What Is Identity Theft and What Can I Do About It?

Identity theft happens when someone uses your personal information — Social Security number, credit card numbers, bank accounts — without your permission for financial gain. It affects millions of people every year and can take months to fully resolve. But acting quickly and systematically can limit the damage and help you recover.

1. Place a fraud alert and credit freeze immediately

Contact one of the three major credit bureaus (Equifax, Experian, TransUnion) to place a fraud alert — they'll notify the other two. Consider a credit freeze, which prevents anyone from opening new accounts in your name.

2. File an identity theft report

Report the theft to the FTC at IdentityTheft.gov, which generates a personalized recovery plan and an official Identity Theft Report. Also file a report with your local police department — some creditors and agencies require a police report.

3. Contact all affected financial institutions

Notify your bank, credit card companies, and any other financial institution where fraud occurred. Close or freeze compromised accounts, dispute fraudulent charges, and open new accounts with different numbers and stronger security.

4. You're not liable for most fraudulent charges

Federal law limits your liability for unauthorized credit card charges to $50 (and most issuers offer zero liability). For debit cards, your liability depends on how quickly you report — within 2 days limits you to $50; after that, up to $500.

5. Monitor your credit and accounts for months afterward

Identity thieves often wait before using stolen information. Check your credit reports regularly (free weekly at AnnualCreditReport.com), review bank and credit card statements carefully, and consider identity theft monitoring services.

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