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Wallet stolen? Credit freeze erects a wall against fraud

Erica Sandberg

December 8, 2015

QHi Erica,

My wallet was stolen about three weeks ago (I was pickpocketed), and all of  my ID and credit cards were taken. I filed a police report, got everything replaced, and I talked to my credit card issuers to get replacements. I also followed the instruction to put fraud alerts on my credit report files. So I just pulled my credit report files again and what do I find but that someone has applied for FOUR credit cards with Discover, Citibank, Amazon and Walmart. All of these cards were denied, but I’m going crazy! I thought I was doing the right things, but I guess not. What happens if one slips in? Please tell me what do to now. — Emmanuelle

ADear Emmanuelle,

How infuriating — first  that you were robbed, but now you’re discovering that the crime continues. Unfortunately, this is common. Now that the thief has your data, he may try to use it until he runs into a brick wall. That’s what  I want you to erect.

The action you have already taken is indeed correct. The first step is to contact the police and file a report. Done. The second is to notify your credit card companies and cordon off your existing cards by changing all the account numbers. Done. And third, you add a fraud alert to your credit file. Done.

Now to reinforce everything and erect that brick wall… Ask Erica

Fraud alerts notify banks, credit card issuers, finance companies and anyone else pulling reports that they need to take special care to verify your identity before granting the loan or credit line. That usually means calling you directly. However, for the creditors you mentioned, it looks as if they didn’t even go that far. Since you never received a call, the issuers might have been sure the application was fraudulent right away.

You don’t want a persistent crook to find another way in, so create a longer-lasting blockade. The initial alert lasts 90 days, and you can renew it as desired. As you’re aware from the first time you worked with the credit reporting agencies on this matter, you just need to contact one of the agencies (TransUnion, Equifax or Experian), and they will instruct the others to add the alert.

Another option is to extend the fraud alert for up to seven years. Since you have proof that a crime occurred — that police report — you can do this, as it’s for victims of a crime, not for someone who is worried that it might happen.

Even more of a barrier, though, is a credit freeze (sometimes called a security freeze), which prevents anyone from viewing your credit report. Without that access, new forms of credit can’t be granted.

To place a freeze on your credit, contact each of the reporting agencies individually. Also know that the rules, restrictions and possible fees vary by state.

Once you have the freeze in place, it will remain in effect until you either remove it permanently or lift it temporarily so you can legitimately apply for a credit product. The agency will provide you with a personal identification number or password to end or suspend the credit freeze. A credit freeze creates an extra step to take before getting a loan or credit card, but if you want maximum credit protection, this is the way to go.

In the event that none of this works and the fraudster somehow is able to get credit in your name — but for his gain — don’t panic. You can shut it down quickly. Monitor your credit reports (you’ll get extra free reports with the fraud alerts), and if you see cards you didn’t open, call the creditors immediately, They’ll cancel the account, and you will not be responsible for any debt incurred. Evidence of the fraudulent card also  will be purged from your credit reports.

Lastly, contact the Department of Motor Vehicles for a stolen driver’s license and the Social Security Administration if your Social Security number was compromised. Identity theft is a major problem, not just in the U.S. but globally. With those documents thieves can really wreak havoc, so take all steps necessary to protect yourself now.

Got a question for Erica? Send her an email.

SEE ALSO: 7 things to do when your identity has been stolen.

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