Chapter 3: How To Recover

If you are a victim of identity theft, it is important to take immediate action. You can minimize damage with an informed and systematic approach. Most likely you will be able to avoid damage and recover quickly with just a few phone calls and letters.

Because you may be speaking with many people, it is vital to become and remain organized. Keep copies of all letters, file paperwork promptly, and store everything in a safe and accessible place. Use the Identity Theft Action Log to help you keep track.

Step One: Creditors and Financial Institutions

• If accounts have been used or opened illegally, contact your creditors immediately. Ask for fraudulent transaction documentation. You may use a uniform affidavit form, available on the Federal Trade Commission's website, as you may need it to file a police report. Add "non-guessable" passwords to replacement cards and all existing accounts.

• If a collection agency attempts to collect on a fraudulent account, explain (in writing) that you are a victim of identity theft and not responsible for the debt. Ask that they confirm in writing that you do not owe the balance and that the account has been closed.

• For checking account fraud, contact your financial institution to place stop payments on any outstanding checks that you did not write. Report the crime to check reporting agencies. Close current checking and savings accounts and obtain new account numbers and passwords. Monitor all future account statements carefully for evidence of new fraud.

Step Two: Legal and Government Agencies

• Report the crime with your local police office. Request a copy of the report and keep the phone number of your investigator handy. For additional documentation you may also report the crime to the Federal Trade Commission.

• Notify your local postal inspector if someone else has used your address. If your social security number has been fraudulently used, alert the Social Security Administration.

Step Three: Credit Reporting Bureaus

• It is very important that your credit report lists only factual information. To know what is being reported, you will need to obtain a credit report from each of the three major credit bureaus (if you are married, your spouse should also check his or her report). Read each report carefully for inaccuracies.

• Even if illegal activity hasn't yet been committed, be proactive and place a fraud alert on your credit file. These alerts warn credit issuers that your personal data has been illegally accessed, and before issuing a new loan or line of credit, they must first verify your identity and gain your approval.

• To place an alert, call any of the three credit bureaus (you only need to contact one; the bureau you call will notify the others). Depending on your situation, you may want to place a 90-day or a seven-year alert:

  • 90-day alert: If you suspect you have been, or are about to be, a victim of identity theft, you may place an initial fraud alert, which is evident for 90 days, on your reports. Placing this alert entitles you to one free credit report from each of the credit bureaus.

  • Seven-year alert: If you have been a victim of identity theft you can have an extended alert, which is evident for seven years, be placed on your credit report. Provide the credit bureau with documentation of the crime and the police report. With an extended alert, you are entitled to two free credit reports from each of the credit bureaus. Both types of alerts are free to consumers.

• Some states allow identity theft victims to "freeze" their credit reports. Like the fraud alert, security freezes act as a roadblock against future fraud. Once your credit report is frozen, anyone conducting financial background checks will be informed that your report is unavailable for viewing. You will be given a special telephone number and PIN, so you can get credit (though your application process may be delayed for a few days).

To place a credit report freeze, first file a police report, then in a letter to each of the credit bureaus request the freeze be activated. Include your full name, Social Security Number, proof of your address (such as a utility bill), and a copy of the police report. Freezes are free for victims of identity theft, deployed members of the military, and senior citizens; otherwise there is a small cost.

Be aware that not all states allow security freezes - and those that do may only permit it if you've already been a victim of identity theft.