THE BLOG
02/11/2014 12:02 pm ET | Updated Apr 13, 2014

Restoring Your Identity in Crisis

In my last posting, I explained how to protect your identity - primarily by being vigilant about where and how you use your credit cards, and by frequently checking your accounts online. But sometimes identity theft happens - and it's not your fault. It could be an insecure system at a merchant, such as the highly publicized breach of card data at Target. Or you could be the victim of an outright mugging, where your wallet is stolen. Then you need to know how to restore your identity.

Javelin Strategy & Research has just released the 2013 identity theft figures and they are staggering. There were more than 13.1 million victims of identity theft in 2013, and "takeover fraud" accounted for 28 percent of all identity fraud. That is, the thieves didn't just use victims' cards to make purchases; they actually opened new credit accounts in the names of their victims!

Those data breaches became more damaging. Javelin reports that one in three people who received a data breach notification letter subsequently became an identity fraud victim. And that can be an overwhelming feeling. There is help available however. You just need to know where to start. And you can be prepared in advance, which will make the process easier.

There are two steps in the process of dealing with potential identity theft - steps that go beyond the simple regular monitoring of your accounts online that you should already be doing. The first involves cancelling your current cards and freezing your credit, as well as monitoring for any intrusions that are the result of identity theft. And the next involves repairing any damage that is done.

Shutting Down Current Credit

You are generally 100 percent covered for fraud on your credit card accounts, if you report the loss promptly to the card issuer. But if your wallet is stolen, you'll be left with the difficult task of remembering all the cards in it that render you vulnerable. So the first step is to sit down right now and take every card out of your wallet. You may decide that you shouldn't be carrying so many around with you. For example, there is no reason to carry your Social Security card in your wallet. And you may remove other cards that you don't use frequently.

Then make a list of every item in your wallet, including not only your driver's license and credit cards, but your bus or transportation pass, your employee ID card, and your Medicare and health supplement cards. (Sadly for seniors, who must carry a Medicare card, their social security number is prominently displayed on the card.)

Keep this list in a secure place at home or at the office, and be sure to include not only the credit card numbers and expiration dates, but also the toll-free number on the back of the card that you must use to report fraud. You don't want to have to go digging through bills to find the phone number to report fraud!

Then, contact the three major credit bureaus through www.AnnualCreditReport.com, the government-mandated site that offers you a report from each bureau every year. After reviewing your report for evidence of unauthorized activity, you should immediately put a freeze on your credit, so no new accounts can be opened.

And make a police report, so that you will have proof that you are an identity theft victim. Then there will be no charge for freezing your credit, and you may have coverage for any potential costs on your homeowners or auto insurance.

Getting Help

If you have been a victim of a breach, you may be offered credit monitoring services, to make sure there are no attempts either to use your old cards fraudulently, or to open new credit in your name. Take advantage of these offers. You can also get this service at CreditKarma.com, which gives you free monitoring of your credit report and notifies you of any changes. But monitoring services only advise you of attempts to create <> entries on your credit report, not the use of existing cards.
Many services offer more comprehensive protection - at a cost of $9 per month, or more. But they scan internet records to see if your name, address, or Social Security number have been used to open new accounts, or change mailing addresses on existing accounts.

There are also two very helpful resources that will work with you as an individual to limit the fraud and restore your identity:

If the potential identity theft involves one of the major financial services companies that support this organization, they will offer the services of ITAC, the Identity Theft Assistance Center. But you must be referred by your participating financial institution, such as a bank, credit union, or credit card issuer.

This non-profit organization takes calls directly from consumers who have an identity theft problem. You can visit online or call them directly at 888-400-5530. Their services are free of charge. The Identity Theft Resource Center receives thousands of calls every month, and victims are immediately connected to a representative who will assist them in reporting identity theft, and restoring their identity. Once the process is started, you retain the same representative who will follow your case, and help you with a step-by-step solution process. Of course, they cannot actually do the filings for you with banks, mortgage companies, and insurers. But they do have form letters that you can download to fill in the blanks and send on to your credit grantors. They offer services in both English and Spanish.

Eva Velasquez, President of the Identity Theft Resource Center stresses that they will help anyone, regardless of income, noting that "the new reality of crime is that you are more at risk of identity theft than a physical crime" and stressing the need "to monitor fiscal, as well as physical security."
In this new era of identity theft, that is certainly The Savage Truth.