How to Deal with the Consequences of Identity Theft

Updated October 6, 2023

Did you know that approximately 15 million Americans had their identity stolen in 2021? This doesn’t account for the fact that a lot of cases also went unreported.

This statistic alone shows why it’s imperative to do everything in our power to prevent this unwanted phenomenon.

However, if the worst does happen and your customers find themselves being victims of identity theft because of something that happened at your company, you need to do everything in your power to help them through this and minimize the damage.

So, considering that, below, we’re going to explore how to deal with the consequences of identity theft in more detail.

What is identity theft

Identity Theft

Identity theft happens when someone steals a person’s confidential data and utilizes it for their gain. 

Identity theft can happen to anyone via the following:

  • Acquiring PII (Personally Identifiable Information) via a data breach
  • Hacking into someone’s phone, email, or other device, or deploying a phishing attack to gather personal data
  • Stealing bank account, credit card, or SSN account numbers

What are the consequences of identity theft?

Before we take a look at how you can deal with the consequences of identity theft, we first need to outline what they are.

How identity theft impacts an individual

It’s important to note that the consequences of identity theft do depend on the type of crime that’s been committed. If someone gains access to a person’s credit cards or bank accounts, they could leave them with no funds for their daily living expenses.

Other kinds of identity fraud can have a more long-term impact. It all depends on what the criminal does once they have your identity. Not only could they still a person’s identity, but they could then use this identity to carry out criminal activity.

When you take all of this into account, it’s not difficult to see how identity theft can have a huge emotional impact on the victim as well.

People can feel overwhelmed by the psychological pain of the loss. Feelings of rage, betrayal, isolation, anger, helplessness, and embarrassment can arise.

Furthermore, a crime like this can trigger deep fears of the ability to trust again, the safety of family members, and financial security.

How identity theft impacts a business

If your customers or employees have been a victim of identity theft because of a data breach that has targeted your company, it’s bad, bad news for your business. Data breaches can cause huge damage, but you can minimize this if you have the right strategy in place.

A lot of businesses have to close shop indefinitely due to a data breach because of the huge financial pressures and the reputational damage.

If you suffer a data breach, not only will you experience regulatory fines, but you’ll you have to spend money on finding the vulnerability and rectifying it, compensating victims, and building your reputation back up. This costs a lot of money!

Plus, trust takes a long time to build, but it can be ruined within a matter of seconds. It can be very difficult for businesses to hold onto customers once they’ve been the reason their identity has been stolen.

Prioritize account takeover protection

To ensure you don’t suffer the negative impacts of a data breach and identity theft, you need to invest in account takeover protection. There are a number of different steps you can follow here, including:

  • Look for compromised credentials – The first step is to compare new user credentials with credentials in your database that have been breached, so you can determine if a new user is trying to sign up with breached credentials. It’s also a good idea to check your database on a regular basis too, enabling you to catch when existing customers’ information becomes compromised, notifying users straight away. It’s all about being proactive. Make sure you alert users and new members straight away if their details have been breached.
  • Send notifications when there are changes on your accounts – If there are any changes made to a person’s account, it’s vital that they’re notified straight away. By doing this, they will be able to immediately check their account, and if they didn’t take the specific action, they can act quickly. This will ensure you’re able to minimize the risk and consequential damage as much as possible.
  • Make sure you set-up rate limits on log-in attempts – You can establish rate limits on log-in attempts based on IP address, device, and username, based on the typical behavior of the users to help stop account takeover. You can also add limits on the use of VPNs, proxies, and other factors.
  • Install account takeover protection software – Last but not least, the most important thing you can do is implement account takeover protection software. This type of specialist online fraud and bot protection software is designed to work automatically in the background. It will assess requests, detecting whether or not they’ve come from a human or a bot to help you to take the right action and protect your account.

What should someone do if they suffer from ID fraud?

There are a number of steps a person needs to take if they’ve been the victim of identity fraud:

  • Check your credit report – First, we recommend logging into your credit report account. Use all credit reference agencies, not just one. You’ll then be able to view whether there have been any searches on your account or personal details. You can also discover if there are any new accounts on your report that you’ve not applied for. If you spot something unusual, get in touch with the lender right away to enquire and inform them that you didn’t make that application.
  • Talk with a specialist fraud team – There are specialist fraud teams and charities available to help you if you’ve been the victim of identity fraud. They will be able to go through your account with you, explain what steps to take, and help you to make sense of it all. They can discuss additional security options and dispute fraudulent transactions with relevant lenders. If the identity theft has happened because of a breach at a company you send payments to or have purchased something from, they may have a dedicated helpline and access to free resources.
    • Add a notice of correction password to your credit report – If you’re sure you’ve been the victim of identity fraud or someone has burglarized your house and stolen your personal data, it’s a good idea to add a notice of correction to your password for your credit report. If you’ve never heard of this before, it’s basically a small statement that you can utilize to add more information to an entry on your report. Therefore, you could state that the reason an account is present on your report is that you’ve been the victim of identity fraud and you’re actively trying to resolve the situation.
    • Create an Identity Theft Affidavit – Go to FTC’s or call the Federal Trade Commission (FTC) at 877-438-4338. During this process, you will typically generate what’s known as an Identity Theft Affidavit. You won’t need a lawyer for this, don’t worry. All you need to do is follow the steps and print the affidavit when you’re finished.
  • File a report at your local police department – The final part of the process is to head to your local police department and file a police report. You’ll need your Identity Theft Affidavit for this. Bring it with you, as well as proof of your address, such as a utility bill, and government-issued photo identification. If you have further proof of the theft, bring it with you, as this will certainly help your case.

Dealing with the consequences of identity theft to protect the future of your business

As you can see, identity theft can have a monumental impact on your business, customers, and your future. This is why it’s imperative to handle this situation carefully. You need to ensure that you protect your company and minimize the impact of identity theft. Use the tips above to do exactly that.

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