You get a call from your bank to find out that thousands of dollars have been racked up in mysterious charges – charges you didn’t make. Several bank accounts have been set up in your name and no matter who you report to, it’s impossible to get ahead of the thieves.
It’s a story that can happen to anyone.
Nearly 1.4 million Americans were victims of identity theft in 2020, it’s been called “the fastest growing crime in the country.” If it can happen to one of the most powerful lobbyists in Florida, Ron Book, it can happen to you too.
Book lost more than $5,000, but his case is extreme. A Debt.com survey found that most victims lose up to $1,000.
There are two easy and free ways to protect against identity theft – fraud alerts and credit freezes. But a new survey from LendingTree found that only about 2 in 10 Americans use those protections.
“I think that part of why so few people have [credit freezes or fraud alerts] is that they may not know about them or they may not fully understand what they do,” LendingTree’s chief industry analyst, Matt Schultz, told Debt.com. “It’s important for people to understand that nobody cares as much about their credit and their money as they do.”
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Free and easy, but no one’s doing it
Credit freezes are the most extreme but effective option. They prevent everyone, including yourself, from accessing your credit reports and make it impossible to open a new line of credit in your name. To initiate a freeze, you must contact each of the three major credit bureaus (Equifax, Experian, and TransUnion).
You don’t have to be a victim of identity theft to initiate a freeze and you can remove it anytime.
Fraud alerts are the less extreme method for protecting against identity theft. They don’t lock your credit but require that all lenders verify your identity. Fraud alerts are usually issued when identity theft is already suspected and lasts for seven years.
Freezes and alerts are completely free to implement.
“It’s certainly easier than it used to be and it’s certainly less time-consuming. Because it used to take potentially a couple of days even to end the credit freeze in particular,” Schultz says. “But now, all of this stuff can happen a lot more quickly. And it’s a lot less of a burden to implement and undo than it used to be.”
A free tool can save a lot of money
Fraudsters often use their victim’s credit cards to cash out, according to the Federal Trade Commission, making these tools extra helpful. In credit card payments alone, Americans lost $149 million in 2020.
“Identity theft can wreck your credit and can cost you a lot of money,” Schultz says. “It’s really important for people to keep an eye on these things.”
If both options still feel extreme, you can monitor your credit freely through providers like LendingTree, Experian, and Credit Karma.
Regularly checking your credit card statements and checking accounts can help you notice out-of-place charges sooner than later. Make a point to frequently review your credit score and credit report – dramatic changes could be a sign of identity theft.
“It’s difficult enough to have good credit,” Schultz says. “The last thing you want is for somebody’s malicious acts or somebody’s mistake to be working against you.”
