Steps you can take to help repair your credit
Fraud and identity theft can be serious personal and financial challenges. Fortunately, when it comes to credit cards, you have protection. The law limits your financial liability to just $50, and many credit card companies will even waive that amount.
Still, fraud — and especially identity theft — can cause a lot of frustration. To help prevent fraud, see How to keep your credit card safe. If you suspect fraud, here’s how you can identify the problem — and find help.
Dealing with credit card fraud.
Fraud generally refers to the unauthorized use of one or more of your credit card accounts. You usually discover fraud when:
- Your credit card is lost or stolen
- You find unfamiliar charges on your billing statement
- You get calls or letters about things you didn’t buy
- Your credit card company’s fraud department contacts you to question a charge
What to do if you’re a victim of fraud.
If you suspect fraud on your account, contact your credit card company immediately. They will be able to:
- Help you verify whether fraud has occurred
- Remove charges that you or anyone authorized to use your card did not make
- Close down your account to prevent more fraudulent transactions
- Issue you a new account number and new card, and transfer your old information to the new account
It’s also a good idea to check your credit report to be sure there’s nothing else that looks suspicious. In most cases, the involvement of law enforcement will be coordinated with your financial institution.
Dealing with identity theft.
Identity theft is a particular type of fraud in which a thief uses your personal information to set up new accounts or get other benefits in your name. Though it’s not as common as other types of fraud, it can be more challenging and costly to correct. Some signs of identity theft are:
- Not receiving bills or other mail you should be getting
- Receiving credit cards you didn’t apply for
- Being denied credit for no apparent reason
- Getting calls or letters about things you didn’t buy
- Being served court papers or arrest warrants for things you know don’t involve you
Never assume that such unexplained occurrences are just a mistake — always look into the details to find out for sure.
What to do if you’re a victim of identity theft.
There are a lot of good resources available to help you deal with the many possible effects of identity theft. These resources include the Federal Trade Commission and the three credit reporting agencies, as well as your bank or credit companies. They can provide detailed information on how to deal with particular issues involving different types of identity theft.
Generally, you should be sure to:
1. Contact all of your financial institutions immediately so they can protect your existing accounts either by closing them or by adding passwords. Be sure to check every account at every company.
2. Place a 90-day fraud alert on your credit report. This will help keep anyone from opening accounts in your name without your permission.
- When you alert one credit reporting bureau, they’ll notify the other two, who will then contact you for more information.
- Review your reports carefully, looking especially for accounts you don’t recognize, and correct any inaccurate information.
- Check your reports periodically to make sure all changes you requested have been made, and that no new accounts have showed up.
- Consider placing an extended 7-year alert on your accounts by filing an Identity Theft Report with the credit reporting companies (see ftc.org for details).
3. Freeze fraudulent accounts. You’ll need to contact every company that has a fraudulent account in your name (including, if necessary, phone companies and other utilities) and have them freeze the account.
4. Keep good records. Fixing identity theft means you’ll need to show which accounts are yours and which aren’t. You should also keep copies of every communication with creditors and credit reporting agencies as you try to repair the problem.
5. Consider reporting the crime to the police. If you choose to report the crime, be sure to get a copy of the police report, which can help prove your case as you work to repair the damage. Without a police report, you will have a harder time correcting information about accounts that have been fraudulently opened in your name (see ftc.org for details).
6. File a complaint with the Federal Trade Commission. They don’t help resolve individual problems, but filing a report can be helpful in dealing with law enforcement, and in correcting fraudulent accounts.
Above all, act quickly.
Knowing what to do if fraud strikes is just part of the challenge. Fast action can limit the damage and make it easier to restore your good name. You can catch fraud earlier by checking your account frequently for unfamiliar activity, and reviewing your billing statement carefully each month. In this case, your caution is well worth the effort.
If you are a victim of identity theft:
You can find the three major credit reporting agencies online — each has helpful information:
- Equifax fraud division: 1.800.525.6285; www.equifax.com
- Experian fraud division: 1.888.397.3742; www.experian.com
- TransUnion fraud division: 1.800.680.7289; www.transunion.com
To file a complaint with the Federal Trade Commission or to get free information on consumer issues, including how to deal with identity theft, visit ftc.gov or call toll-free, 1.877.382.4357.
What's next? Protecting your personal and financial information