If you notice that someone opened a credit card in your name, you will need to report the fraudulent transactions or accounts to the credit card company. You may also consider reporting the incident to the Federal Trade Commission (FTC).
Fraud is a common occurrence. According to the U.S. Federal Trade Commission, consumers lost $8.8 billion to fraud in 2022.1 Unsuspecting victims of fraudulent accounts and identity theft may be left stressed when they don’t know what to do. Fortunately, there are several steps you can take to rectify fraudulent accounts on your credit card quickly and efficiently.
Understanding How Fraud Occurs
Fraudulent activities, especially in the realm of credit, can occur in various ways. Being aware of how these scams operate is the first step in safeguarding your financial information.
Here’s an overview of common methods used by fraudsters and the scams borrowers should be vigilant about:
Methods of Fraud
There are several ways that fraud can occur. You may try to avoid credit card scams and protect your data, but you may still be a victim of fraud due to data breaches or skimming devices. Learn about some common fraud methods below:
- Phishing Scams — Fraudsters often use emails, phone calls, or text messages posing as legitimate institutions to trick you into providing personal information. For example, you may get callers claiming to be from government agencies or financial institutions, demanding immediate action or payment. According to Astra, nearly 1.2% of all emails sent are malicious.2
- Data Breaches — Large-scale data breaches can expose your sensitive information, making it accessible to identity thieves. If there is a data breach, you will be informed by the company.
- Skimming Devices — These are devices installed on ATMs or card readers to capture card information and PINs. Before using any machine, take a look to make sure it hasn’t been tampered with. If you notice a device that looks suspicious, inform the bank or store manager immediately.
- Mail Theft — Stealing monthly credit statements or new cards directly from your mailbox is another common tactic. If you have mail with your personal information, make sure to shred it before throwing it away.
- Fake Credit Card Offers — Scammers may send offers for fake credit cards or loans, asking for an upfront payment or sensitive information.
- Impersonation Scams — Calls or emails claiming to be from government agencies or financial institutions, demanding immediate action or payment.
- ‘Too Good to Be True’ Offers — Offers that promise incredible rewards or guaranteed approval regardless of credit history are often red flags. For example, you may see bad credit loans that promise guaranteed approval for large loan amounts.
What To Do When Someone Opens a Credit Card Account in Your Name
If you have found that someone has opened an account in your name, you will want to take action right away. Below are the steps you will want to take if you find yourself in a situation where someone else has set up a credit account in your name.
| Step | Action to Take | Details |
| 1. Immediate Action | Contact the Credit Card Company | Inform them about the fraudulent account as soon as possible. |
| 2. Report the Fraud | File an Identity Theft Report | Report the incident to the Federal Trade Commission (FTC) and consider filing a police report for added documentation. |
| 3. Credit Protection | Place a Credit Freeze or Fraud Alert | Request a credit freeze to restrict access to your credit report, or set up alerts to require identity verification for new credit requests. |
| 4. Review Credit Reports | Check Your Credit Reports | Obtain your free credit report from each of the three credit bureaus and review them for any other fraudulent activities or discrepancies. |
| 5. Dispute Errors | Contact Credit Bureaus | Report any inaccuracies or fraudulent accounts to the three credit bureaus: TransUnion, Experian, and Equifax. |
| 6. Document Everything | Keep Records | Maintain detailed records of all communications, reports, and actions taken, including dates, names, and summaries of conversations. |
| 7. Monitor Your Accounts | Regularly Check Credit Card Statements | Keep an eye on your credit card statements and bank accounts for any unauthorized transactions. |
| 8. Follow-Up | Stay Informed | Continuously follow up with your credit card issuers, credit bureaus, and any legal authorities involved to ensure the matter is fully resolved. |
Contact Your Issuer’s Credit Card Fraud Department ASAP
All major credit card companies have an entire department dedicated to correcting credit card identity theft and fraud. If you feel you are a victim of credit card identity theft, you will want to contact your credit card issuer immediately and inform them of the fraudulent account. Be sure to have the letter, email, or other evidence that led you to believe that someone has opened a credit card account in your name.
