent thieves from further accessing your accounts and using your personal information.
File a police report
To document the crime and get help from law enforcement in recovering your losses, you need to file a police report. Be sure to get a copy of the police report to submit to your creditors and the credit bureaus.
Contact the FTC
The Federal Trade Commission (FTC) maintains a database of identity theft cases that law enforcement can use to investigate crimes. You can file a complaint with the FTC online or by calling their hotline at 1-877-ID-THEFT (1-877-438-4338).
Keep track of your progress
Lastly, and perhaps most importantly, keep copies of all correspondence related to your case, including letters, emails, and phone calls. This will help you keep track of your progress, follow up with any outstanding issues, and make it easier to spot any new or continued fraudulent activity.
This is a step that most victims of identity theft overlook, but can actually prove to be crucial down the line.
Keeping copies of your correspondences will make it easier not just for you to track your progress, but also for the authorities and other concerned parties to resolve your case.
Coordinating with multiple government agencies, credit bureaus, financial institutions, and other parties can get overwhelming.
Taking this extra step should help you ensure that nothing gets lost along the way and that you can recover from the damages left by identity thieves as quickly as possible.
How can you protect yourself from identity theft?
There are a few simple steps you can take to protect yourself from identity theft, including:
Securing your personal information
It’s best not to carry your Social Security card or birth certificate with you, and don't give out personal information over the phone or online unless you're sure you know who you're dealing with.
When throwing credit card and bank statements, shred them first, as these documents contain your personal information. Plus, don't put your mail in an unsecured mailbox – invest in a locking mailbox instead.
Checking your credit report regularly
You should check your credit report at least once a year for any signs of fraud or identity theft. You can order a free copy of your credit report from each of the three major credit bureaus once every 12 months.
If you see anything suspicious on your credit report, such as an account you don't recognize, contact the credit bureau immediately.
Monitoring your financial accounts closely
It’s also important to check your bank and credit card statements regularly for any unauthorized charges. Set up alerts with your bank so you're notified of any unusual activity in your account.
You may want to consider using a credit monitoring service to help you keep track of your credit report and financial accounts.
Using strong passwords and security measures
When creating passwords for online accounts, use a combination of letters, numbers, and special characters. You should avoid using easily guessed words like your name or birthdate.
For extra security, you can enable two-factor authentication for your online accounts. This requires you to enter a code that's sent to your phone or email in addition to your password when logging in.
Being aware of phishing scams
Phishing scams are attempts by thieves to trick you into giving them personal information like your login credentials or credit card number.
They may pose as a legitimate company in an email or text message, or they may create a fake website that looks like the real thing.
If you're ever unsure about the legitimacy of an email or text message, don't respond to it, and don't click any links. You can also hover over any links to see where they would take you before clicking them.
Protecting your computer with security software
As anyone who has ever dealt with a malware infection can attest, antivirus software is essential for keeping your computer safe.
Malware can enter your system in many ways, from infected email attachments to drive-by downloads, and once it's on your machine it can wreak all sorts of havoc.
Antivirus software works by scanning your computer for known malware signatures and quarantining or deleting any files that match.
It also monitors your system for suspicious activity, like unusual files opened or modified, and can block dangerous websites that are known to host malware.
Keep your software updated
One of the best things you can do to protect your identity online is to keep your software up-to-date. That may seem like a no-brainer, but you'd be surprised how many people don't do it.
Keeping everything updated ensures that you have the latest security features and patches. And that's important because new ways to steal identities are constantly being developed.
So don't wait for your antivirus software to remind you to update – do it yourself regularly. The same goes for your operating system, web browser, and any other software you use. Keeping everything up-to-date may seem like a pain, but it's worth it to protect your identity.
Be careful of the information you share online
Most of us are pretty careful about the information we share online. We know not to post our home address or phone number, and we think twice before sharing personal details like our birthdate or mother's maiden name.
But even if we're being careful, we might still be inadvertently sharing information that could be used for identity theft.
For example, did you know that your email address can reveal your gender, age, and even your income level? And if you've ever shared your location on social media, you've also given away clues about where you live and work.
So how can you protect yourself from identity theft? The best defense is simply to be aware of the type of information you're sharing online.
When in doubt, err on the side of caution and don't post anything you wouldn't feel comfortable sharing with a stranger.
By being mindful of the information you share, you can help protect yourself from identity theft.
Conclusion
Identity theft is a serious crime that can have lasting repercussions for the victim. However, by taking some simple precautions, you can protect yourself from criminals who will try to exploit whatever information about you they can get their hands on.
If you think your identity has been stolen, don't hesitate to take action. The sooner you do, the better chance you have of minimizing the damage.
Aidan has been writing about personal finance for over 6 years. Prior to this, he worked as a Corporate Finance Analyst where he specialized in Due Diligence, Company Valuations and more. He is a CFA charterholder.
