Identity theft causes more than just financial loss – the time and effort to recover from the damages can be tough and stressful.
Two-thirds of the victims have reported financial problems after the theft, where 61% said they had difficulty covering basic needs, according to a survey by Identity Theft Research Center (ITRC). Only 28% of the respondents said they resolved the issue within 6 months from the incident, while 65% could not resolve the theft even after one year.
As increased use of technology alongside social media and data breaches become a worrisome trend, it pays to be extra diligent when it comes to protecting your personal information. If you find that your identity has been compromised, there are steps you can take to help minimize the damage.
Traditional identity theft happens when a criminal obtains personal information and uses it for fraudulent activities, typically for financial gain. Personal information may include names and addresses; Social Security numbers; date of birth; bank account and credit card details; and medical insurance numbers.
Criminals could use your identity to:
Their fraudulent act could also impact your credit score if they opened new credit or loan accounts and left balances unpaid.
There are many ways criminals could get hold of your identity. Some information could be obtained from large-scale data breaches of online platforms such as a retailer, your utility company, or health care provider. Others may trick you into sharing your details through phishing attacks, your social media accounts, or other scams.
Most people won’t immediately know when their identity has been stolen. You may be notified of the theft by your service provider, or you may come across unusual activities such as:
It can be extremely stressful if this ever happens to you, but there are steps you can take to address identity theft.
Once you’re aware that your information may have been compromised, it’s important to act immediately. Here are several steps you should consider taking, depending on what type of personal information has been stolen.
If the identity breach is financial in nature, contact all three credit reporting agencies and ask each of them to freeze your credit – it’s free. A credit freeze blocks access to your credit reports, preventing both lenders and potential identity thieves from accessing your credit history.
Once frozen, it’s a good idea to ask for a free credit report to check whether any new activities have occurred in your name, including new bank accounts, credit cards, or loans. If you find new activities or accounts that you don’t recognize, contact the relevant company to speak to their fraud departments and request to close the accounts immediately.
You may temporarily or permanently unfreeze your credit files with the credit bureaus if there is a service provider who need to run a credit check on you.
Good to know: There are other anti-fraud tools you can use, such as a fraud alert and a credit lock. You can learn about the differences between the tools here.
If the data breach came from an online platform or company that you have an account with, change your password and notify the company immediately. If it’s with a financial institution, they may have a dedicated fraud department that will help guide you through the next steps.
You should also consider taking extra preventive measures to secure your account such as enabling two-factor authentication and updating your software or application to help prevent further incident. If it’s an account you don’t use, consider deactivating or closing it.
Good to know: If you did not open an account with a company or platform, contact the company to have the account removed. There may be instances where you can access the account yourself and remove it, but it’s also important to report it as fraud.
Should the breach be related to government services or benefits, you will need to contact the relevant agency directly to block or reissue your identity or benefit cards. For instance, if your Social Security number has been used to open credit cards or you’re unable to file a tax return online due to a duplicate Social Security number, contact the Social Security Administration (SSA) as soon as possible. It’s a good idea to check with your local police department on relevant laws that may require you to report on the theft.
It is a good idea to file an official report or complaint with the appropriate authorities. One way to do so is through the Federal Trade Commission’s (FTC) dedicated identity theft resource website.
Follow the step-by-step instructions to complete the filing, which will generate an FTC Identity Theft Report that can be used to prove to businesses that someone has stolen your identity. It might help you resolve issues caused by the theft, such as unauthorized transactions and debt collection on balances you don’t owe. The resource website can also generate a recovery plan tailored to your situation.
Another way to file a report is with your local police. The Department of Justice’s (DOJ) Office for Victims of Crime recommends speaking to your local police department about filing a report on the identity theft, as businesses may ask for an official police report before they will act on the fraudulent use of your identity.
If your local police won’t take a report, the DOJ suggests providing the officer with a copy of the Law Enforcement Cover Letter that explains the importance of a police report for victims. It’s important to provide as much documentation as you can to prove your case and be persistent with the filing.
You can find more resources for reporting fraud on the DOJ website and the state consumer protection offices.
Know that identity theft can happen to anyone. It’s important to ask for help and support from family and friends, a financial advisor, law enforcement, and credit reporting bureaus to work through the issues and recover any loss. Be open to counseling to help you manage the mental stress, as the recovery process can take time.
It's a good idea to take proactive steps to help safeguard against future identity theft. Here are some actions you could take:
You can read more cybersecurity tips here.
Did you know?
If you receive an unsolicited call from Marcus and you have concerns about the call, we encourage you to call us back using a number from our contact page, so you can be sure you’re speaking with Marcus.
If a suspicious email claims to be from Marcus forward it to [email protected].
This article is for informational purposes only and is not a substitute for individualized professional advice. Articles on this website were commissioned and approved by Marcus by Goldman Sachs®, but may not reflect the institutional opinions of The Goldman Sachs Group, Inc., Goldman Sachs Bank USA, Goldman Sachs & Co. LLC or any of their affiliates, subsidiaries or divisions. Information and opinions expressed in this article are as of the date of this material only and subject to change without notice.
Join our Marcus social media community, where we share content and inspiration to help improve your financial health. See you there!