Detecting Identity Theft

Unlike a robbery or burglary, identity theft often happens without the victim's knowledge. Most identity theft victims only find out after seeing strange charges on their credit card statements or applying for a loan.

Prevention is always the best policy. You can use strategies to avoid typical scams, such as phishing for financial information.

But sometimes, personal information gets exposed through security breaches at banks, stores, or other companies. Ultimately, identity theft can happen to even the most cautious consumers.

The following FAQs can help you detect identity theft and stop fraudulent activity as early as possible.

• What are some common signs of identity theft?
• Will I know when somebody steals my identity?
• What should I monitor to detect identity theft?
• How do I access my free annual credit report?
• Should I pay for a credit monitoring service?
• What should I do if a scammer stole my identity?
• Should I hire a lawyer for identity theft?

What are some common signs of identity theft?

Early signs of identity theft include:

• Failing to get bills or other mail related to your accounts (an identity thief may have changed the billing address on your accounts to hide their activity)
• Getting credit cards you never applied for
• Being approved for much less favorable terms for a credit application than you expected
• Getting calls from debt collectors or businesses about unfamiliar debts or charges
• Getting notices of new accounts that you never opened
• Finding strange charges and debits on your accounts that don't make sense with your spending habits
• Getting mail or insurance claims for unrequested medical services

Checking your credit report is an efficient way to detect fraudulent activity in your name. Evidence of identity theft typically includes fraudulent or inaccurate information on your credit report. For example, you might see incorrect addresses, names, initials, or Social Security numbers.

Will I know when somebody steals my identity?

You might not — at least not right away. Most victims of identity theft don't know the crime has happened until the damage is done.

Watching for the early signs described above can help you catch fraud before it worsens. Unfortunately, many people only find out once they run into serious problems.

Unless you actively watch your accounts, the first sign of identity theft could be any of the following:

• Bill collection agencies call or write to you about past due balances for debts you never personally charged
• Unfamiliar problems with your credit history hold up a car loan or mortgage application
• You get mail about an apartment you never rented or a job you never had
• A lender unexpectedly rejects your credit application
• The IRS claims you filed multiple tax returns fraudulently
• You get a surprise overdraft notice for lack of funds in your bank account

Financial institutions must watch for signs of identity theft under the "red flags rule." But you know your finances best. Your bank or credit card provider might not always tell whether a certain activity belongs to you or an identity thief.

What should I monitor to detect identity theft?

Check your financial statements, especially credit card statements, for irregularities.

Monitoring your credit report is perhaps the best way to see all credit, including credit applications, in your name. Your credit report will show signs of possible identity theft — even if you don't get suspicious mail or charges.

Review your credit report for the following issues:

• Inquiries from companies you didn't contact
• Accounts you didn't open
• Debts you can't explain
• Inaccurate personal information

Check your credit report at least once a year. Remember that federal law requires credit reporting agencies to provide consumers with free annual reports.

How do I access my free annual credit report?

The Fair Credit Reporting Act allows for one free report each year. The three major credit bureaus include Equifax, Experian, and TransUnion.

You can request a free copy of your credit report through the Annual Credit Report Request Service below:

• 877-322-8228
• Annualcreditreport.com
• Annual Credit Report Request Service, P.O. Box 105281, Atlanta, Ga. 30348-5281.

Federal law also entitles consumers to a free credit report if a company denies your credit application or takes adverse action against you. But you must request it within 60 days.

Should I pay for a credit monitoring service?

Paying for a fraud alert service is unnecessary. Regularly checking your finances and credit report is usually enough to detect problems. Yet, you may subscribe to one for convenience and peace of mind.

These commercial, fee-based services promise to track your credit reports for suspicious activity and alert you to changes. Not all are equal, so some might not be worth the money.

Research the company first. Check with the Better Business Bureau or your state attorney general to see if they have received consumer complaints.

What should I do if a scammer stole my identity?

The steps to take next can include:

• Filing a police report with local law enforcement
• Alerting the Federal Trade Commission (FTC) through IdentityTheft.gov
• Reporting fraud to your bank
• Locking your credit cards
• Placing a security freeze on your credit
• Reviewing all your accounts to assess the extent of fraud
• Filing a claim under your identity theft insurance policy
• Learn about potential compensation if police catch the identity thief

Immediate action can stop and sometimes reverse the damage of identity theft.

Should I hire a lawyer for identity theft?

Some identity theft cases may warrant seeking legal advice, especially when the damage is extensive.

Identity theft can create a complex web of legal and financial issues. A consumer protection lawyer can help you untangle it. An attorney can help you understand the options to recover from lost money and privacy.