Fraud Victim Checklist: How To Recover From Fraud [10 Steps]

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Hari Ravichandran

CEO and Founder, Aura

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    Were You The Victim of Fraud? Don’t Panic

    Americans filed more than 2.8 million reports of fraud in 2021, according to the Federal Trade Commission (FTC) [*]. That number has nearly doubled in the past two years. 

    All this is to say that if you were the victim of fraud, you’re not alone. 

    From imposter scams to fraudulent online stores, fake job listings, and investment fraud schemes, criminals have more types of fraud at their disposal than ever. And they’re getting better, more sophisticated, and faster at tricking victims. 

    If you’re a fraud victim, you’re no doubt upset, frustrated, and maybe even embarrassed. But fraud doesn’t have to ruin you financially. 

    Here’s exactly what to do if you’ve been the victim of fraud. 

    What Is Fraud Exactly? Who Do Fraudsters Target?

    Fraud is intentional deception with the goal of stealing your money, credit, and sensitive information. 

    Con artists promise goods that don’t exist, services they won't provide, or financial perks that will never materialize. Fraud's are always changing and adapting to new scams and technologies (like the recent rise in fraud on Zelle).

    Fraudsters could even be trying to commit identity theft

    Many types of fraud are simply ways to get access to your personally identifiable information (PII). With your Social Security number, driver's license, and other stolen data, scammers can:

    • Take over and drain your bank accounts.
    • Open new accounts and lines of credit in your name.
    • Commit loan fraud.
    • Max out your credit cards. 
    • Destroy your credit score. 
    • Apply for your tax refund check.
    • Use up your medical benefits (i.e. medical identity theft).

    Fraud and identity theft cover such a broad category of crimes that anyone can be a victim. 

    If you look at data from the FTC, fraud and identity theft reports span ages, genders, cultures, income levels, and educational backgrounds [*]. 

    No one is 100% safe. 

    How To Tell if You’re the Victim of Fraud

    • Unfamiliar bank withdrawals, credit card charges, and purchases. You may also receive calls or SMS messages verifying unfamiliar logins or large purchases you never made.
    • Hard inquiries on your credit report that you never authorized. New credit cards or loans may also be opened in your name.
    • Denials for lines of credit you never applied for. Or, a denial when you apply for a new line of credit due to a major drop in credit score.
    • Calls from debt collectors regarding debt that’s not yours.
    • Unfamiliar medical bills, claims, and inaccurate health conditions in your medical records. Your health insurance provider may also say you’ve maxed out your benefits limit even though you never received care. 
    • Someone stole your tax refund check. The IRS says that your tax refund has been distributed even though you never received it.
    • Compromised online accounts. You may receive alerts about suspicious login attempts, or not be able to sign in to your accounts. You may also see unfamiliar devices accessing your accounts or network.
    • Notifications about a data breach telling you what PII has been exposed for cybercriminals to exploit.
    • Missing mail. Fraudsters can use a change-of-address scam to reroute your mail and receive bank statements and replacement credit cards.
    • A warrant out for your arrest. Criminals might even use your identity during traffic violations, misdemeanors, and felony offenses.

    Be on the lookout for these red flags and other ways to tell if your identity has been stolen. If you notice any of them, you may be a victim of fraud.

    Fraud Victim Checklist: Follow These 10 Recovery Steps

    1. Don’t blame yourself
    2. Check your insurance coverage
    3. Act quickly to assess the full damage
    4. Notify your bank, lenders, and any impacted company
    5. Set up a fraud alert with the three credit bureaus
    6. Secure your online accounts
    7. Gather documentation for your fraud case
    8. Report the fraud to the FTC
    9. File a police report and notify other government agencies 
    10. Dispute fraudulent transactions and start to repair your credit

    Statistics tell us that if someone was a victim of fraud once, they’re more likely to become a repeat victim. As soon as you recognize the warning signs of identity theft and fraud, take action as soon as possible.

    Here’s what you should do:

    1. Don’t blame yourself

    The Department of Justice estimates that only 15% of fraud victims actually report the crimes [*]. 

    Why? Because fraud is an emotional crime as much as a financial one. As a victim, you might feel angry and embarrassed that you were tricked. Or, you might not want to report fraud because you think your losses aren’t “worth” reporting. 

    Don’t let these feelings get in the way of reporting the crime. Not only will you help yourself recover, you’ll also help prevent future fraud. 

    2. Check your insurance coverage

    If you have identity theft insurance, your provider should be the first call you make. Your provider will help secure your accounts, uncover fraud, and walk you through the many steps of recovery. 

