Identity fraud is a significant risk that we face on a daily basis. Unfortunately, similar to death and taxes, it is inevitable. Even though you can take every precaution to protect your personal information at home, there is always a possibility of your bank being hacked. 

If your identity has been stolen, what should you do? How can you determine if you are a victim of identity fraud? And what are the next steps you should take?

Your ID might have already been stolen

There is a strong chance that your ID has already been stolen. Over the years, a large number of data breaches have resulted in millions of records of data being leaked on the internet. Bank details, PayPal accounts, social media logins, mortgage applications, even medical records – pretty much every type of data you can think of has been leaked. These events occur thanks to hackers finding vulnerabilities in data servers, exploiting these, and reaping the rewards.

Meanwhile, there's the risk of phishing from emails, SMS, and instant messaging. With one wrong click, you're taken to a spoofed website designed to look like a bank or online store, and you end up submitting your details to a scammer.

On top of this, you have the problem of targeted theft, either via purse snatching, dumpster diving (for discarded bank statements and letters), or even direct theft of your documents.

In terms of being involved with a data breach, you can check this by visiting Have I Been Pwned. Enter your email address (check them all if you have more than one) to see if your records have been leaked.

Then, change your password.

With regards to ID theft overall, let's take it as read that your identity has been stolen somehow. What happens next?

How to tell if you are an ID fraud victim

We constantly face the risk of identity theft, often without realizing it. However, there are warning signs to watch out for.

• Unexplained credit or debit card charges
• Missing statements
• Declined credit card
• Refusal of a new loan
• Calls from debt collectors

Some indications that you might be a victim of identity fraud are the unexpected reception of unfamiliar packages, which could be the scammers trying to get them before you do, and unauthorized access to your social media accounts, particularly Facebook. The consequences of identity theft are almost always disastrous and can have long-lasting effects.

What happens when someone steals your ID?

Usually, identity theft occurs wholly online. First, your records are traded and available to crime groups to browse, like a catalog, on the Dark Web. Then, with massive databases available to search for likely targets, automation is used to target thousands of potential victims at once simultaneously. This is how phishing operations work. 

However, there are occasions when identity theft happens offline, or data gathered from the internet is used in a physical context. For example, rather than pose as you online, an identity thief may claim to be you at a bank or use your details to try and buy a car (perhaps with the help of a counterfeit driving license).

The end game is always to get as much money as possible, as quickly as possible, before moving on, leaving you none the wiser. It is unusual for ID fraud to occur over more than a few weeks – after all, once the credit card statements arrive, the game is up. However, targeted identity theft can occur over a more extended period, particularly for high-income “marks.”

Whatever the intricacies of the case, identity theft is highly distressing. Finances are left in tatters, and reputations are potentially ruined. Long-standing relationships and marriages have been damaged and worse by identity theft.

Overcoming identity theft

There are two sides to coping with identity theft:

• Rebuilding your finances
• Dealing with the emotional impact

Getting your finances back on track is perhaps the most straightforward. Banks, credit card companies, and other creditors have procedures to deal with victims. 

1. Contact your banking company (and other creditors) to report missing cards and fraudulent activity. 
2. Contact credit reference agencies such as Equifax and Experian. They can place an ID fraud alert on your reports.
3. Victims in the USA should contact the Federal Trade Commission (FTC) to complete the Identity Theft Affidavit and receive verification of the ID theft. 
4. UK victims can contact Action Fraud.
5. Contact your local police force to report the theft when physical documents have been stolen.

If you have been a victim of ID theft, you should not be liable for the stolen money. ID theft mustn't be down to your own mistakes, which is why it is vital to maintain reasonable security practices. 

The emotional impact of identity theft is another matter entirely. 

Fortunately, you're not alone. Several services are available for you to contact to help you come to terms with the upheaval that ID fraud places on your life.

US readers can get in touch with American Consumer Credit Counseling (ACCC), which specializes in financial education and related services.

If you're in the UK, seek counseling using the Counseling Directory. The Citizens Advice Bureau is also helpful, although its advice may be more instructive than comforting. 

Do not let ID fraud ruin your life

Many of us have experienced identity theft, but not all of us have been hit by identity fraud. If you have had your credit card stolen or misused, this is bad enough, but identity fraud can have much more serious consequences. 

If you have been a victim of identity fraud, you know how much work is required to deal with the crime. There will be forms to fill out, phone calls to make, and weeks of uncertainty. You may be wondering if the money will be refunded, if the perpetrators will be caught, and whether you will be able to handle the upheaval. 

Identity fraud can turn your life upside down. It is important to take advantage of every law enforcement service, banking action line, and counseling resource available to help you report, resolve, and get through it.

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