How to recover from identity theft

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• Once you detect fraud on your credit reports, create an identity theft report with the FTC.
• The key to recovering from identity theft is acting quickly once you detect fraud. 
• Beef up your identity protection, as identity theft victims are often targeted multiple times.

In 2022, The Federal Trade Commission (FTC) received more than 1.1 million reports of identity theft, five times more complaints than they received a decade ago. With much of our lives publicly available, identity theft can happen to even the most careful person.

Recovery can be emotionally taxing and time-consuming. So, we're here to break down steps you can take to protect yourself, take control of the situation, and prevent it from happening again.

How to recover from identity theft

The most common types of identity theft involve the use of your Social Security number to open new accounts. Of the 1.1 million identity complaints the FTC received, 37% of cases concerned an unauthorized new credit card account. Another 10% involved new bank accounts. 

Certain forms of identity theft, like synthetic identity theft or child identity theft, are harder to detect. Luckily, if someone opens a new credit card using your name, you'll be able to catch that quickly as long as you keep tabs on your credit report. A credit monitoring service may be able to help you catch identity theft even quicker. You can find our guide on the best credit monitoring services here.

Step 1: File a report with the FTC and your local police department

The first thing you'll want to do is report the identity theft instance to the FTC. This will expedite your recovery process down the road. "The information can be used by the FBI and other law enforcement agencies to identify or track down the perpetrator, as well as provide the individual with a personal recovery plan," says David Burroughs, partner at StoneTurn, a global risk and compliance consulting firm. 

You can create an identity theft report with the FTC by visiting IdentityTheft.gov. After completing a questionnaire, you'll receive a recovery plan based on your situation. This plan walks you through recovering from identity theft, tracks your progress, and provides templates for the necessary forms and letters. 

Note: While you can file a report with the FTC over the phone, you won't receive an identity theft report. An identity theft report can be helpful when you're recovering your identity. 

You'll also want to file a police report. You'll need to go to your nearest police station with the following, according to the FTC. 

• a copy of your FTC Identity Theft Report
• a government-issued ID with a photo
• proof of your address (i.e., mortgage statement, rental agreement, or utility bill)
• Evidence of identity theft (i.e., bills, IRS notices, credit reports)

Step 2: Place a fraud alert and freeze on your credit reports

"If you suspect fraudulent activity or think you may be a victim of identity theft, contact the three major credit bureaus to notify them and request a fraud alert or credit freeze to prevent any further unauthorized activity," says Burroughs. 

A fraud alert requires lenders to verify your identity before issuing you a new credit account. In contrast, a credit freeze restricts lenders from accessing your credit report if you or someone else opens an account under your name. "These alerts can help catch any unauthorized access, such as opening credit cards or taking out loans," says Burroughs. 

Get in touch with either TransUnion, Experian, or Equifax to activate a fraud alert. The credit agency will then inform the other two bureaus to add a fraud alert to your credit report. The watch will remain on your file for a year. However, you can prolong this service for up to seven years by filing an identity theft report with the police or the FTC. 

Request a fraud alert with Equifax, Experian, or TransUnion online, by phone, or by mail. 

You can place a credit freeze on your file by contacting all three credit bureaus. With an account freeze, you can continue to use your current credit cards. A credit freeze will stay on your file indefinitely, so if you apply for a new credit card or loan, you must contact each of the bureaus again to lift the freeze.  

Request a security freeze with Equifax, Experian, or TransUnion online, by phone, or by mail. 

Step 3: Contact the institutions where the fraud occurred

"Be sure to alert any companies or accounts that may have been impacted by fraudulent transactions on your behalf, including bank accounts, credit cards, and health insurance, among others," says Burroughs. If fraudulent activity appears on your credit or debit card, ask your issuer or bank to freeze or close the account and send you a new card with an updated account number. 

