Identity theft occurs when someone intends to use your stolen information to commit fraud through activities such as applying for credit cards, filing taxes, or receiving medical services. Oftentimes, identities are taken through stolen driver’s licenses, social security numbers, or medical information. According to Javelin Strategy & Research, over $16.9 billion were lost just last year from identity fraud. Here are key signs you should be vigilant of when it comes to identity theft and what you should do if you find that your identity has been stolen.
There are warning signs to be aware of in cases of identity theft. Once your identity has been stolen, the thief has access to important information they can use to charge your credit cards, open new accounts, or steal your finances. It is always important to monitor your accounts for unfamiliar activity and follow-up on anything that looks out of place. In addition, here are some clues that your identity has been stolen:
Sometimes, you aren’t aware of identity theft until you get a notice from the IRS about issues with your tax return. If you receive a letter from the IRS, be alert that you could’ve been a potential victim of identity left. Here are some scenarios that help you know if you’ve been a victim of identity theft:
While the impacts of identity theft depend on the type of fraud committed and how long it was occurring before you noticed, there are steps you can take immediately to try to mitigate the situation once you discover you’ve been a victim of identity fraud.
Your first step is to call the companies you know where fraud occurred, explain the situation, and freeze and secure your accounts by changing your logins and passwords. Proceed to place a fraud alert at one of these three credit bureaus which will notify the others:
At this point, you should also consider reporting the identity theft to the Federal Trade Commission which can help you create a recovery plan with multiple steps to help you resolve the problem. Once you make an account, they also follow-up by helping you track your progress and pre-filling forms and letters for you. You can begin the process by accessing and completing their online form or calling 1-877-438-4338.
Your next steps are to go about repairing the damage. To ensure that you are thorough in this process, make sure to review your credit reports often and consider adding extended fraud alerts or credit freezes. Close any new accounts that were opened and go through fraudulent charges on your accounts and remove them by contacting customer service. There are different entities to contact in different situations. For example, those experiencing tax identity theft should complete an IRS Identity Theft Affidavit (Form 14039) and follow-up with the IRS for assistance if the situation isn’t resolved.
There are additional steps you can take, depending on the specific situation you are in. Reference the Federal Trade Commission’s guide for more information on replacing government IDs, dealing with false criminal charges, or find account-specific steps to take to clear up different cases of identity theft.
Put safeguards in place to give yourself a sense of security by taking simple precautions such as shredding documents with personal information, protecting personal information on calls and over the internet, and practicing safe online habits. Keep track of your activities by monitoring your credit and keeping an eye on monthly statements. When it comes to taxes, remember that the IRS will never initiate contact with you by email, text, or social media to request personal information, PINs, or financial information and will never call to threaten you with lawsuits or arrests. Dealing with identity theft can be a scary and stressful situation, but there are clear steps you can take to resolve it and protect yourself.
Our Individual Tax professionals may be able to help you repair the damage after having your identity stolen. We are here for you.
David Schaffer, CPA
Partner, Kruggel Lawton CPAs