Identity theft is when your personal information is stolen, and subsequently used by a fraudster to pose as you. They may open financial accounts in your name—hurting your credit or stealing your money in the process.
How does identity theft work?
Identity theft is extremely common and can unfortunately happen in many forms, including: data breaches, online accounts being hacked, credit card skimmers, or even something as simple as a stolen or lost wallet.
How do I spot identity theft?
Luckily, identity theft can be easy to spot as long as you monitor your accounts regularly. Someone will open an account in your name, or you will receive a letter from an organization saying that your information was exposed in a data breach. An example includes receiving a notice from a bank or credit union thanking you for your recently opened account with them.
Many credit card companies and banks also frequently monitor for fraudulent purchases and may alert you if your identity has been compromised. It’s also important to frequently monitor your credit reports from all three major credit reporting bureaus to quickly see if any unknown accounts appear.
This acts like a virtual “watch dog” on your profile and requires anyone asking the bureaus for your credit information to take extra steps before authorizing new accounts. A fraud alert lasts for one year. If your identity is severely compromised, you may also request an extended alert, which lasts seven years. This will help you to identify where any fraudulent accounts may be so that you can close them.
