Normally, I would post one to two times a week on Finance Throttle. However my wife and I recently discovered that my wife’s identify was stolen by someone who made over $1700 in Xbox related purchases back in 2021. Let’s just say it has been a busy and stressful two weeks where I couldn’t find the time to blog. Here is what happened.
We were contacted by a Debt Collector
We received mail from a debt collector saying we owed Citizens Bank just over $1,700 for a Microsoft Loan Account. Initially,we thought this was spam mail, but I told my wife to check her credit report. She checked her credit report with Intuit Mint, a net worth tracking and budgeting app. You can also use Credit Karma to view your credit score. Both apps are free. What we confirmed was one of our worst nightmares. The credit report confirmed that the debt collector letter was real. We found that a Citizens Bank account was opened in my wife’s name last year. The debt amount on the credit report matched the letter. In addition, my wife’s credit score, which is usually over 800, dropped to the mid-600’s.
We went into a panic mode and started researching what to do. It was the weekend so everything was closed. We could not contact Citizens Bank or the debt collector to find out what was going on. I suddenly remembered that I received mail from Citizens Bank a few times in the past, but I always threw it away thinking they just want us to open a free checking account with them.
A Guideline for Identity Theft
Here is a guideline on the steps to take if your identity is stolen. Make sure you DOCUMENT EVERYTHING. Who did you call? What was the name of the agent you spoke to? Note the time and date of the phone call or email? What was said in the phone call?
Step 1: (Optional) File a Police Report
Depending on how much damage was done, you may want an extended fraud alert put out. For that, you will need a police report. We opted not to call the police. We will discuss more on the topic of extended fraud alert later in Step 6 of this post.
Step 2: File a Report with the FTC (Federal Trade Commission) on IdentityTheft.Gov
The first thing you should do is to file a report with the FTC. The process is easy and takes a few minutes if you have all of the information handy. There are many questions in the online application. They will ask if the identify fraud is related to a credit card, a loan, a data breach, insurance fraud, or a tax related issue among other choices. You will need to know how much money was spent, who the debt collector is, the account number, and more. They will even ask if you have a police report. Once the application is submitted, the FTC website will give you a checklist and guide you through the process.
Step 3: Call The Financial Institution You Owe Money To
Next, we called Citizens Bank to find out as much as possible and tell them that the account is fraudulent. After being transferred from agent to agent, we finally reached the correct department with Citizens Bank. We learned that someone applied for a loan through Wal-Mart for a Microsoft All-Access account and purchased several online games along with an XBox. Citizens Bank was very nice with us and did not question our integrity. They noted that the account is fraud and told us we will be receiving mail in 7-10 business days with some documents to sign. We are still waiting for that mail.
Step 4: Contact the Debt Collector
As explained on the FTC website, the debt collector will call Citizens Bank to verify that the account is fraudulent. That is why we called Citizens Bank first. The debt collector was tougher to deal with. We told them that we did not open this Citizens Bank loan for a Microsoft Account. They asked detailed questions about who lives with us and whether or not it was possible that a family member or child ordered the Xbox. We stood by our original claim, but they kept asking us who could have ordered the Xbox. It felt like the debt collector did not believe us, but I don’t blame them. I can’t imagine what debt collectors go through on a daily basis. In the end, they said they will send us paperwork to sign.
Step 5: Report the Identify Theft to a Credit Reporting Agency
You can contact TransUnion, Experian, or Equifax. It does not matter who you call because they will transfer the information to the other agencies. We chose to dispute the Citizens Bank account through TransUnion via the Credit Karma App. You can also just visit the Transunion webpage.
Step 6: Place a Fraud Alert
Placing a fraud alert is free and can be done through TransUnion, Experian, or Equifax when you report your identity theft.
- Fraud Alert = 1 Year Alert where creditors will ask for more information, such as an ID, before opening a credit or loan account.
- Extended Fraud Alert = 7 Years. You will need a police report to file an extended fraud alert.
- Credit Freeze = No one, including yourself, will be able to apply for a loan or credit. You can unfreeze your account at any time when you need to.
How To Avoid Future Problems With Identify Theft
Now we will discuss ways to prevent this from happening. Here are 3 steps explaining how.
Step 1: Monitor your Credit Report
For years, we were checking our credit score on a monthly basis. When we suddenly stopped checking, we got robbed. If we caught the identify theft immediately, things would have gone smoother. Unfortunately, it took us 9 months to find out. Consider getting a service like LifeLock. I am not affiliated with LifeLock, but I looked into them. They offer credit monitoring and identify theft protection.
Step 2: Protect Your Hard Copy Sensitive Information
Do not throw away your bills or tax related paperwork without shredding it first. A paper shredder is not that expensive. You can get one from your local Staples, Best Buy, Wal-Mart, or online. Keep your important paperwork locked away in a filing cabinet or a safe.
Step 3: Protect Your Digital Information
There are many free online storage services like DropBox & Google Drive, but your information is not secure unless you pay for the service. Avoid using your computer or online drives to store your sensitive data. The same goes for social media. If you can keep your birthday and address private, keep it private. If you want to keep your digital data save, consider an encrypted and password protected external harddrive.
Summary
Identity Theft can sound scary. I spoke to someone who had their identity stolen and he brought me peace. While the process to fix your credit can take months, it is still a relatively easy process. It only took us 2 hours to call everyone and complete all of the identity theft reports. Now we need to sign some documents and wait for the process to work itself out. I hope you will never have to experience identify theft, but if you do, don’t stress out too much about it. Just follow the FTC guidelines and you will be fine.
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