10 Steps to Take if Your Financial Information Has Been Compromised

Sometimes things can go wrong, despite taking all necessary precautions. If you suspect that your personal or financial information has been compromised, it’s crucial to act quickly.

Here are 10 steps we recommend you take because the sooner you respond, the less damage may be done:

1. Contact Your Financial Institutions Immediately

The first thing you should do is reach out to the financial institutions involved. This includes your bank, credit card companies, or any investment accounts. Report the suspicious activity and let them know you believe your information may have been compromised. Here’s what they can do:

  • Freeze or lock accounts: Many institutions can temporarily lock or freeze accounts to prevent further unauthorized transactions.
  • Issue new cards: If a credit or debit card was stolen, they can cancel your current card and issue a new one with a different number.
  • Change passwords or PINs: You may need to update your online banking passwords or change your PIN for added security.
  • File a fraud alert: Some institutions will place a fraud alert on your account, which requires additional verification before any changes are made.

2. File a Report with the Authorities

  • Report to the police: If your personal information, such as your identity or bank accounts, has been stolen, you can file a report with your local police department. While this might not directly resolve the issue, it helps establish an official record and may be necessary for insurance claims or disputing fraudulent charges.
  • Report to the Federal Trade Commission (FTC): In the U.S., you can file a report with the FTC via IdentityTheft.gov. They will help you create a recovery plan, and your case will be entered into the national consumer fraud database.
  • Notify the credit bureaus: If you believe your personal information has been compromised, contact one of the three major credit bureaus (Equifax, Experian, or TransUnion) and request a fraud alert be placed on your credit file. This alerts lenders to take extra precautions when verifying identity before extending credit.

3. Review Your Credit Reports

Once you’ve filed a report, it’s time to monitor your credit for signs of identity theft. You can request a free credit report from each of the three major credit bureaus once per year via AnnualCreditReport.com. After an incident, you may want to check more frequently.

Look for unfamiliar accounts or credit inquiries that you didn’t authorize. If you spot any suspicious activity, take action by reporting it to the creditor or institution involved and disputing any unauthorized accounts.

4. Monitor Your Accounts Closely

Even if you’ve reported a breach, you should continue to monitor your accounts for unusual activity. This includes checking bank statements, credit card transactions, and investment account updates regularly.

Consider setting up real-time alerts (if you haven’t already) for transactions over a certain amount or any activity that seems unusual. This gives you a quicker chance to react to suspicious transactions.

5. Change All Your Passwords

If you believe your passwords have been compromised, change them immediately—across all your accounts. This includes not just your bank accounts but also email, credit accounts, and any other services where you store sensitive information.

  • Use a password manager to generate and store complex passwords.
  • Update security questions: In case someone knows your answers to personal security questions, update them immediately to something only you would know.

6. Place a Credit Freeze

A credit freeze prevents creditors from accessing your credit report, making it much harder for thieves to open new accounts in your name. You must contact each of the three credit bureaus individually to request a freeze. It’s free to do so and will remain in place until you lift it.

While this doesn’t prevent thieves from misusing your existing accounts, it can prevent new fraud from occurring.

7. Consider Identity Theft Protection Services

If you’ve been a victim of identity theft, or if you simply want to be proactive, enrolling in an identity theft protection service could provide peace of mind. These services monitor your personal information for suspicious activity and offer tools to help recover your identity if necessary. Some services include:

  • Credit monitoring: Keeps track of changes to your credit report.
  • Fraud alerts: Alerts when someone attempts to open accounts in your name.
  • Recovery assistance: Provides support if you need to file reports and clear up fraudulent charges.

8. File a Dispute for Fraudulent Charges

If your credit card or bank accounts have been compromised and unauthorized transactions have occurred, you have the right to dispute those charges. Most financial institutions provide procedures to report and reverse fraudulent transactions.

The sooner you report the fraud, the better. You may be liable for only a small portion of the fraudulent charges, or none at all, depending on how quickly you report them.

9. Notify Other Relevant Parties

If your personal information was stolen in a way that could affect your employment or tax filings, it’s essential to notify:

  • Your employer: If your social security number was stolen or misused, your employer may need to take specific precautions for payroll and tax reporting.
  • The IRS: In the event of tax fraud or misuse of your tax ID, contact the IRS immediately to protect yourself from identity theft during tax filing.

10. Keep Records of All Actions Taken

Throughout the process, be diligent about keeping detailed records of all the steps you’ve taken to resolve the situation. Document who you spoke with, when, and what actions were taken, as this can be useful when disputing fraudulent charges or proving your case to law enforcement or institutions.

Conclusion: Quick Action is Key

If you suspect that your financial information has been compromised, the key is to act fast. The quicker you report the issue to the necessary institutions, monitor your accounts, and take protective steps, the more likely you are to limit the damage. By following these steps and working with the right professionals, you can regain control of your financial information and continue to protect your financial future.

Remember, vigilance and swift action are your best tools in preventing lasting damage from identity theft or fraud.

If you ever find yourself in need of additional support or advice on what to do if your information has been compromised, don’t hesitate to reach out to your financial advisor. We are here to help guide you through these challenging situations.

At Copper Leaf Financial we work with you to develop a customized wealth management plan that integrates all aspects of your financial life, helping to ensure financial security and peace of mind for yourself and your loved ones. Contact us today for additional information and to get started.

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Recipients should not act on the information presented without seeking prior professional advice.

By Breanna Sykes, CFP®, Senior Wealth Advisor, Copper Leaf Financial, LLC