Credit Card Theft- What to do if it Happens to You

By Mike Peterson
In February 24, 2015

I’ve posted quite a few articles about preventive credit card security – how to guard against hacking and skimming; how to keep your credit card information safe during the holidays, and how to protect your online identity with solid passwords.

But what happens if, despite your best efforts, your credit card information falls into the wrong hands?  What if your wallet is stolen?  What if there’s a security breach at one of your favorite retail stores?  In the event that you fall victim to credit card theft, the most important thing to do is take action quickly.

Here are the most important things you should do as soon as you learn that your credit card information has been stolen:

  • Tell your credit card company. The minute you suspect that something fishy is going on with your card, pick up the phone and let your credit card company know what’s going on.  The sooner they’re aware of the situation, the sooner they’ll be able to start monitoring your account activity – and the easier it’ll be for you to dispute any fraudulent charges.

 

And don’t forget to write down the name/telephone extension/employee ID number for the person you speak with, along with the date of your call and a couple of notes about the outcome of the conversation.  This process will require you to keep fairly detailed records, so it’s a good idea to start a file to keep everything organized.

  • File a fraud alert with one of the credit reporting agencies. A fraud alert ensures that your credit will be monitored closely.  If someone tries to use your information to, say, open a new line of credit or apply for a loan, you’ll be notified right away.  A fraud alert typically lasts for 90 days.  This is free, and it only takes a quick phone call to one of the three credit reporting agencies:

Experian: 1-888-397-3742

Equifax: 1-800-525-6205

TransUnion: 1-800-680-7289

You only need to call one of the three agencies; the agency you call will notify the other two.  What’s more, filing a fraud alert also gives you access to a free credit report from each agency, which will make it easier to monitor your credit.

  • Create an FTC Identity Theft Report. The process for creating an Identity Theft Report requires two separate steps: First, you’ll need to fill out a document called an “identity theft affidavit,” which you can find here on the FTC’s website (you can also file this document by phone by calling 1-877-438-4338).

Next, take a copy of your completed affidavit – along with your photo ID, proof of address, and a copy of the FTC’s identity theft memo to law enforcement (download it here) – to the police station and file a police report.  Make sure you get a copy of the police report for your records.

These two documents – the FTC identity theft affidavit and the police report – make up your Identity Theft Report. Once in place, this report be used to remove fraud- or theft-related activity from your credit report, and it can also help ensure that you aren’t held responsible for fraudulent charges.  It also extends your fraud alert to seven years and gives you access to a few more free credit reports, too.

  • File a credit freeze. As the name implies, a credit freeze puts a “freeze” on your credit report.  It blocks potential lenders from viewing your credit report, which in turn prevents thieves from opening new lines of credit using your name and credit information.

The process is pretty simple, and somewhat similar to the process for filing a fraud alert:  All you have to do is contact the three major credit reporting agencies, and ask for a credit freeze.  Unlike a fraud alert, however, you must contact each reporting agency individually and request a freeze – don’t assume that contacting one agency is good enough.  In most states, a fraud-related credit freeze is free, and it lasts about 90 days (to check your state’s rules, visit your state attorney general’s website).

A credit freeze doesn’t prevent you from opening new lines of credit, applying for a mortgage, buying a car, etc.  But it does ensure that any new lines of credit have to be verified by you first.  Keep in mind though, that you’ll need to keep monitoring your credit activity – a credit freeze won’t prevent thieves from making purchases with a stolen card.

  • Monitor, monitor, monitor. Once you’ve filed all of your reports and alerts, you should be in pretty good shape – but that doesn’t mean you can completely let your guard down. Keep an eye on all of your accounts and watch for suspicious activity.  Change your passwords and verify your contact information for all of your online accounts, from banking and credit cards to online retailers.  Take advantage of those free credit reports.

Credit card theft isn’t something anyone likes to think about – but it’s much less scary if you know what steps to take and what reports to file if it happens to you. The more damage control you can do early on, the better off you’ll be – and the more likely you are to remain in control of your finances.

Mike Peterson

Mike is the author of “Reality Millionaire: Proven Tips to Retire Rich” and he has been published in a variety of local and national publications including Entrepreneur Magazine, Deseret Morning News, LDS Living Magazine, and Physicians Money Digest. He holds a B.S. in business administration from the University of Phoenix.