The threat of identity theft is ever present, even when you work carefully to keep your personal and financial information protected. The risk of being a victim of identity theft remains high as data breaches of company and government information continue to expose sensitive data that could be used to commit fraud.
An estimated 7 percent of U.S. residents 16 years or older were victims of identity theft in 2012, with most victims experiencing credit card or bank fraud, according to the U.S. Bureau of Justice Statistics. To add insult to injury, 14 percent of identity theft victims said they reported financial losses of $1 or more with less than half claiming they lost more than $100.
As consumers try to find ways to protect their information and prevent themselves from becoming victims, they benefit from knowing what are the right steps to take after their credit card information has been stolen and accessed illegally.
What Should I Do If I Become a Victim of Credit Card Fraud?
When you suspect fraudulent activity on your credit report or other banking statements, you should contact your bank and one of the three main credit reporting bureaus. Report the theft of your credit card immediately to your bank and request that it cancel your current card. In case your card has been stolen, request a new card to prevent more fraudulent charges.
After canceling the stolen card, the Federal Trade Commission recommends that you tell a credit reporting company that you believe you are a victim of fraud and then proceed to describe the errors you may have discovered. You could be put into contact with the credit reporting bureau's fraud department.
How Does Credit Card Fraud Affect My Credit?
With access to your personal identifying information, such as a Social Security number, identity thieves can open up new lines of credit in your name and make fraudulent transactions. There are several scenarios in which identity theft can impact your credit score. If identity thieves completely clean out or overdraw a bank account, this can leave victims unable to pay their existing bills and cause late fees, lowering their credit score.
How Long Does It Take To Resolve Credit Issues?
Since the credit reporting companies have to investigate the claims and the potential errors that were made, it may take a while before these claims are resolved. While more than half of the identity theft victims in the BJS survey said they were able to resolve issues with fraud in 24 hours or less, others reported their problems were not settled for a month or longer.
You should also take time to contact businesses where thieves may have made purchases and obtain records of the transactions so the companies can begin the process of correcting errors, according to the FTC. The FTC said businesses that are alerted to fraud by a credit reporting company have 30 days to investigate and respond to the claims. Businesses that confirm fraudulent transactions are required to notify the credit reporting company and then the credit file can be changed. In addition to the these organizations, identity theft victims may want to contact the FTC and law enforcement authorities to file a report.
After the claims are resolved, the credit reporting bureau should send you a letter confirming the changes to your credit file.
What Should I Do to Avoid Credit Card Fraud In the Future?
While it's difficult to prevent credit card fraud – because you often need to give your personal and financial details to banks, health care providers and other businesses – there are steps you can take to limit the threat of identity theft and fraud. Make sure you frequently check your credit report for errors and suspicious activity such as a new credit line you don't remember opening and quickly report any fraud you see.