    For example, Aura’s team of White Glove Fraud Resolution Specialists are available 24/7 to help you recover from fraud and identity theft. We’ll work with you to navigate government agencies, banks, and creditors and help you get your life back. 

    You’re even covered by a $1,000,000 insurance policy for eligible losses due to identity theft. 

    Aura’s not the only option for identity theft protection. You may be covered by your workplace’s insurance policy. Some homeowners insurance even covers stolen documents, cash, or credit cards. 

    Recovering from fraud can be long and frustrating. If you have coverage, use it. 

    Related: Aura vs. LifeLock: How to pick the best identity theft protection in 2022 <--

    3. Act quickly to assess the full damage

    Scammers hope it takes you a long time to recognize the signs of fraud. The longer you go without reporting the crime, the more they can steal. 

    As soon as you realize you’ve been targeted, start checking for and documenting the damage. 

    If you’re signed up for a credit monitoring service and they alerted you of the fraud, start there. 

    Aura credit monitoring with 4x faster fraud alerts
    [Source: Aura credit monitoring with fraud alerts]

    Then, check your other financial accounts for suspicious activity.

    You’re entitled to one free credit report from all three major credit bureaus (Experian, Equifax, and TransUnion). Visit AnnualCreditReport.com and check for:

    • Hard credit inquiries you didn’t request. 
    • New accounts you didn’t open. 
    • Loans you didn’t take out (like mortgages, student loans, or personal debt).
    • Accounts that are in collections or records of bankruptcies. 
    • Any other suspicious activity. 

    4. Notify your bank, lenders, and any impacted companies

    Now that you know the depth of the fraud, you need to shut the fraudsters out of your accounts. 

    Start by contacting your bank, credit card company, credit unions, and any other impacted company and notify them of the fraud. 

    They’ll close your accounts and walk you through the next steps (getting you new credit and debit cards, restoring stolen funds, etc.)

    If the fraudster managed to open accounts with other companies, you’ll need to contact their fraud departments.

    Ask them to freeze the fraudulent accounts and send you a letter or email confirming: 

    • The account is fraudulent and wasn’t opened by you. 
    • You’re not liable for any purchases or debts taken out by the account. 
    • The company has removed the fraudulent charges from your name. 
    • The fraudulent charges have been removed from your credit report. 

    Pro Tip: As the victim of fraud or identity theft, you have special rights under the Federal Government’s Fair Credit Reporting Act (FCRA). This includes disputing inaccurate information on your credit report and getting copies of any fraudulent transactions. 

    Collect as much information and proof as possible. You’ll need it later on when you file an official report and dispute charges and debts that aren’t yours. 

    5. Set up a fraud alert with the three credit reporting agencies

    Next, you’ll want to alert the three major credit bureaus that you’ve been the victim of fraud. They’ll place a fraud alert on your account to stop the scammers from opening new accounts in your name. 

    The good news is that you only need to contact one company. They’re required by law to inform the others of the fraud alert. 

    You have three options when it comes to placing a fraud alert on your credit report:

    • Security freeze: This is for if you think you’ve been the victim of identity theft. A security freeze completely prevents your report from being shared with third parties until it’s lifted. 
    • Initial fraud alert: This requires lenders to verify your identity before approving new credit. The initial alert lasts for one year unless you lift it early. 
    • Extended fraud alert: After you file your FTC report, you can ask for an extended fraud alert that lasts an additional seven years. 

    All of these freezes and alerts can be lifted for free at any time.

    Pro tip: Aura lets you lock and unlock your Experian credit file with a single click. 

    Aura one-click credit lock
    [Source: Aura one-click credit lock]

    6. Secure your online accounts against identity theft

    If a fraudster got access to your banking information or credit card numbers, there’s a good chance they have access to other accounts. 

    Before you go any further, it’s a good idea to change all your passwords and secure your accounts from cyber crime by:

    • Using strong passwords that are at least 8 characters long and combine letters, numbers, symbols, and cases. 
    • Setting up a password manager to keep track of all your passwords and alert you of compromised accounts.
    • Enabling multi-factor authentication on your accounts. This is an added layer of security that requires a special code along with your password. While most companies use SMS for sending you these codes, that can be compromised if someone steals your phone. Instead, use an authenticator app.

    Pro tip: Fraudsters and scammers can buy your personal information off the Dark Web for as little as $5. Check to see what accounts and information have been compromised using Aura’s Identity Guard Dark Web scanner.

