What Happens If I’m a Victim of Identity Theft?

You’re Protected—But You Must Act Immediately

If you’re a victim of identity theft, federal law protects you from paying fraudulent debts in most cases. You must place fraud alerts or security freezes on your credit reports, file a report at IdentityTheft.gov, and take steps to protect your credit history and finances.

But here’s what most sites won’t tell you: Last year, more than a million people reported identity theft to the FTC. The faster you act, the less damage thieves can cause to your financial life.

Why This Matters to You

Identity thieves can drain your bank account, ruin your credit, and even block access to your health benefits and tax refund.

If you’ve discovered unauthorized charges, fraudulent accounts opened in your name, or received IRS notices about income you didn’t earn, understanding what happens next could prevent years of financial and legal problems.

Many victims panic when they realize someone used their Social Security number to open credit cards, take out loans, file fake tax returns, or even commit crimes in their name. The emotional toll is real—but federal law provides strong protections if you follow the right steps immediately.

This affects you whether the theft is recent or you’re just discovering fraud that occurred months or years ago.

What You Came to Know: What Actually Happens After Identity Theft

You’re Typically Not Liable for Fraudulent Debt

Here’s the truth: Federal law protects you from paying fraudulent debt created by identity thieves.

Under the Fair Credit Billing Act, your maximum liability for unauthorized credit card charges is $50 per card—and most issuers offer zero-liability policies. For debit cards and electronic transfers, the Electronic Funds Transfer Act limits your liability to $50 if you report within 2 business days, or $500 if you report within 60 days.

For accounts opened fraudulently in your name—credit cards you didn’t apply for, loans taken out using your SSN, or mortgages you never signed—you’re not responsible for the debt under most state laws.

Bottom line: You didn’t create the debt, so you typically don’t have to pay it back.

Your Credit Report Will Show Fraudulent Activity (Until You Dispute It)

Once you get your credit reports, review them carefully. Look for inquiries from companies you haven’t contacted, accounts you didn’t open, and debts on your accounts that you can’t explain.

Fraudulent accounts will damage your credit score temporarily—but by law, credit reporting companies must block identity theft-related information from appearing on a victim’s credit report within 4 business days after you provide your Identity Theft Report.

This means unauthorized transactions, accounts, and credit inquiries get removed from your credit history once you prove they’re fraudulent.

Debt Collectors May Contact You (But You Have Rights)

Be prepared for contacts from creditors who may want you to pay the debts of identity thieves.

Under the Fair Debt Collection Practices Act, once the collection agency has been notified that the debt is a result of an identity theft, under the law the collection agency may not continue to call you.

Send collectors a written dispute letter with your FTC Identity Theft Report. They must stop contacting you and verify the debt’s legitimacy.

Law Enforcement May Investigate (But Don’t Wait for Them)

Contact your police department, report the crime and obtain a police report.

While police may investigate, identity theft recovery doesn’t depend on catching the thief. Your dispute rights with creditors and credit bureaus apply regardless of whether law enforcement makes arrests.

The police report serves as documentation for your disputes—not as a requirement for legal protection.

Recovery Takes Time But Follows a Clear Process

Most identity theft cases resolve through the financial institution’s dispute process, not through lawsuits.

When you place an initial fraud alert on your file, you’re entitled to order one free copy of your credit report from each of the nationwide credit reporting agencies.

The typical recovery timeline:

• Immediate: Report fraud to banks and credit card companies
• Within 4 business days: Credit bureaus block fraudulent information after receiving your Identity Theft Report
• 30-90 days: Banks complete fraud investigations
• 3-6 months: Credit reports fully cleaned of fraudulent accounts

Continue to check your credit reports periodically, especially for the first year after you discover the identity theft, to make sure no new fraudulent activity has occurred.

What You Must Know: Critical Mistakes That Worsen Identity Theft

Missing the 60-Day Reporting Deadline Increases Your Liability

For debit card fraud and unauthorized electronic transfers, the Electronic Funds Transfer Act sets strict deadlines.

Report within 2 business days: $50 maximum liability. Report within 60 days: $500 maximum liability. Report after 60 days: unlimited liability for unauthorized transfers that occurred more than 60 days before you reported.

Don’t wait. Check your bank statements the day they arrive.

You Must Freeze Your Credit or Thieves Can Keep Opening Accounts

A freeze can stop identity thieves from opening new accounts in your name, but a freeze doesn’t prevent identity thieves from taking over existing accounts.

Once your report is frozen, the credit reporting agency cannot release it without your prior express approval.

Place a security freeze with all three bureaus (Equifax, Experian, TransUnion) immediately. It’s free for identity theft victims in all states.

For comprehensive monitoring beyond credit freezes, explore Does LifeLock Help With Identity Theft Expert Analysis of Features Pros and Limitations.

You Need Documentation—Phone Calls Aren’t Enough

Write a separate letter to each of the 3 companies (credit bureaus) disputing fraudulent information.

