How to Recover From a Financial Security Breach

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There are different types of security breaches or identity theft. It can wreak havoc on your credit. And, unfortunately, some breaches can hurt your child’s future credit too. Knowing what can happen is one thing, but if a breach does occur, it’s essential to know what steps should be taken to clean up the mess.

But what can you do if your computer has been hacked and your identity stolen? You must act quickly, and there are numerous steps to take.

Act Fast to Fix the Fraud

Contact the fraud department of your bank or credit union and explain to them what happened. They‘ll issue you a new debit card and have you choose a new PIN. They’ll also monitor your accounts.

Contact the fraud department of all your credit cards.

You'll also want to place a fraud alert with the credit bureaus. It’s free to do. You need only contact one. The one you choose is obligated to tell the other two. This fraud alert will stay on your credit report for one year. But you can renew the alert when it expires.

You can also apply an extended fraud alert that lasts for seven years.

Change all your passwords. This includes any social media accounts you have. Every password needs to be unique.

Monitor all your bank and financial accounts. You’ve notified the bank, but you should also be vigilant.

Pull your credit reports from one of the three. These are Experian, TransUnion, and Equifax. Keep a close eye on them. You specifically want to see if any new accounts have been opened using your name.

Remember your investments. Contact your broker or account manager and explain the situation.

Contact the Federal Trade Commission

The Federal Trade Commission (FTC) has a website, IdentityTheft.gov that can help you. It’s a resource for identity theft victims. It will provide you with sample letters and checklists to help you through the recovery process.

Any actions you take to recover will be easier if you provide an FTC Identity Theft Report. You'll also want to report the crime to the police department. Ask for a copy of the police report.

Use the FTC Report

If you see that new accounts have been opened that you didn’t authorize, call these companies’ fraud departments.

Explain that someone stole your identity and ask the business to close the account. Provide them with a copy of the FTC Report to verify your claim.

Once you’re told the account has been closed, ask the business for a letter. You'll want it to say the fraudulent account isn’t yours. It also must read that you’re not liable for any charges, and it was removed from your credit report.

Make sure you write down who you contacted as well as the date.

If these bogus accounts have already appeared on your credit report, send a letter to every credit bureau. (Here is a sample letter.) Include a copy of the FTC Report and proof of your identity. Explain which information in the report is the result of identity theft.

Freeze Credit File

A credit file freeze is more inconvenient than a fraud alert. If you freeze your credit at all three bureaus, it prevents creditors from looking at your credit.

For example, if a scammer goes to open a credit card account or take a loan out using your credit, the creditor will not be able to check your credit score or history. That stops the thief.

The downside to this measure is that if you want to allow a lender to view a frozen credit report, you'll have to take action. It requires you to unfreeze or thaw your credit reports temporarily.

Stop Debt Collectors

If the thief has used your credit to open accounts and purchase goods, you might be hearing from debt collectors.

Write to the debt collector within 30 days of receiving the collection letter. (Here is a sample letter.) Let them know someone stole your identity and send copies of the FTC Report and any other documents to them.

Write down who you contacted and the date.

Child Identity Theft Recovery

Your children and grandchildren are not immune to a financial security breach.

Check to see if your child has a credit report. Generally, children don’t have credit reports. But if someone uses their information for fraud, they may have one.

Contact and open fraudulent accounts and explain that your child is a minor and can’t enter into legal contracts.

You‘ll want the company to send you a letter informing you that the child isn’t liable. You’ll need to send a follow-up letter. Include the FTC Report and a copy of your child’s birth certificate.

Write down who you contacted and the date.

Take Action Quickly

The key to a financial recovery is to act quickly. If you suspect you’ve been compromised, change all your passwords and contact your credit card companies and financial institutions.

Always file an FTC Theft Report if you discover that your fears are founded.

The Epoch Times copyright © 2023. The views and opinions expressed are those of the authors. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. The Epoch Times does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. The Epoch Times holds no liability for the accuracy or timeliness of the information provided.