Nineteen people fall victim to identity theft every minute, and the ripple effect can be far-reaching. The financial hit you take might be just the beginning, and banks, lenders and businesses are often impacted as well. The longer you wait to take action, the more severe the effects of identity theft may become.
Credit Cards and Bank Accounts
Identity thieves want your money — or, at least, they want merchandise that you’re responsible paying for. Depending on how quickly you react when you first realize your identity has been stolen, some banks will reimburse you for “direct” losses, such as if someone has fraudulently siphoned your checking account. Federal law has your back, too, if a thief uses your debit or ATM card. You're only liable for fraudulent charges if you wait more than 60 days to report the incident.
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Credit cards work similarly. Under federal law, you’re only responsible for $50 in unauthorized charges to your credit card if it’s stolen, and you’re not liable for any charges if they occur after you report the theft. You’re not liable for any charges if your credit card number is stolen rather than the card itself.
Legal and Credit Troubles
Some incidents of identity theft go beyond charges made to existing accounts in your name. Thieves may open new accounts using your personal identifiers, such as your Social Security number, your address and your name. If you’re unaware of this activity and these debts go unpaid — which they invariably do — the lender might sue you for the balance you “owe.” You can fight the lawsuit and you may win if you can establish that you're a victim of identity theft, but the battle will run up legal costs. Meanwhile, those unpaid accounts can have a disastrous effect on your credit score, driving it down 100 points or more for a single incident.
Non-Financial Effects
You can expect that it will cost you time and money to set the record straight — that’s thousands of potential dollars out of pocket to clear your name and credit history. But identity theft isn’t just about money. The identities of American citizens have been stolen to allow criminals to avoid capture and individuals seeking medical care to receive treatment under fraudulent names. Victims may find themselves faced with false arrest, erroneous medical records, or the loss of federal or state benefits.
