Between my friends at USAA and the things I read on social media, it is obvious that there has been a huge uptick in credit card fraud this spring. However, sometimes what looks like simple credit card fraud is actually a sign of a larger problem: identity theft. There are many types of fraud that fall under the catch-all of identity theft, including:
- credit card fraud,
- unauthorized withdrawals from bank accounts,
- false applications for new credit,
- fraudulent use of social security numbers,
- using false information for medical care and/or insurance reimbursement,
- other creative, false use of personal information.
If you or someone in your family has had your credit card compromised, you need to look carefully to determine if this is an isolated incident or if it is an indicator of a wider problem.
Close or Suspend The Problem Account
Obviously, the very first step is to close or freeze the account where you know there has been fraudulent activity. Each financial institution or company will have their own procedures. Most will include closing the account that has been compromised and opening new accounts. Change all passwords and PINs.
Place A Fraud Alert or Credit Freeze on Your Credit Reports
Consumers are entitled to place a free, 90 day fraud alert on their credit reports with the big three credit bureaus by making a simple phone call to just one of the credit bureaus. Here are the telephone numbers to call:
- Equifax 1‑800‑525‑6285
- Experian 1‑888‑397‑3742
- TransUnion 1‑800‑680‑7289
Inform the credit bureau that it appears you have been the victim of identity fraud, and ask them to put a credit fraud on your account. This will make it harder for anyone to open fraudulent accounts, and give you a free copy of your credit reports from each of the credit bureaus. While on the phone, ask how to obtain these free credit reports. Also ask for documentation of your fraud alert status to include in your files.
If you already have enough information to be sure that your information has been compromised, you can put a credit freeze on your accounts. A credit freeze means that all new accounts will be denied unless you take extra steps to temporarily un-freeze the account before making the credit application. Credit freezes must be handled individually through each of the three credit bureaus, and there may be fees associated with freezing and unfreezing your credit, depending on the situation.
While it doesn’t feel like a police report will accomplish anything, documentation is helpful, especially if the fraudulent activity continues or spreads. If your identity has been compromised, and not just a single credit card, you can also file an identity theft report with the Federal Trade Commission.
Check Your Credit Reports
After placing an initial fraud alert, you are entitled to a copy of your credit report from each of the three major credit reporting agencies. Take advantage of this opportunity to go through your credit report and see if anything looks wrong. Look for accounts you don’t recognize, or personal information that is incorrect, such as an address or employer that isn’t yours.
Review Bank Statements
It’s always a good idea to review your bank statements each month, but it is easy to skip that step when everything is going well. If you suspect your identity may have been compromised, take the extra time to review statements for all your financial accounts, and investigate anything that looks odd.
Thankfully, most banking fraud is simple credit card fraud. While credit card fraud is annoying, it is simple to resolve. Identity fraud is a much larger problem and can be messy to fix. Either way, taking the right steps from the start will make the process that much smoother.