Ken Stalcup, a certified public accountant in Indianapolis, used his debit card to pay for a meal at a local restaurant. A few days later, his card was used in New York without his knowledge to purchase computers at a national office supply store. His bank flagged the suspicious charge and quickly canceled the card, but not before the perpetrator racked up close to $2,000. As someone who regularly monitors his checking account, Stalcup's initial reaction was, "This can't be happening to me, can it?"
Identity theft is a growing problem in the United States. According to the 2012 identity fraud report by Javelin Strategy & Research, cases of identity fraud increased by 13 percent last year, with more than 11.6 million U.S. adults becoming victims.
Adam Levin, co-founder and chairman of IDentity Theft 911, a Scottsdale, Ariz., company that provides identity and credit protection services for families, warns that identity theft can take many forms. "Identity theft is as creative as the person who is perpetrating the crime," he says. "Unfortunately, there is no end to the creativity."
Everyone is a potential victim of identity theft. "You can do everything right—shred, secure, watch who you talk to—and then if your name is on the wrong database, at the wrong time, and the wrong person compromises that database, your identity can be stolen," Levin says.
U.S. News spoke to identity-theft experts to highlight red flags that might indicate you're a victim:
You find errors on your bank or credit-card statement. This is likely the first warning sign you encounter. When checking your paper or online statement, you might see an unexplained or inaccurate entry—a withdraw, a check, an electronic transaction, or a purchase that you don't recognize.
You spot errors on your credit report. You request a copy of your credit report and notice inaccurate information. The most common indicators of identity theft are a credit inquiry you don't recognize or a new account you didn't open, according to Paul Stephens, director of policy and advocacy with the Privacy Rights Clearinghouse, a California nonprofit focused on identity-theft awareness.
Your account is flagged. You might receive a phone call, letter, or email from your bank or brokerage notifying about an irregularity on your account. If it comes in the form of an email, make sure that it's a legitimate email and not a phishing email (where a fraudster masquerades as a trusted entity to try to acquire your personal information). Stephens suggests contacting your bank or credit union before opening it.
Debt collectors are calling. A debt collector contacts you about accounts you know nothing about or problems with existing accounts that you're unaware of.
There's a warrant out for your arrest. Say you get stopped for a speeding ticket, and the police officer says there's a warrant out for your arrest for a crime you're totally unaware of. "Someone can most certainly use your identity and impersonate you to commit a crime," says Susan Grant, director of consumer protection at the Consumer Federation of America.
[In Pictures: The 10 Strangest State Taxes]
You encounter problems with your medical insurance. You go in for a medical procedure and are informed that it won't be covered by your insurance because it's already happened. Or, more commonly, you receive bills for medical treatments that you never had, in which case someone used your identity and insurance to receive medical treatment.
Your mail is missing. If you don't receive your bank statement, there could be a problem. The perpetrator may have changed your address with the financial institution. If other pieces of mail are missing, it may mean the perpetrator is collecting information about you to develop a profile. Similarly, if you don't receive your email statement, someone may have conquered your online account and altered the settings to lock you out.
You receive unexpected mail. You might get a notice from the post office that your mail is being forwarded to another address, without having requested the address change. Or you receive a letter with respect to an account that you never opened. Other mailings that could be a sign of identity theft: You receive a credit card in the mail that you never applied for, or the IRS notifies you about unreported wage income that you didn't earn.
You find errors in your Social Security statement. If you receive your statement and see that the earnings reported are greater than your actual earnings in a given year, someone might have stolen your Social Security number and be using it for wage reporting services, Stephens says.
You're denied an application based on your credit. If you have good credit but are denied an application for, say, a new credit card or a loan, that may be an indication that your identity has been stolen.
You can't access your email. You attempt to access your email but find that your username and password have been changed without your knowledge, or a similar scenario happens for another online account. "That can be a sign that someone is covering their tracks for an identity-theft operation," Stephens says.
If you're a victim of financial identity theft, the first thing to do is contact your bank or financial institution. You should then conduct a full audit of your personal finances and identify any questionable transactions, recommends Rob Rachwald of data security firm Imperva. This information will be useful when it comes time to dispute the charges.
Stalcup worked with his bank to identify the perpetrator's charges, and the bank reimbursed him in full. As was his experience, the earlier you catch identity theft, the better.