Real Talk: Surviving identity fraud

If you’ve ever spotted an unfamiliar charge on your credit card statement, you’ve likely had that uneasy feeling in the pit of your stomach. If you didn’t buy those new sneakers, or book that flight, or pay for that gas… who did?

Identity fraud can be a scary thing. And although you’re typically not on the hook for unauthorized charges, it can still feel violating to know that someone has stolen your information. In today’s digital world, where we’re sharing personal and financial information online more than ever, identity theft is on the rise. In 2022, the Canadian Anti-Fraud Centre received fraud and cybercrime reports totalling a staggering $530 million in victim losses. Nearly a 40% increase from the unprecedented $380 million in losses in 2021.

We’ve already talked about some of the important steps you can take to make sure that you and your finances are protected—and there’s no question that it’s important to be informed. But today, we’re chatting about what happens after you’ve been impacted by identity fraud. How do you recover when your accounts have been compromised? Sherryl a credit union expert broke down the basics for us.

The first thing to know? Identity theft can go way beyond the odd unauthorized credit card charge.

“Fraudsters can use your personal information to access your financial accounts, open new ones, apply for loans and lines of credit, and of course, rack up your credit card balance,” explains Sherryl. “If you don’t catch it right away, this could unfortunately have a big effect on your credit report—impacting your ability to borrow in the future.”

In an ideal world, you should be checking your financial statements regularly for any out-of-the-ordinary charges—and if your financial institution notices any suspicious activity, they will reach out to verify that you were responsible. But what happens if the damage is already done? If your credit rating has taken a hit, how do you begin to make reparations? According to Sherryl, it can take time.

“The first thing to do is to shut down the fraudster’s access. Call your credit card provider and financial institution, change your passwords, and close any accounts that have been compromised,” she says. Your financial institution can help you figure out the extent of the damage.”

From there, make sure you file a police report. This is important both for reporting the theft and in obtaining helpful documentation that you’ll need when you reach out to the credit bureaus—they’re your next call.

“You’ll want to contact the two credit bureaus in Canada (Equifax and TransUnion) and place a fraud alert,” advises Sherryl. “A fraud alert lets any lenders know that they need to take extra precautions to confirm your identity before offering credit in the future—making it much trickier for fraudsters to open new credit in your name.”

Once those alerts are in place, the real work starts—restoring your credit rating. Be prepared to write letters of dispute for each incorrect credit report entry and include as much information as you can—a copy of your police report and any supporting documents outlining the unauthorized actions.

“It’s helpful to keep records of everything,” notes Sherryl. “This includes any documents you’ve sent, along with a list of people you’ve spoken to at the credit agencies, the police station, and your financial institution—track the dates of your interactions and the contact numbers.”

It sounds tedious, but it may take several calls to the credit bureaus to walk through each incorrect credit report entry. It helps to stay patient and organized—and keep checking your credit reports so you know where you stand. It’s a tough lesson to learn, but all the more reason to be diligent in protecting yourself moving forward.

“Don’t let your cards out of your sight—memorize your passwords and your social insurance number so you don't need to carry the card in your wallet, and be careful when you shop online,” says Sherryl. “It helps to remember that your financial institution is there to support you. If you have concerns about activity on your accounts, don’t brush those thoughts aside. It’s always better to err on the side of caution and give a financial expert a call to look into it.”

For more information about fraud prevention, visit the Canadian Anti-Fraud Centre website. To learn more about protecting your finances, contact your local credit union.