The threat of identity theft and financial fraud looms larger than ever before as society continues to evolve into the online world. These threats driven by cybercriminals and scammers can have lasting effects on our digital and physical lives, impacting our finances and emotional well-being. When money is lost or bank accounts and credit cards become compromised, it requires an extraordinary amount of effort to try to resolve the situation. The same goes for any emotional toll taken - victims often feel violated and anxious about how or when the situation can get resolved. This article will dive into the topic of identity theft, identity recovery, disputing fraudulent charges, and offer insights as to how you can reclaim your identity.
Fraudulent Charges and Identity Theft: What You Need to Know and Do
Fraudulent charges occur when transactions are made on your credit card, bank card, or any other financial account without your consent or knowledge. Fraudulent charges can be part of the larger crime of identity theft, which involves the stealing of sensitive personal information, such as bank account information, Social Security numbers, or others. These two issues often overlap, as seeing fraudulent transactions on your behalf is a telltale sign of broader ongoing identity theft.
The impact of identity theft and unauthorized fraudulent charges made on your accounts can be devastating. There may be financial consequences such as taking on unexpected expenses, having to improve your credit score, or facing difficulties when needing to secure some type of loan. You could likely feel stress or anxiety about the situation and it could take a real tole on your mental well-being. You may also face issues with the government or the IRS when it comes time to file your taxes. Below is a guide you can use if you need to dispute fraudulent charges, go through the identity recovery process, and take proactive measures to protect your identity from incidents in the future.
Step 1: Identifying Fraudulent Charges
Spotting the Signs of Fraudulent Activity
The best defense against financial fraud is a good offense. Perform regular reviews of your financial statements and credit card bills so you can detect unauthorized activities as soon as they appear. Lookout for the following signs:
- Unfamiliar charges: Carefully comb through each transaction on your financial reports and through your online account activities. Look for charges you don't recognize, especially small amounts. Notice the date, merchant name, and transaction amounts, and make sure you have a recollection of the charge.
- Questionable account activity: Stay alert for unusual activities on your accounts. These could be anything from new account openings to changes in your personal information.
- Small charges: Small and seemingly insignificant charges could be a sign of financial fraud or identity theft. Researchers from ReasonLabs’ Threat Intelligence Center authored a credit card scam report where they found fraudsters were making small monthly charges on stolen credit cards that went unnoticed.
- Charges from strange locations: When you see transactions from unfamiliar locations or merchants you do not recognize, exercise caution. It’s better to be suspicious and do a manual check of the location before dismissing the charge.
- Duplicates: Having duplicate charges on your account is another sign of possible fraud. Always double-check and contact the merchant if you find a double charge.
What to Do First
You must act fast once you discover a suspicious activity that you think could be a fraud. Consider the following:
- Freeze your credit cards or accounts: Contact your bank immediately and have them place a freeze on your accounts. This should prevent further unauthorized transactions from taking place.
- Change your passwords: Change the passwords for all your online accounts. This is especially important for your bank, email, and social media accounts.
- Utilize fraud alert tools: Take advantage of an Identity Theft Protection tool, like that of ReasonLabs, to get alerts when suspicious activities occur on your accounts.
Step 2: Disputing Fraudulent Charges
Contacting Your Bank or Card Issuer
Reporting fraudulent charges to your bank or credit card issuer is an absolute must-do. You should contact either of them as soon as possible by phone, email, or through their online support channels. Make sure you compile any relevant documents that can back up your claim of fraud. These could include receipts, account statements, or specific communications you might have had with a supplier or merchant.
Filing a Fraud Dispute
After you make your initial report to your bank or credit card issuer, you should then file a formal dispute. Every bank has a slightly different process when filing an official dispute, many of which can easily be found on their website or with the help of a customer support agent. Again, be sure to keep your records organized so you can return back to them as needed.
Understanding Your Rights
In the United States, various consumer protection laws are in place to protect your rights in case of fraudulent charges. One specific law is the Fair Credit Billing Act (FCBA). The FCBA limits your liability for unauthorized charges to $50 if you report the loss or damages before unauthorized charges are made.
Step 3: Reclaiming Stolen Identity
Reporting Identity Theft to Authorities
Reporting identity theft to authorities should be nonnegotiable. In the United States, you can report identity theft to the Federal Trade Commission (FTC) at IdentityTheft.gov. Doing so will create an Identity Theft Report - a critical document that you will need when you begin to try and recover your identity. Following your outreach to the FTC, you should take the time to contact local law enforcement and provide them with information about your case. Filing a police report will help them gain knowledge and understanding about the scam, potentially leading to an arrest or capture of the scammer in the future.
Contacting Credit Bureaus
Safeguarding your credit is an essential part of identity recovery. You should contact the three credit bureaus, Experian, Equifax, and TransUnion, to have them place fraud alerts, as well as credit freezes, on your reports.
Monitoring Your Accounts and Credit
If you monitor your accounts and your credit score frequently, you will know about potential issues as soon as they arise. Regularly obtaining your credit report is easy and free from any of the bureaus listed above. Identity Theft Protection and other cyber security services should also be utilized so you can get real-time alerts of any suspicious activities on your accounts.
Preventing Future Fraud And Identity Recovery
Proactive Steps for Fraud Prevention
Preventing future fraud by taking proactive steps for fraud prevention is critical to make sure you don’t fall victim to identity theft again.
- Enable 2FA and use strong passwords: When you are creating passwords, use strong and unique combinations for all your online accounts. Enabling 2FA will also give you an added layer of security.
- Don’t use public Wi-Fi without a VPN: If you must use public Wi-Fi, use a Wi-Fi VPN to enhance your privacy and security.
- Software updates: Be sure to install next-gen antivirus software and keep your apps and operating system up to date to avoid using unpatched systems.
- Look out for phishing scams: Exercise caution when you receive suspicious emails, texts, or phone calls that request sensitive personal information.
Using Identity Protection Tools To Fight Financial Fraud
The fight against identity theft and online fraud is made possible by many different types of systems and tactics. Using identity protection tools will give you an extra layer of security that many scammers cannot beat. ReasonLabs’ Online Security platform can protect you and your devices from advanced cyber threats and digital scams.
Take Control: Dispute Fraudulent Charges and Protect Your Identity
Jumping into action as soon as you suspect foul play by disputing fraudulent charges and reclaiming your identity. By staying vigilant, taking proactive measures, and taking advantage of an array of available resources, you can significantly reduce your risk of becoming a victim of financial fraud and identity theft. For more information visit ReasonLabs.com.