Keep copies of:

• Your FTC Identity Theft Report from IdentityTheft.gov
• Police report
• All dispute letters sent to creditors, debt collectors, and credit bureaus
• Confirmation numbers from phone calls
• Dates and details of all fraud-related communications

Without documentation, you’ll struggle to prove your case if creditors refuse to remove fraudulent charges.

What to Do Next

Step 1: Report Identity Theft to the FTC and Get Your Recovery Plan

Go to IdentityTheft.gov immediately. Report the ID theft and create an identity theft recovery plan.

This creates your official Identity Theft Report—the document you’ll need to dispute fraudulent accounts with creditors and block fraudulent information from your credit reports.

The FTC provides free step-by-step guidance customized to your specific theft situation.

Step 2: Freeze Your Credit and Place Fraud Alerts

Contact all three credit bureaus:

• Equifax: 800-525-6285
• Experian: 888-397-3742
• TransUnion: 800-680-7289

When you place an initial fraud alert, creditors must take reasonable steps to make sure the person making a new credit request in your name is you before granting that request.

Learn how to monitor for ongoing misuse at How To Tell If Someone Is Using Your SSN.

Step 3: Dispute Fraudulent Accounts and Charges

For new unauthorized accounts, you can either file a dispute directly with the company or file a report with the police and provide a copy, called an Identity Theft Report, to the company.

Send written disputes to:

• Banks and credit card issuers for unauthorized charges
• Creditors for fraudulent accounts
• Credit bureaus to block fraudulent information

Review How To See All Accounts Associated With Your SSN to identify all fraudulent accounts tied to your Social Security number.

Pro Tip

When you place an initial fraud alert on your file, you’re entitled to order one free copy of your credit report from each of the nationwide credit reporting agencies—in addition to your standard annual free reports. This means you can check all three bureaus immediately without waiting or paying fees. Order them the same day you place your fraud alert to catch all fraudulent accounts quickly.

FAQs

Am I responsible for debt created by identity thieves?

No. Federal law protects you from fraudulent debt. Your maximum liability for credit card fraud is $50 under the Fair Credit Billing Act, and most issuers offer zero liability. For accounts opened fraudulently in your name, you’re not responsible under most state laws.

What happens to my credit score after identity theft?

Fraudulent accounts will temporarily damage your credit score. Once you provide your Identity Theft Report to credit bureaus, they must block fraudulent information within 4 business days. Your score will recover once fraudulent accounts are removed.

How long does it take to recover from identity theft?

Recovery timelines vary. Credit bureaus must block fraudulent information within 4 business days of receiving your Identity Theft Report. Bank fraud investigations take 30-90 days. Full credit report cleanup typically takes 3-6 months. Monitor your credit for at least one year after discovery.

Can identity thieves keep opening accounts after I report fraud?

Not if you freeze your credit. A security freeze prevents credit bureaus from releasing your credit report to new creditors, stopping thieves from opening new accounts. Fraud alerts require creditors to verify your identity, but freezes are stronger protection.

What if the police won’t take my identity theft report?

If you’re having difficulties: Provide the officer with a copy of the Law Enforcement Cover Letter that explains why the police report and the Identity Theft Report are so important. You can still file your FTC Identity Theft Report at IdentityTheft.gov—this is legally sufficient for disputing fraudulent accounts even without a police report.

Do I need to hire a lawyer for identity theft recovery?

Most identity theft cases resolve through the dispute process without lawyers. Credit bureaus and creditors must follow federal law (Fair Credit Billing Act, Fair Credit Reporting Act, Electronic Funds Transfer Act) when you provide your Identity Theft Report. If they refuse or you face ongoing fraud, consult a consumer protection attorney.

What happens if someone filed a tax return using my SSN?

Contact the IRS immediately. File Form 14039 (Identity Theft Affidavit) to report tax-related identity theft. The IRS will issue you an Identity Protection PIN (IP PIN) to prevent future fraudulent tax filings. Your refund may be delayed while the IRS investigates.

Disclaimer: This article about identity theft and victim protections is provided for informational purposes only and does not constitute legal advice. Identity theft laws and recovery procedures vary by state and change over time. AllAboutLawyer.com does not provide legal services, representation, or consultations. If you are a victim of identity theft or have questions about your specific situation and legal options, consult a qualified attorney licensed in your state or contact the Federal Trade Commission (FTC) at IdentityTheft.gov, the Consumer Financial Protection Bureau (CFPB), or your state attorney general’s office for guidance.

What to Do Next: File your Identity Theft Report at IdentityTheft.gov for a personalized recovery plan and official documentation to dispute fraudulent accounts.

Stay informed, stay protected. — AllAboutLawyer.com

Last Updated: February 11, 2026 — We keep this current with the latest legal developments

This article provides general information about identity theft and victim protections. This is not legal advice. Consult a qualified attorney licensed in your state for specific legal guidance about your situation.

About the Author

Sarah Klein, JD, is a former consumer rights attorney who spent years helping clients with issues like unfair billing, product disputes, and debt collection practices. At All About Lawyer, she simplifies consumer protection laws so readers can defend their rights and resolve problems with confidence.
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