When you do contact your credit card issuer, make sure the contact information on the issuer’s website matches up with any contact information given in the letter or email that indicates a fraudulent account was opened in your name. If they are different, the letter or email you received may be a phishing or credit card scam. In this case, contact your credit card issuer directly.
When contacting your credit card issuer, keep track of each time you’ve made contact, with whom you spoke with, and a summary of what was discussed during your call. If you are communicating with your card issuer via email, be sure to save all messages, so they don’t get accidentally deleted.
Report the Identity Theft to the Proper Authorities
After you have spoken with your credit card issuer, you will next want to contact the Federal Trade Commission, also known as the FTC.
The FTC is a government agency that is dedicated to protecting U.S. citizens and businesses from third-party business practices that may be deceptive or unfair. They also seek to protect consumers against wrongful business practices and methods of competition by enforcing the law, advocating for moral business practices, as well as through research and education.
An FTC agent can help you document your fraudulent account. They may also be able to use your identity theft report to issue you a free credit freeze if that is what you would like to do.
There are also other resources offered by credit reporting agencies to help consumers report and dispute fraudulent information.
There are three major credit reporting agencies, those three credit bureaus are:
- TransUnion
- Experian
- Equifax
Consider Signing Up for Future Fraud Alerts or Freeze Your Credit Card
It may be in your best interest to request that your credit card issuer freeze any existing accounts while they investigate the credit fraud. That way, you won’t have to worry about racking up more wrongful debt in your name.
A credit freeze is simply a hold on your credit card and is not the same as closing a credit card account. When you freeze your credit card, your account still technically exists; it just can’t be used by you or anybody else to make purchases or transactions.
Freezing your financial accounts can be quite useful when protecting your finances from fraud, identity theft, or even a stolen credit card.
What Is an Initial vs. Extended Fraud Alert
An initial fraud alert is a special program offered by the three credit reporting agencies. With initial alert protection, you will receive notifications and confirmation requests should any lender receive a credit application in your name during a 90-day period.
When you receive credit application notifications, you will have to verify your identity to confirm it was you who requested a new credit account. This way, no quick cash loans or other financial accounts can be opened in your name without your explicit authorization. While initial fraud alert programs only last 90 days, you can always renew your protection for another 90 days. Fortunately, there is no limit as to how many times a consumer can renew their initial fraud alerts.
If you would like protection for more than 90 days without having to renew, you may want to look into an extended alert program. With an extended fraud alert, you will have monitoring similar to the initial alert program but for up to seven years instead of just 90 days.
However, this fraud alert program requires that consumers present a copy of their investigative or fraud incident report. Also, if you ever decide that you do not need your extended fraud alert for the full seven years, you can cancel the program at any time.
Review Your Credit Report
After you have spoken to your credit card company and fraud alert agent, you will want to check your most recent credit reports on your own. Your credit report contains all your essential financial data like:
- Payment histories
- Length of credit history
- Credit mix
- Hard credit inquiries
- Debt-to-income ratio
Fraud and identity theft victims will often have incorrect data listed on their credit reports due to the actions of the identity thief. It is important to have this wrongful information removed from your credit reports ASAP in order to prevent your FICO Score from dropping unnecessarily.
Report Any Fraudulent Charges to the Major Credit Bureaus
If you do find any incorrect information on your credit report, be sure to report it immediately to the credit bureau. You can inform any one of the three major credit bureaus of the incorrect data listed on your report. From there, an agent will help you correct or remove the inaccurate data.
Other Kinds of Fraud and Identity Theft To Be Aware Of
Credit cards aren’t the only way you could be a victim of fraud or identity theft. Other forms of fraud you will want to protect your finances from are:
- Tax identity theft
- Medical identity theft
- Child identity theft
If you are suffering from any of the above forms of identity theft, you can contact the FTC to fill out the proper identity theft report forms.
