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How to Recover A Stolen Identity

Having your identity stolen is one of the most jarring things that can happen to you and your financial life. It’s difficult in part because of the uncertainty – how it was stolen, where it was stolen, how much of your financial life has been compromised, and the unknown of what the thief could be doing with your name. When someone steals your wallet, you are probably aware of it relatively quickly. When someone steals your identity, it can be months, even years, before you realize it.

In this latest post in the Financial Contingency Plan [3] series, I explain how to prepare for and react to when your identity is stolen.

Before Your Identity is Stolen

Recovering from a stolen identity isn’t a difficult problem, it’s just a very long and complicated process depending on how aggressive the thief was. The key to navigating that process is a proper map. In this case, the map should be a list of all your financial accounts along with customer service numbers. In the event your identity is stolen, you’ll need to call each of these accounts and notify them that your identity has been compromised.

Next, I would do everything listed in my post about do-it-yourself identity theft protection [4]. The steps explain how you can reduce the amount of personal information you make available.

This is also when you will want to be diligent in reviewing your credit reports annually [5]. If your identity is stolen, you want to catch it early and you can’t get it earlier than on your credit report. Also, Review your annual Social Security statement [6] carefully because oftentimes stolen Social Security numbers are used for employment purposes.

After Your Identity is Stolen

Fortunately, the FTC has laid out a four step process [7] for those recovering from ID theft. The four steps, which they elaborate on, are:

  1. Place a fraud alert on your credit reports, and review your credit reports.
  2. Close the accounts that you know, or believe, have been tampered with or opened fraudulently.
  3. File a complaint with the Federal Trade Commission.
  4. File a report with your local police or the police in the community where the identity theft took place.

While they only list four steps, each of those steps takes quite a bit of time and is made easier if you have a list of your accounts. If you discover your bank account has been tampered with, you will need to close that account and open a new one, with new account numbers and brand new checks.

One step I would add to the process is to change the passwords to your accounts with online access. Log in, confirm they are still secure (the phone number, email, or address on file has not changed), and change the password so they are secure and unique [8]. Do not share passwords across different accounts. This will seem like a pain but it’s more of a headache to lose your account sometime down the road because you forgot to secure it. 🙁

Billing Disputes

In the event that the identity thief racked up a large debt and you discovered this because a collection agency has called, you may want to seek legal advice as to how to respond. You should refuse to pay, as it’s not your responsibility because you didn’t rack up the debt, but you may face civil and criminal prosecution as a result of the thief’s activities. At this point, I think it’s important to secure a lawyer as they will know what to do in your jurisdiction.

Good luck and if you’ve dealt with identity theft in this way, please share your experiences and suggestions in the comments!

(Photo: Bonard [9])