Turbo Takeaways
- Identity theft involves someone illegally opening accounts or making charges in your name.
- Due to fraudulent charges, you can incur debt from identity theft, but you shouldn’t have to pay the balance.
- Once you discover identity theft, immediately report it to multiple sources, including the Federal Trade Commission (FTC).
Do You Have To Pay Debt from Identity Theft?
Identity theft can land you in debt. However, you shouldn't have to pay for it.
Identity theft occurs when someone else uses your personal information to open accounts and make purchases in your name. Since you didn't agree to these charges, it becomes illegal and is considered theft.
When you discover fraudulent charges on an account, alert authorities immediately. You shouldn't have to pay the debt, but you will have to work to prove it's not yours. Consider working with an attorney experienced in consumer fraud.
Identity theft could cause you to spend funds on legal fees, investigations, and other activities as you work to restore your credit. This is the frustrating part that can cost you money out of pocket or lead to debt in certain cases.
Did You Know?
Experts agree that you shouldn't pay any debts incurred by the thief. Instead, you should debate these charges and file reports with multiple agencies.
How Do You Know If Your Identity Has Been Stolen?
Identity theft is easier to spot if you frequently check your financial activity and look for anything that seems strange. Stay vigilant by reviewing bill statements and credit reports.
Here are some signs you may be a victim of identity theft:
- Fraudulent charges on your credit card statement
- Unknown withdrawals from your bank account
- Denied credit applications for no clear reason
- Suspicious bills from debt collectors
- Unfamiliar accounts on your credit statement
You should also start checking accounts if you’ve been involved in a data breach that could compromise important personal or financial information like credit card numbers. Companies may notify you if they’ve experienced a data breach, but unfortunately, that isn’t always the case. This is why it’s crucial to regularly review your records to avoid financial loss.
What Should You Do If You Discover Identity Theft?
Discovering identity theft can be an unnerving and frustrating experience. Here are four recommended steps to take if it happens to you:
Step 1: Report It
Once you discover you've been the victim, create an identity theft report with the company where the fraud occurred. Next, file a report with the FTC, plus the three major credit reporting agencies (Experian, Equifax, and TransUnion). This creates an official record of the theft.
You can also create a police report to alert local authorities. Start by visiting identitytheft.gov for guidance on the process of reporting and stopping identity theft. Additionally, you may want to contact your credit card issuers to alert them of the chance of fraud on your accounts.
Step 2: Freeze Credit
A credit freeze means you stop the ability to open new lines of credit under your name unless you take specific and verified steps. This is a way to safeguard your identity to ensure fraudsters can't open any new accounts. You're more likely to preserve your credit history and score when you put this protection in place.
Step 3: Change Passwords
Another essential part of your recovery plan is to secure accounts by changing all passwords. You may also need to change usernames for sensitive accounts. This is a time-consuming but essential security measure after discovering fraud and theft in your name.
Step 4: Check Accounts
Check your credit history to review fraudulent accounts and dispute charges. Appeal to have items removed that are not your own doing. Continue to monitor your credit closely, even months after identity theft occurs, in case the thief tries to continue using your name to commit fraud.
How Do You Avoid Debt from Identity Theft?
If the dreaded event happens and you find your identity stolen, here are some ideas to help you avoid going into debt:
Dispute Charges Immediately
Once you discover identity theft, contact the agencies where the fraud occurred. For instance, if it happened through a credit card account, call the card company right away. Most organizations have their own fraud departments to help you navigate the process.
It’s also important to alert the three major credit bureaus to begin protecting your credit history.
Don't Pay Fraudulent Charges
Legal experts urge consumers not to pay fraudulent charges due to identity theft. They say paying a debt that's not yours only makes it harder to deal with creditors. Instead, report the theft and produce these documents for affected creditors and lenders.
Monitor Credit To Detect Further Fraud
The final step to avoid debt from identity theft is to monitor your credit history. Unfortunately, once your identity is stolen, you're more at risk of it happening again. That's why this step is essential even long after you discover and stop the fraud.
You can pay a service or monitor credit on your own using a legitimate site like AnnualCreditReport.com. Look for any new credit cards or unauthorized charges. Track your credit score to analyze any changes due to theft.
Keep Your Identity Safe from Threats
As scammers find more ways to access key information from consumers, debt from identity theft is a growing concern. If you find yourself in this situation, consider seeking legal assistance or the advice of a financial expert as you try to report and combat fraud.
Continue to watch for further fraudulent activity and secure sensitive data, such as passwords, as you work to restore your credit history.
Falling prey to identity theft is a frustrating process that requires time and effort to restore your credit and remove debts. You should not have to pay debts that you never incurred, which is why it's essential to let creditors know you're a victim as soon as you discover the theft.
Beware of scams and keep a close watch on your financial records and bank statements to spot potential theft. Be careful about where and when you provide personal identifying information, such as a Social Security number, to stay less vulnerable to identity thieves. Even medical records can be used to steal your identity and commit fraud.
You can avoid debt from identity theft by monitoring your financial records, reporting debt as soon as you discover it, and refusing to pay faulty charges.
Make a Plan to Pay Off Debt with TurboDebt®
Paying off unsecured debt is one way to maintain a strong financial record before or after you've encountered identity theft. If you're struggling to pay huge credit card bills or high-interest personal loans, now is the time to consider debt relief with a trusted partner like TurboDebt®.
Our customized and affordable plans can provide the support you need to pay off unsecured debts for good! With over 20,000 positive reviews on Trustpilot and Google, we've helped thousands of consumers reset their finances and overcome debt.
It only takes a few minutes to find out if you qualify. Contact our debt relief experts today to start your free consultation!