How To Protect Yourself From Credit Card Fraud and Identity Theft
Once you have corrected your fraudulent credit card account, you will want to make sure a similar situation never happens again. You can do this by keeping your passwords and other financial data completely confidential, checking your credit report at least once a month, and signing up for credit monitoring.
Keep Your Financial and Personal Information Private
Keep your financial information safe by not sharing your data with anyone, not even close friends or family. Financial data and documents you should keep confidential are:
- Social Security numbers
- Bank account login information
- All your passwords for other financial accounts like credit cards, 401ks, etc.
- Credit card statements
Check Your Credit Reports Often
Checking your credit reports isn’t just something you should do once a year or when you are a victim of identity theft or fraud. While you can get a free credit report once a year from each major credit bureau, it may be a good idea to check your report at least once a month, if not more frequently. Checking your credit report gives you a chance to identify incorrect information right away and report it before your credit score can be negatively affected.
Try a Credit Monitoring Service
After you have recovered from credit fraud, it may be a good idea to sign up for fraud alerts to prevent a similar situation from ever happening again. You can choose a short-term initial fraud alert or a long-term extended fraud alert program. That way, you will be immediately notified about any future credit applications or potentially suspicious financial activity happening in your name.
FAQs About Fraud and Identity Theft
How can I identify unauthorized accounts on my credit report?
To spot any unauthorized accounts, regularly review your credit report. Look for unfamiliar entries and discrepancies in your credit file. Remember, you’re entitled to a free credit report annually from each of the credit bureaus.
Should I file a police report for a credit card opened in my name?
Yes, filing a police report can be a prudent step. It adds credibility to your identity theft report and can be helpful when disputing fraudulent accounts with credit bureaus or creditors.
How do I freeze my credit on all three bureaus?
A credit freeze restricts access to your credit report, making it harder for identity thieves to open new accounts in your name. You can freeze your credit with all three bureaus by going to each bureau’s website or giving them a call. A freeze is a good preventive measure while you’re resolving the issue.
What’s the difference between a fraud alert and a credit freeze?
A fraud alert requires companies to verify your identity before issuing new credit, which is less restrictive than a credit freeze. Both are effective tools to protect your credit file and scores from fraudulent activities.
How often should I check my credit statements for signs of fraud?
It’s wise to check your credit statements monthly. Promptly spotting and reporting unauthorized transactions helps in quickly addressing potential identity theft.
Can identity theft affect my credit scores?
Yes, identity theft can impact your credit scores, especially if it leads to new opened accounts or unpaid bills. Regularly monitoring your credit file can help you spot and address these issues swiftly.
What should I do if credit bureaus have different information about the fraud?
If there’s inconsistent information across the three major credit bureaus, report the discrepancies to each bureau separately. Providing detailed information, including your identity theft report, helps ensure accuracy across your credit files.
After resolving identity theft, how can I rebuild my credit scores?
Once you’ve resolved the issues, focus on rebuilding your credit scores. This includes paying bills on time, keeping debt low, and periodically checking your credit report for accuracy. Patience and consistent financial behavior are key.
A Word From CreditNinja on Credit Card Fraud
Fraud is an unfortunate risk that every consumer must be wary of. However, there are plenty of ways to prevent fraud and stay vigilant of scams. If you suspect you are a victim of fraudulent transactions, contact your creditor right away and request a new credit card. You may be able to get a chargeback for fraudulent transactions and stop further damage to your credit.
At CreditNinja, we value your trust and business. For that reason, we offer secure online loans that provide quick emergency cash and quality customer service. But we go a step further by offering answers to common financial questions. Check out our blog to learn how you can get a cash advance without a direct deposit, how to improve your creditworthiness, and how to quickly pay off credit card debt.
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