Identity fraud is a serious issue that can occur suddenly and without warning. If you fall victim to this crime, it can take months or even years to recover from the financial and emotional impact it can have. Therefore, knowing what steps you can take to expedite the recovery process is essential.
While we do have a guide to the best identity theft protection, here are five steps you can bring to counter the event if your identity has been stolen and your financial life is severely impacted:
The long-term effects of identity theft
Identity theft isn't a flash-in-the-pan event you forget after a few months. Instead, its impact can last for months, if not years, and cast a massive shadow across your life.
There is a psychological aspect to ID theft, one that can take its toll and leave you feeling at odds with everything you previously took for granted. Being victimized by criminals in this way can cause feelings of anxiety and violation. Sleep might also be affected - the Identity Theft Resource Center found that sleep disturbance affects 41% of identity theft victims.
Financial security fears, a sense of powerlessness, and suicidal feelings also occur among identity theft victims.
Of course, identity theft also impacts victims financially. You will almost certainly find yourself short of money for a time. Borrowing from family and friends, selling possessions to cover ID theft expenses, and even taking payday loans rarely make you feel better. On the contrary, the added stress of borrowing can cause further psychological stress.
This can translate into physical illness, too. Victims of identity theft have reported everything from breathing difficulties, elevated blood pressure, and heart palpitations to fatigue, muscle aches, and even grief (of a loss of financial security, trust, and aspirations).
A timeline of identity theft recovery
Identity theft can rarely be recovered quickly. It largely depends on the type of theft you have experienced.
- Credit card fraud: the time it takes you to discover and report the scam is as long as you must wait in most cases. If you regularly check your credit card statements or have alerts on your account, this should be no more than a month. After that, credit card companies will cover the stolen credit.
- Total identity theft: with accounts opened in your name, it can take months to recover. Decreasing fraudulent bank accounts, loans, and other identity theft takes time. Proof is required that you did not set up the accounts. Undoing the damage can take years when a tax debt is also incurred, as in some cases, or other crimes are committed in your name.
Unless you're incredibly fortunate and detect identity fraud early, you're likely to spend at least a year piecing together the effects of identity theft.
How to recover from identity theft
So, how can you recover from identity theft and minimize the psychological impact?
1. Contact the fraud departments of the affected accounts
If you discover that your identity has been stolen and you become a victim of fraud, there are certain steps you should take to report the incident. First, get in touch with the fraud department at the affected banks and credit card companies. You should also contact the finance company if the scam was related to car finance or any other type of finance. Additionally, it's important to report the theft to your local police force as soon as possible. Ideally, all of these steps should be taken within 24 hours of discovering the fraud.
2. Check your statements and records
To ensure that you have a complete understanding of the fraud that occurred, it is important that you thoroughly review all your financial activity during the time period in which the fraudulent activity took place (and even some time before that). This means that you should take the time to examine your bank statements and other financial records in detail. Additionally, be sure to request any statements that may not have been sent to you. It is also important that you review all of your financial accounts, including banks, loan companies, and credit cards, as well as any online stores or PayPal accounts that you may have used during that time.
3. Detail your movements during the period of fraud
If you suspect that fraudulent activities have taken place, it is important to take immediate steps to document your actions to prove your innocence and that you were not involved in the fraudulent activity. Unfortunately, victims of fraud are often required to prove their innocence. You can use Google Maps to trace your movements and locate where you were at a particular time. Additionally, you may be able to find old receipts or your employer's clock-in data to prove that you were at work when a loan was taken out in a bank branch, for example.
4. Get legal advice from a specialist in identity theft
It's a good idea to get in touch with a lawyer and provide them with as much information as possible when dealing with fraud. Seeking legal advice is crucial since your bank will be investigating you. However, don't just contact your regular family lawyer. Instead, look for someone who specializes in identity theft and fraud. They will be able to work with your bank and any federal agencies involved, which can help reduce the stress that you may experience.
5. Contact the Identity Theft Resource Center (ITRC)
There is a free help service available from the ITRC which can provide you with nearly all the information you need to know about identity theft. They offer a comprehensive service and provide detailed steps on what you should do if you are a victim of ID fraud. Additionally, you can find information related to different scams, which can help you identify the cause of your ID theft.
Moreover, the website offers various resources, facts, figures, and a regular newsletter.
Are you affected by ID theft in the UK? Contact the Action Fraud team.
Prevent future identity theft
You've overcome ID theft. You probably don't want to go through it all again. To prevent a repeat of the months-long recovery of your identity, financials, and perhaps even your sanity and health, take steps to secure your accounts.
Stop clicking on links in unsolicited emails from your bank, loan company, PayPal, or Facebook. Instead, learn to spot fake emails, change your passwords, employ tighter security steps (two-factor authentication, where a code is sent to your phone or email when you try to log into a bank account online, for example), and remain vigilant of the risks. Know and understand how it happened the first time to reduce the chances of a repeat occurrence.
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