How to Investigate Identity Theft

If you're a victim of identity theft, you need to act quickly to contain the damage. This is, literally, a drop what you're doing and pick up the phone situation. Then it's time to undo the damage, making sure you keep careful records along the way.

Spotting identity theft
First off, you need to know what identity theft is and what it isn't. If someone has opened accounts in your name, known as application fraud, or used your credit card or bank account without your consent, known as account takeover, then you are a victim of identity theft.

Security breaches, which frequently make the national headlines, are not necessarily identity theft, though they do leave you vulnerable to it. In a security breach, you'll often hear that your personal information has been "exposed," which means that thieves have stolen credit card numbers or other data from a secure location. Until they use that data to access your accounts or file fraudulent applications, you're not a victim of identity theft.

Fixing a security breach
Breaches are easy to contain if you act quickly. First, contact the three credit bureaus (Equifax, Experian and TransUnion) and place a fraud alert on your account. This will freeze your account to any new credit applications without your specific authorization. Next, contact your bank and credit card companies. If there hasn't been any unauthorized activity, the solution could be as simple as changing your PIN, though most institutions prefer to cancel your existing credit and debit cards and send you new ones.

The final step is to order your free annual credit reports from each of the credit bureaus and check them for any signs of fraudulent activity. You can get these right away, but it's better to get one at a time over the course of a few months, since thieves may wait before trying to use your information.

What to do in case of identity theft
First off, don't expect a call or letter telling you that you're a victim. You need to review your credit card and bank statements each month to keep an eye out for suspicious charges. You should also get your free annual credit report from the three credit bureaus to be certain that accounts aren't being opened in your name.

If you spot identity theft in your statements or credit report, here's what to do:

1. Contact the three credit agencies, and request that a fraud alert be placed on your account. This will prevent the thief from opening further accounts in your name. In theory, requesting a fraud alert from one bureau will do the trick, but it's best to talk to all three to be safe. Get a transaction number and be sure to write it down. You should also request that the credit bureaus mail you a confirmation that states a fraud alert has been activated.
2. Request a copy of your credit report from each credit bureau to check for fraudulent charges and accounts. No need to stagger them out, get them all at once and report any fraudulent information that you find.
3. Contact every creditor who holds one of your accounts, including banks, credit card companies and lenders. You'll also need to contact any lenders who opened new accounts for the thief. Request that these accounts be closed, and then follow up with a certified letter outlining the nature of the fraud and including any proof that you have of the fraud (a credit card/bank statement, etc.). Keep a copy of your proof, the letter and the certified mail receipt.
4. Ask if any additional paperwork needs to be filled out. Some lenders have specific forms that you'll need to complete. Ask them to mail a letter verifying that your accounts have been closed. Most banks will replace your ATM card within 24 hours and replacement credit cards usually arrive within a week.
5. Contact the Federal Trade Commission (FTC) to report your identity theft. They have an online database that's accessible to law enforcement, and they also investigate complaints about how companies have handled your report of fraudulent activity.

   To gain the maximum benefit from your report, be ready to supply information about:

   -The type of theft you suffered

   -Details of the theft itself

   -Any information you know about the thief (if applicable)

   -The steps you took to deal with the fraud

   -Any fraudulent information that you found on your statement

   -Specifics about the accounts opened/used and the charges made

   Once your complaint form is complete, print out a copy for your records.

6. File a report with your local police department. This serves two purposes: It provides you with more documentation of the incident and it alerts local authorities to the crime. Be sure to bring a copy of the complaint form that you filed with the FTC. This will allow the police to fill out the law enforcement section of this form for you, and it will provide them with a lot of the details of the crime.

   Request a copy of the completed police report, and add it to your files along with the FTC complaint form. This will give you the evidence that you need to dispute charges, should a creditor give you a hard time.