The Fair Credit Billing Act and the Electronic Fund Transfer Act protect consumers from assuming liability for fraudulent charges. So, if you're a victim of identity theft, be sure to dispute fraudulent charges with your financial institution to receive a refund. Remember there are time limits to dispute errors or unauthorized charges, so it's essential to notify each company promptly.

You can also report Social Security number theft to the Social Security Administration's hotline at 1-800-269-0271 or by filing a report at oig.ssa.gov/report.  

Step 4: Dispute unauthorized activity with credit bureaus

Fraudsters may use your identity to open a new credit account or take out loans. Therefore, you'll want to check your file to identify and dispute any unauthorized activity.

You can obtain a free credit report from the three credit reporting agencies through AnnualCreditReport.com. Once you've received your credit reports, scan your file for any unauthorized activities or errors. If you find inaccuracies, notify each credit bureau in writing and send documents to support your case (identity theft affidavits, FTC, police reports, evidence of the fraud, etc.). You can also contest the error via phone or on their website. 

After you mail your dispute letter to the credit bureaus, the agency will have 30 days to respond. Once the credit agencies verify the error, they will rectify the issue on your file and send you a free credit report so you can examine the change. It's worth noting that since the pandemic, credit bureaus have been slow to respond to these disputes.

Step 5: Secure your online accounts  

"It is likely you will be impacted by a data breach more than once and have your information exposed and stolen multiple times over your lifetime. So it's important to stay vigilant about protecting your information at all times," says Michael Bruemmer, VP and head of global data breach resolution and consumer protection at Experian. 

Here are some ways you can protect your digital identity.

• Activate multi-factor authentication (MFA) — MFA requires two or more forms of authentication beyond your username and password. It adds an extra layer of security to prevent fraudsters from accessing your accounts. 
• Update your passwords — If one of your passwords has been compromised, hackers may try and use those login credentials to get into your other accounts, a technique known as credential stuffing. If your accounts have been compromised, change your passwords immediately. Otherwise, experts recommend changing your passwords every three months. Your passwords should be strong, unique, and difficult to guess. 

Step 6: Change your passwords and monitor your accounts for suspicious activity

People who have been victims of identity theft are more vulnerable than those who haven't been targeted in the past. That's because once your private information has been uncovered, it's likely available for purchase on the dark web. 

As a result, you'll have to stay vigilant months or even years after the initial identity theft incident. Fortunately, at AnnualCreditReport.com, you can get one free credit report weekly through the rest of 2023.

You can also enroll in an identity theft protection service that can monitor the dark web for your information and provide identity theft insurance, usually up to $1 million. The best identity theft protection services will also provide you with personalized expert assistance if you experience more identity theft.

Take action to restore your identity 

Recovering from identity theft may not have been on your radar. But acting quickly and effectively may prevent bad actors from using your personal information to cause further damage. 

While credit-related identity theft is more common, "identity theft can occur in other areas, including medical records, tax filings, social media accounts, employment history, and even criminal records," says Josh Amishav, founder and CEO of Breachsense, a data breach monitoring platform. "Recovery often involves multiple facets of your life."

This means reporting the fraud to the necessary authorities, fortifying your online security with password changes and multifactor authentication, and keeping a watchful eye on your credit report. 

"Unfortunately, in a digital world, the opportunity, frequency, and sophistication of scams are increasing. Recognizing common schemes and proactively identifying red flags are critical to mitigating risks of identity theft scenarios and scams," says Burroughs. 

Identity theft recovery frequently asked questions

Can you fully recover from identity theft?

While you can lock down your accounts to prevent future harm to your identity, the fact is that your private information is now publicly available for thieves to use. Unless you get a new Social Security number (which is difficult to obtain), you will need to be extra careful with your identity going forward.

How long will it take to recover from identity theft?

Getting fraud removed from your credit report will take multiple months at a minimum. Other types of identity theft, such as insurance fraud, can take even more time.

Can you put a freeze on your Social Security number?

Yes, you can block electronic access to your Social Security number by calling the Social Security Administration at 1-800-772-1213 or at their TTY number at 1-800-325-0778.