Identity theft

What It Means

Identity theft is when someone uses your personal information, such as your name or account numbers, without your permission. Thieves use it to open new credit accounts in your name, run up charges on accounts you already have, or cause trouble elsewhere: the FTC lists debt collectorsDebt collectorA person or company that collects debts owed to someone else, such as a collection agency, debt buyer or collection lawyer, limited by the FDCPA. See more, government ID, utilities, student loansStudent loanMoney borrowed to pay for college or career school, repaid with interest after you leave school; it comes from the federal government or a private lender. See more and medical care among the areas it can reach. The Federal Trade Commission runs IdentityTheft.gov, where victims report it and get a personal recovery plan.

How People Say It

• "I got a welcome letter for a card I never applied for."
• "Someone opened a phone account in my name."
• "My info was in that breach, so I froze everything."

The Breakdown

A short example. Jen gets a welcome letter for a store credit cardStore credit cardA credit card offered by a retailer, either usable only at that store or co-branded with a card network, often with store discounts and a higher APR. See more she never applied for. She calls the store, gets the account closed, and assumes that's the end of it. Two months later a collector calls about a phone plan opened the same week.

Where it goes wrong. One fake account was the part Jen happened to see. The FTC's first steps are about finding the rest: placing a fraud alertFraud alertA note on your credit report asking lenders to verify your identity before opening credit; you place it at one bureau, which must tell the other two. See more, pulling all three credit reportsCredit reportA record of how you've borrowed and repaid, kept by credit bureaus and sold to lenders, landlords, insurers and others who decide whether to deal with you. See more, and reporting at IdentityTheft.gov, which builds a recovery plan and an Identity Theft Report she can use with each company and credit bureauCredit bureauA company that collects information about how people use credit and sells it as credit reports; Equifax, Experian and TransUnion are the three nationwide ones. See more.

What to do, in order

1. Call the fraud department of any company where you know fraud happened. Ask it to close or freeze the account, and change your logins, passwords and PINs.
2. Place a free one-year fraud alert with one credit bureau, which must tell the other two, and get your credit reports. The FTC says to freeze your credit too if you haven't already.
3. Report it at IdentityTheft.gov, or call 877-438-4338, to get your Identity Theft Report and recovery plan.
4. Close new accounts opened in your name and ask each business for a letter saying the account isn't yours and you aren't liable for it.
5. Write to each credit bureau with your Identity Theft Report and proof of identity, and ask it to block the fraudulent information.

Good to Know

The CFPB says a credit bureau must block fraudulent information within four business days after getting your request with an identity theft report, and must tell the company that supplied it. According to the FTC's recovery plan, its Identity Theft Report is enough for the bureaus and most companies; the CFPB also suggests reporting to local police, and the FTC says a police report matters most when you know who did it or a company asks for one. A freeze stops new accounts but, as the CFPB notes, it doesn't stop a thief taking over accounts you already have. Watch for scams that copy this advice: the CFPB warns that the FTC never threatens you or tells you to move money to "protect it," withdraw cash or buy gold.

Related Terms and Categories

• Credit freeze

  A free block you place on your credit report at each bureau so lenders can't read it for a new application until you lift it; also called a security freeze.

• Fraud alert

  A note on your credit report asking lenders to verify your identity before opening credit; you place it at one bureau, which must tell the other two.

• Credit report

  A record of how you've borrowed and repaid, kept by credit bureaus and sold to lenders, landlords, insurers and others who decide whether to deal with you.

• Phishing

  A scam where someone sends an email or text that looks like it's from a company you trust, to trick you into giving up passwords, account numbers or other details.

• Credit monitoring

  A service that watches your credit reports and alerts you to changes, such as a new account or inquiry; it warns you after the fact and doesn't prevent fraud.

• Credit lock

  A bureau's own service that blocks access to your credit report, much like a freeze, but under the company's terms instead of federal freeze law, sometimes for a fee.

Debt and credit