    Aura Identity Guard Dark Web scanner

    7. Gather these documents for your fraud case

    Once you prepare to report the fraud, you’ll want to gather as much proof as possible. Depending on your situation, you should collect:

    • Documentation of fraudulent transactions and financial losses. Tally up the total amount scammers took from each account, stolen credit cards, etc.
    • Evidence relating to the fraud. This includes receipts, loan or credit denials, bank statements, money orders, etc.
    • Identifying contact information that could be used to find the scammers.Think about social media profiles you encountered, unknown phone numbers that sent you a text message, etc... Take a screenshot of websites selling fraudulent goods or engaging in scams (including the website address).
    • Written communication from scammers. If the fraudster reached out to you, collect copies of phishing emails, threatening text messages, or screenshots of social media messages discussing sextortion.
    • Recovery logs that detail whom you spoke with or emailed about the fraudulent activity on your accounts. Try to record the date, time, names, and what was said. 

    You’ll need all this information to file your report, aid investigators, and seek restitution for damages. It’s also smart to have this documentation for your records, should something else come up.

    8. Report fraud and identity theft to the FTC

    Next, it’s time to file an Identity Theft Report with the Federal Trade Commission (FTC) at www.identitytheft.gov. You can also report the fraud at ReportFraud.ftc.gov.

    This gives you an official identity theft affidavit that will help you dispute charges and repair your credit. 

    Identitytheft.gov report identity theft wizard
    [Source: www.identitytheft.gov]

    You’ll also receive a personalized recovery plan and letter templates for disputing charges. 

    Once you’re done, print out the affidavit and keep a copy for your records. You’ll need this to report the crime to your credit card companies, financial institutions, and local law enforcement. 

    9. File a police report and notify other federal agencies

    Once you file an Identity Theft Report with the FTC, other law enforcement agencies can access it during their investigations. However, you may still need to file a police report for identity theft in certain situations, such as:

    • When you know the person who committed the fraud or identity theft. 
    • You have information that could help the police catch the fraudster. 
    • Your identity was used in committing a crime.
    • Your financial institution or insurance company requires a police report.

    Gather your FTC report, documentation of the fraud, and ID and head to your local police department. They’ll look through everything and let you know the next steps. 

    Depending on the situation, you may need to report the case to your state financial regulator, attorney general, the FBI, or the U.S. Postal Inspection Service.

    10. Dispute fraudulent transactions and start to repair your credit

    Once your identity and accounts are secure, it’s time to repair the damage. 

    Fraud can ruin your credit score. And while you have the right to dispute every fraudulent charge, transaction, and new account, it still takes time to:

    • Follow up with any company where fraud occurred. Send them your FTC and police report as proof.
    • Dispute incorrect information on your credit report. Credit agencies have 30 days to respond to your requests.
    • Close any new accounts opened in your name. Again, agencies have to act quickly to close fraudulent accounts.
    • Stop debt collection companies from contacting you. The FTC has a good template you can use for contacting debt agencies on their website.

    You might be tempted to use credit repair companies, but many of these are scams themselves

    Pro tip: Aura’s team of White Glove Fraud Resolution specialists can walk you through the entire process of recovering from fraud. 

    Aura White Glove Fraud Resolution specialists
    [Source: Aura White Glove Fraud Resolution Specialists]

    Do Victims of Fraud Get Their Money Back?

    The good news is that many credit card companies and banks offer zero liability fraud protection — as long as you report the fraud quickly. Make sure to check their rules around reporting time frames and reimbursement limits. 

    Fraud investigations can take weeks or months to resolve. Some companies may refund your money and eliminate fraudulent purchases immediately. Others may withhold their reimbursements until they reach a resolution.

    The Bottom Line: Don’t Become a Victim of Fraud (Again)

    Like most criminals, fraudsters love to return to the scene of the crime. If you’ve been the victim of fraud once, there’s a good chance they’ll come for you again. 

    Keep yourself safe by following the latest fraud prevention tips and becoming familiar with the types of identity theft and financial fraud that scammers target you with. 

    And for extra protection for you and your family, consider signing up for Aura. We’ll keep your accounts safe from identity thieves and fraudsters. And if the worst happens, we’re here for you 24/7 to help you recover from fraud. 

    Ready for ironclad identity theft protection? Try Aura 14-Days Free.

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    1. Financial identity theft and fraud
    2. Medical identity theft
    3. Child identity theft
    4. Elder fraud and estate identity theft
    5. “Friendly” or familial identity theft
    6. Employment identity theft
    7. Criminal identity theft
    8. Tax identity theft
    9. Unemployment and government benefits identity theft
    10. Synthetic identity theft
    11. Identity cloning
    12. Account takeovers (social media, email, etc.)
    13. Social Security number identity theft
    14. Biometric ID theft
    15. Crypto account takeovers