In the wake of Equifax’s massive data breach, millions of Americans are
more worried than ever that their personal information could be
used for fraudulent purposes.
The company is offering free credit monitoring for one year to
those whose data got exposed, and while it’s certainly a good
idea to monitor your credit through Equifax or another
credit-monitoring service, it’s also important to know what to do
if you notice an account or credit inquiry that you don’t
recognize on your credit report.
Stop the damage before it gets any worse
According to the Federal Trade Commission (FTC), the first step
to take after you notice that someone else has opened new
accounts in your name is to call the companies where the fraud
occurred. For example, if you notice that a scammer has used
your identity to get a Discover credit card, your first call
should be to Discover.
Ask to speak with the fraud department, and explain that your
identity was stolen. Ask that they close or freeze the account,
and change the logins and passwords for any legitimate accounts
you may have with the company. It’s a good idea to ask for a
letter confirming that they know the fraudulent account doesn’t
belong to you, that you aren’t liable for it, and that the
account was removed from your credit report. Before doing this,
the credit issuer may want to see a copy of your FTC Identity
Theft Report, which I’ll discuss in greater detail later in
Prevent any more accounts from being opened
If you notice an inquiry or account that you didn’t initiate,
the first thing I’d suggest is freezing your credit to prevent
even more fraudulent accounts from showing up.
In a nutshell, a credit freeze denies creditors access to your
credit report, whether the inquiry is legitimate or not. Since
a review of your credit is a basic requirement for opening a
new credit account, this makes it next to impossible for a
thief to open an account in your name.
You’ll need to initiate a credit freeze with the three main
credit bureaus individually — Equifax, Experian, and
TransUnion — and if you’re already a victim of identity theft,
a credit freeze is completely free. If you need to apply for
credit, you can temporarily lift the freeze, but it’s important
to note that a credit freeze doesn’t ever expire — it stays in
effect until you choose to remove it.
Alternatively, you can choose to put a fraud alert on your
credit. Instead of blocking access to your credit report, a
fraud alert simply requires lenders to take additional steps to
verify your identity before allowing you to open an account.
Unlike a credit freeze, a fraud alert only requires you to
contact one of the three credit bureaus, who is then required
to notify the others.
It’s also worth mentioning that both of these actions can be
used as precautionary measures as well if your identity has not
yet been stolen, but you’re worried that it might be in the
File an identity theft report
Before you start to do damage control, it’s a good idea to
report the identity theft to the FTC. You can do this online at
and you’ll receive an Identity Theft Report that will be very
useful throughout the rest of the process.
Essentially, an Identity Theft Report guarantees you certain
rights, and can be used to prove to businesses that your
identity was actually stolen.
Once you have an Identity Theft Report from the FTC, it can
also be a smart idea to file a report with your local police
Other damage-control steps
To be clear, not all of these steps apply to every case of
identity theft. Having said that, if your identity was stolen,
here are some of the steps you may want to take.
One major priority is to get any fraudulent accounts off of
your credit report. You can write to each of
the credit reporting agencies and explain the situation. Ask
each credit bureau to block the fraudulent information, and be
sure to include a copy of the FTC identity theft report.
Blocking fraudulent information from your credit is one of the
rights the report gives you.
If you suspect that your driver’s license number is being used
fraudulently, you can contact your DMV to report the issue and
replace your license.
If someone used your information to obtain utilities, such as
electric or cable service, contact the service provider and
explain that you’re an identity theft victim and ask them to
close the account. Since these accounts are generally not
reported regularly to the credit bureaus, your only clue may be
a credit inquiry from a utility provider.
This is not an exhaustive list, and you can read more
steps on the FTC website.
If your existing accounts have been compromised
The Equifax data breach also compromised the credit card
numbers of more than 200,000 people, who the company says will
be notified directly. And if you are notified that your credit
card numbers were compromised, my first suggestion would be to
call your credit card companies and report the situation, and
ask them to issue a new credit card (with a new number).
However, it’s also important to know what to do if you begin to
see charges you don’t recognize on your existing accounts.
Fortunately, this is a relatively painless process, as I can
tell you from experience when someone charged about $400 at a
dollar store in Kentucky on my American Express card (I have
never even been to Kentucky). By calling the fraud department
as soon as you spot the unauthorized activity and explaining
the situation, you can typically have the charges removed with
a single phone call. Ask for a letter confirming the charges
Be ready if it happens to you
As a final thought, the Equifax data breach shouldn’t be a
cause for panic. Millions of people have their information
compromised in data breaches, and in many cases, no identity
theft ever occurs. However, it’s important to be prepared by
monitoring your credit reports and accounts regularly, and
knowing what action to take if you notice anything suspicious.
Matthew Frankel owns shares of American
Express. The Motley Fool has a disclosure policy.