What You Can Do to Avoid Identity and Credit Fraud

How Fraud Can Happen

Credit fraud and identity theft can take many forms, but all involve abuse of your personal information, such as:

• Social Security numbers
• Driver's licenses or other government-issued photo IDs
• Credit card, debit card and other account numbers
• Passwords to social media, e-commerce and banking account sites

Some of the ways criminals hijack personal data include:

• Phishing: Using email, phone, text or social media, criminals pose as trustworthy companies or authorities and try to trick you into disclosing personal data. Keep in mind that unsolicited contacts aren't always who they say they are.
• Data breaches: Hacking into commercial computer records can furnish criminals with batches of personal data, which they may abuse themselves or sell to other crooks.
• Physical theft: Stolen wallets expose credit cards and ID information that fraudsters can use to hijack your credit.

Learn more: Types of Identity Theft and Fraud

How to Protect Your Personal Information Online

While you can't absolutely avoid the risks of having your identity stolen, you can protect yourself. The best way to reduce your risk of credit fraud is to be vigilant and protect your information online. Here are some tips for safeguarding your data.

• Secure your electronic devices and home network. Keep phone and computer software up to date to ensure you have the latest security safeguards. Also make sure your internet router has the latest security options, that your home network is encrypted and that its settings are optimized.
• Develop good online security habits. Create strong passwords, using unique passwords for each account and changing them often. When available, take advantage of multifactor authentication, which confirms your identity via voice call or text message as part of your account login.
• Don't share your credit card information. Avoid storing credit card numbers on e-commerce sites to limit potential damage in case someone steals the password to your online shopping.
• Watch your back. Be smart about online shopping by avoiding public Wi-Fi and taking care that others can't observe or eavesdrop on your account numbers or other personal information.

Learn more: How to Avoid Avoid Identity Theft While Online Shopping

What to Do if You Believe You're a Victim of Fraud

The following steps can help minimize the damage if your stolen personal data is used to attempt or commit fraud.

1. Place a Fraud Alert or Security Freeze on Your Credit Reports

You have the right to place a fraud alert and/or security freeze on your credit reports, which can help protect your credit and avoid fraud.

• A fraud alert instructs lenders to verify your identity before processing any credit applications received in your name.
• A credit freeze restricts access to your credit report so lenders cannot check your credit in connection with new credit applications.

Either of these measures can protect you from criminals attempting to obtain credit in your name and then damaging your credit scores when they fail to repay. (See a comparison of fraud alerts and credit freezes below.)

Tip: It's possible to place both a fraud alert and a security freeze on your credit reports, but doing so isn't generally necessary, since a credit freeze will block credit checks related to new credit applications, preventing creditors from seeing the fraud alert.

2. Report Identity Theft to the FTC

The Federal Trade Commission (FTC) website IdentityTheft.gov provides an interactive form for reporting identity theft and links to resources relevant to your complaint. The site also produces an Identity Theft Victim's Complaint and Affidavit you can give law enforcement and use to place an extended fraud alert on your credit reports.

3. Review Your Credit Reports

Check your credit reports from all three national credit bureaus (Experian, TransUnion and Equifax) for signs of unfamiliar accounts or credit applications. Each account listed on your credit report should include contact information for the creditor that you can use to inquire about any suspicious entries. As appropriate, let the creditors know the activity was unauthorized and ask them to investigate.

You also have the right to dispute credit report information with each credit bureau. By filing a dispute, you're requesting to have unauthorized or inaccurate activities corrected or removed from your credit reports.

4. Look for Additional Signs of Fraud

If you believe (or know for sure) that fraudsters have obtained your personal data, it's important to look beyond credit reports for signs of fraud and report them as appropriate:

• Review bank and credit card statements for unauthorized transactions.
• Check for your personal information on dark web sites. An identity theft monitoring service such as one included in an Experian premium membership can provide alerts if your personal data appears on dark web sites.
• Check your IRS and Social Security accounts. Set up a personal IRS account and Social Security user account if you haven't already, and check for indications that your tax refunds or benefits are being claimed without your knowledge. If you're told an account already exists when you try to set up a new one, you should contact the relevant agency and report potential fraud.

5. Contact Creditors and Financial Institutions

If you believe a fraudulent account has been opened in your name, or discover unauthorized transactions, notify the relevant creditors and financial institutions immediately and ask them to investigate.

6. Notify Appropriate Authorities

Identity theft and identity fraud can take many forms, and it's important to notify the appropriate law enforcement agencies for the type of crime you've experienced. If you share your FTC complaint and affidavit with local authorities, they may refer you to appropriate state and federal agencies and/or use the information to coordinate their activities with other agencies.

7. Change Passwords

If any account information turns up in dark web scans, or you receive information about a data breach at any company or institution where you have an online account, update your passwords immediately. Even if you don't think your data is compromised, changing passwords regularly is good practice, as is using a free password manager that generates and stores secure and unique passwords for you.

Fraud Alert vs. Credit Freeze

Fraud alerts and credit freezes are two of the best ways to avoid fraud and protect your credit. There are multiple differences between fraud alerts and security freezes, but the basic rundown of the two credit protection measures are as follows.

How to Place a Fraud Alert

You can request a fraud alert by contacting any of the three national credit bureaus (Experian, TransUnion or Equifax) online, by phone or by mail.

Placing a fraud alert online through Experian's Fraud Alert Center is quick and convenient. When you place a fraud alert on one of your credit reports, the other two credit bureaus will be notified and an alert placed on those reports as well.

1. Visit Experian's online Fraud Alert Center.
2. Log in or register for a free Experian account.
3. Select the type of fraud alert you want (an initial alert, extended fraud victim alert if you're a victim of identity theft or an active-duty alert). You'll be prompted to enter your phone number, which Experian will include in your fraud alert for lenders to use to verify your identity. You can opt not to include a phone number by leaving this field blank.
4. Follow the prompts on screen to place a fraud alert. If you're placing an extended fraud alert, you'll be instructed to upload supporting documents electronically or by mail.

How to Place a Fraud Alert by Phone or Mail

While Experian's online service is the quickest and most convenient way to place a fraud alert, you can also place a fraud alert by contacting Experian by mail or phone.

• To place a fraud alert through the mail, write to:

  Experian
  P.O. Box 9554
  Allen, TX 75013

• To place a fraud alert over the phone, call Experian's toll-free phone number: 888-EXPERIAN (888-397-3742).

How to Freeze Your Credit

Placing a security freeze differs somewhat at each of the three national credit bureaus, but all three bureaus enable you to apply and remove freezes online, by phone or by mail. Note that unlike a fraud alert, you must place and remove a credit freeze with each credit bureau individually.

When setting up a security freeze, be prepared to provide the following information to verify your identity:

• Your full name
• Date of birth
• Addresses you've used in the past two years
• Social Security number
• A copy of a government-issued ID, such as a driver's license, passport or state identity card.

The Bottom Line

Vigilance is the key to minimizing risk of credit fraud. Be skeptical of unsolicited communications purporting to be from government agencies or financial institutions, especially if they ask or pressure you to disclose personal information. Experian offers a wealth of advice to help you recognize and avoid frauds and scams, and also offers many resources in case you become an unfortunate victim.