Identity Theft Protection: Safeguarding Your Financial Identity

What Is Identity Theft?

Identity theft happens when someone uses your personal information to:

• Open credit accounts
• File fraudulent tax returns
• Get medical treatment
• Commit crimes
• Steal from your existing accounts

The damage can take months or years to repair.

Types of Identity Theft

Financial Identity Theft

New account fraud:

• Opening credit cards in your name
• Taking out loans using your identity
• Opening bank accounts

Existing account fraud:

• Taking over your current accounts
• Making purchases on your cards
• Draining your bank accounts

Tax Identity Theft

How it works:

• Thief files return using your SSN
• Claims fraudulent refund
• Your legitimate return is rejected as duplicate

Warning signs:

• IRS notice about return you didn't file
• Rejection of e-filed return
• IRS letter about unreported income

Medical Identity Theft

The thief:

• Gets medical treatment using your insurance
• Files false insurance claims
• Obtains prescriptions

Dangers:

• False medical history in your records
• Insurance benefits exhausted
• Incorrect medical information could affect treatment

Synthetic Identity Theft

Criminals create a new identity by:

• Combining real SSN with fake name
• Building credit over time
• Disappearing after maxing out credit

Often targets:

• Children (unused SSNs)
• Elderly (less monitoring)
• Deceased individuals

How Your Information Gets Stolen

Data Breaches

Your info may be exposed from:

• Major retailer breaches
• Financial institution breaches
• Healthcare provider breaches
• Government database breaches

You likely already have info exposed. Most Americans have had data compromised in at least one breach.

Phishing and Social Engineering

Tricked into providing:

• Login credentials
• Account numbers
• Social Security number
• Personal details

Physical Theft

Stolen or accessed:

• Wallet/purse
• Mail (especially financial documents)
• Tax documents
• Medical records
• Trash (dumpster diving)

Skimming

Card information captured at:

• Gas pumps
• ATMs
• Point-of-sale terminals
• Card readers

Dark Web Markets

Your stolen info is sold:

• Credit card numbers: $5-$20
• SSN with birthdate: $10-$30
• Full identity package: $50-$200
• Medical records: $100+

The Credit Freeze: Your Best Protection

What a Credit Freeze Does

A credit freeze:

• Blocks access to your credit reports
• Prevents new accounts from being opened
• Doesn't affect your existing accounts
• Doesn't hurt your credit score
• Is FREE by law

How to Freeze Your Credit

You must freeze at all three bureaus:

Also freeze at:

• ChexSystems (checking account verification)
• NCTUE (utility verification)
• LexisNexis (employment/background checks)

Managing Your Freeze

When you need credit:

1. Temporarily lift ("thaw") the freeze
2. Apply for credit
3. Re-freeze after application

Options for lifting:

• Lift for specific creditor
• Lift for specific time period
• Lift permanently (not recommended)

Keep your PINs/passwords safe. You'll need them to manage freezes.

Freeze vs. Lock vs. Alert

Recommendation: Use free credit freezes. Locks offer convenience at a cost but aren't more protective.

Monitoring and Detection

Free Monitoring Options

Paid Monitoring Services

What they typically offer:

• Credit monitoring at all three bureaus
• Dark web monitoring
• Identity theft insurance
• Recovery assistance

Are they worth it?

• Most monitoring features are available free
• Insurance coverage is often limited
• Recovery assistance can be valuable
• Consider if you've already been a victim

Warning Signs of Identity Theft

Watch for:

• Bills for accounts you don't have
• Collection calls for debts you don't owe
• Credit report entries you don't recognize
• Missing mail (especially financial)
• Denied credit unexpectedly
• IRS notices about unreported income
• Medical bills for services you didn't receive
• health insurance denials for "pre-existing conditions" you don't have

Protecting Your Information

Social Security Number

Minimize exposure:

• Don't carry your SS card
• Only provide SSN when absolutely necessary
• Ask why it's needed and if alternative ID works
• Never give SSN over phone to unsolicited caller

Documents and Mail

Secure handling:

• Shred financial documents
• Opt for paperless statements
• Use informed delivery (USPS)
• Collect mail promptly
• Consider locked mailbox

Online Security

Mobile Security

Phone protection:

• Lock phone with biometrics/PIN
• SIM lock to prevent SIM swapping
• Review app permissions
• Avoid storing sensitive info in notes
• Enable remote wipe capability

Protecting Children's Identity

Why Children Are Targets

Child identity theft is attractive because:

• SSNs have no credit history
• Often not discovered for years
• Clean slate for criminals

May not be discovered until:

• Child applies for student loans
• First job (IRS notices)
• First credit application

Protecting Child Identity

Proactive steps:

• Check if child has a credit report (shouldn't exist)
• Consider child credit freeze (laws vary by state)
• Guard child's SSN carefully
• Teach children about identity protection
• Monitor for signs (unexplained mail, calls)

If Identity Theft Happens

Immediate Steps

Act quickly:

1. Contact fraud departments

   • Credit card companies
   • Banks
   • Other affected institutions

2. Place fraud alerts

   • One bureau notifies others
   • Lasts one year

3. Freeze your credit

   • All three bureaus
   • Prevent further damage

4. Get credit reports

   • Review all three
   • Document all fraudulent accounts

Formal Reporting

Create your recovery foundation:

1. File FTC Identity Theft Report

   • IdentityTheft.gov
   • Creates personalized recovery plan
   • Generates affidavits

2. File police report

   • Local jurisdiction
   • Bring FTC report
   • Get copy of report

3. IRS (if tax fraud)

   • Form 14039
   • Identity Protection PIN

Dispute Fraudulent Accounts

For each fraudulent account:

1. Send dispute letter to creditor
2. Include FTC affidavit
3. Include police report
4. Request account closure
5. Request confirmation in writing

For credit bureaus:

1. Dispute inaccurate information
2. Include supporting documents
3. Bureau has 30 days to investigate
4. Follow up until resolved

Extended Fraud Alerts

After identity theft:

• Request extended fraud alert (7 years)
• Provides ongoing protection
• Creditors must verify identity before extending credit

Recovery Timeline

Expect:

• Initial crisis management: 1-2 weeks
• Disputing fraudulent accounts: 1-3 months
• Credit report correction: 1-6 months
• Full resolution: 6-18 months (complex cases longer)

Document everything:

• Keep copies of all correspondence
• Log all phone calls (date, time, person, outcome)
• Save all documentation
• Track time spent (may be needed for damages)

Prevention Checklist

The Bottom Line

Identity theft is a growing threat, but a credit freeze—which is free—blocks the most damaging form: new account fraud. Freeze your credit at all three bureaus today. Layer on monitoring through free services, protect your sensitive information, and stay alert for warning signs. If theft occurs, act quickly: report to the FTC, freeze credit, file police report, and dispute fraudulent accounts. Recovery takes time but is achievable. The best protection is prevention—and that starts with a credit freeze.