Identity Theft

Identity theft summary:

• If someone steals your identity, they could use your information to take out loans, open credit cards, file a false tax return, or even pretend to be you. 

• Keep your personal information, such as Social Security and account numbers, private to protect yourself from identity theft. 

• Monitor your financial accounts and credit reports to catch scammers and reclaim your identity. 

• Freeze your credit with all three credit bureaus. It’s very difficult for fraudsters to open accounts in your name if creditors can’t check your credit.

Identity theft definition and meaning

Scammers can ruin your good name and steal your money by applying for loans, credit cards, or government benefits or draining your financial accounts using your personal information. You might not find out you’ve been a victim until you apply for a loan and are turned down because of a low credit score or negative marks on your credit history—or until you hear from a debt collector about an unpaid balance. 

Key concept: Identity theft happens when someone uses your name and personal identification to open accounts. It’s a serious threat to your personal finances, and if you’re a victim it could take a long time to reverse the damage. 

More on identity theft 

Identify theft is when a scammer gets access to your name, address, Social Security number, or other personal information. Theft can happen in several ways:

• Stealing your mail 

• Getting you to respond to scam texts, emails, or phone calls

• As part of a data breach from a company you do business with 

• Overhearing you provide your information in a public place

Scammers could then use your information to open credit card and loan accounts, file a false tax return in your name to claim your refund, or even seek medical care in your name. They could even get access to your existing bank account and steal your money. 

Identity theft: a comprehensive breakdown

To prevent identity theft, take fast action. It’s possible to have your personal information stolen through no fault of your own—major companies fall victim to data leaks and hackers. Embracing these prevention tactics could help. 

• Freeze your credit. Get in touch with the three consumer credit bureaus (Experian, TransUnion, and Equifax) and freeze your credit so no one can apply for new accounts in your name. When you want to apply for a loan or a credit card, you can temporarily unfreeze it. 

• Monitor your credit reports. Check your credit reports a few times a year at annualcreditreport.com. It’s free, and you can check weekly. If you spot activity (like new accounts) that isn’t yours, you’ll know to sound the alarm. 

• Read your statements. It’s easy to delete those emails or throw away those paper statements for bank, credit card, and loan accounts, but review them to make sure all the transactions are legitimate. 

• Protect your personal data. Keep your Social Security number private. Don’t respond to phishing texts or emails from bad actors pretending to be employees at companies you have accounts with to get your information. Shred personal mail and documents when you’re done with them. 

Recovering from identity theft 

If you’ve had your identity stolen, it’s time to act: 

• Set up fraud alerts. Ask one of those three credit bureaus to put a fraud alert on your account and they’ll also tell the other two. If you have a fraud alert in place, businesses will get in touch with you to make sure the person applying for a loan or other credit is really you.

• Contact companies where fraud has occurred. Ask them to close or freeze accounts, and change your log-ins and passwords. 

• Report identity theft. Go to IdentityTheft.gov to file a report with the Federal Trade Commission. This government agency can help you make a plan to recover your finances after identity theft. When you report identify theft, you might also want to file a police report, as it can also help you recover and will serve as a sworn statement of a crime.