It's something many of us dread: the sudden realization that our purse or wallet has been lost or stolen. The biggest concern at this moment is identity theft - the Federal Trade Commission estimates that up to 9 million Americans are the victims of identity theft each year. (For a related reading, see Tips For Keeping Your Financial Data Safe Online.)

IN PICTURES: 8 Financial Tips For Young Adults

It's important to act fast to minimize the risk. Here's a checklist of things you must do immediately:

  1. Clear Some Time in Your Schedule
    Trying to do damage control isn't easy - in its 2010 Identity Theft Fraud Survey Report, Javelin Strategy & Research found that consumers spent an average of 21 hours on fraud resolution. But the process often becomes more time-consuming the longer you wait, so moving quickly can save you valuable time.

  2. Contact the Police
    Unfortunately, arrests in purse-snatchings are rare, unless a thief tries to use one of your cards in a local store. But you may need the police report to avoid being held liable for fraudulent charges.
IN PICTURES: 5 "New" Rules For Safe Investing



  1. Alert Your Bank
    If your purse or wallet contained your ATM card or checkbook, you need to contact your bank right away to cancel your accounts. Several different types of state and federal laws come into play here, so your potential losses depend on your location and the exact type of tactic the thief uses - say, writing a bogus check versus initiating a fraudulent electronic transfer. (To learn more, check out 5 ATM Scams That Can Break The Bank.)

  2. Notify the DMV
    Not only will you need to get your driver's license replaced, but you'll also want to find out what you need to do to ensure that you won't pay the consequences if someone else gets pulled over with your stolen license.

  3. Cancel any Debit or Credit Cards
    With debit cards, federal law determines liability based on how quickly you report the theft or loss, says Barbara Stark, director of education and community development for American Debt Counseling. Reporting the incident before the card is used relieves you of responsibility for any unauthorized transfers. You will be responsible for $50 of unauthorized use if you report it within two business days, yet if you wait until after two days you can be liable for up to $500. With credit cards, under federal law, the most you will owe for unauthorized charges is $50 per card - and there is no charge if you report the loss before the card can be used. (To learn more, see Debit Card Fraud: Is Your Money At Risk?)

  4. Contact the Credit Bureaus
    Call Experian, TransUnion and Equifax and ask them to put a "fraud alert" on your files. You will then be contacted whenever someone tries to open credit in your name. Keep in mind, this will mean you will have to jump through a few extra hoops when opening new credit accounts yourself because creditors will need to verify your identity, but the protection is worth the hassle.

  5. Go Beyond the Obvious
    Think about what else is in your wallet that thieves may be able to use. What about your insurance card? Believe it or not, some scammers try to use other people's insurance coverage - this is known as medical identity theft. Also, if thieves have access to your phone number, they can run up charges on your cell phone or even open another account in your name.

  6. Monitor Your Situation
    One of the most frustrating things about identity theft is that it can often crop up long after you think you're in the clear. Keep watching your credit reports. You're allowed one free report per year from each of the three credit bureaus. You can get your free report at www.annualcreditreport.com but it might be worth paying the monthly fee for a credit monitoring service. (To learn more, read Consumer Credit Report: What's On It.)
One Final Tip
Preventative measures can help you save time if this happens to you. Make a photocopy of all credits cards and other contents of your wallet. Also, only carry what you absolutely need - and never keep your Social Security card in your wallet. (For more tips, see Identity Theft: Who To Call For Help.)

For the latest financial news, check out Water Cooler Finance: Google Shakes Things Up.

Related Articles
  1. Stock Analysis

    Best Stocks to Buy for Around $1 (NXTD, MBII)

    Watch for strong technical indicators and other positive information when considering the purchase of any stock trading in the $1 range.
  2. Credit & Loans

    A FICO-free Loan? See SoFi's Super Bowl Ad

    Non-bank lender SoFi will air its first TV ad during Super Bowl 50. Here's how it's challenging big banks by providing an alternative approach to loans.
  3. Credit & Loans

    10 Reasons To Use Your Credit Card

    There are several benefits to paying with credit instead of debit, if you use a credit card responsibly.
  4. Credit & Loans

    5 Extreme Ways To Raise Your Credit Score

    Desperate to rebuild your credit score because you can’t obtain a loan with a decent interest rate? Here are some extreme options to try.
  5. Personal Finance

    The Top 5 Personal Finance Experts to Follow in 2016

    Here is a look at five money and investing experts who can help you reach your financial goals for 2016.
  6. Economics

    What is a Trade Credit?

    Trade credit means that a customer purchases goods from a seller who allows the purchaser to pay for those goods at a later time.
  7. Investing

    Amazon Financing Now in the U.K.: Is America Next?

    Amazon has unveiled a great credit product in the U.K. Will America be the next country to have access to this financing option?
  8. Credit & Loans

    Why You Should Use Your Credit Card For Purchases

    Responsible credit card users who always pay off their monthly balances should use their cards to buy everything.
  9. Retirement

    6 Methods to Maintain a Healthy Credit Score During Retirement

    Learn how to improve your credit score during retirement. Your credit score still matters in retirement, and these tips can give it a boost.
  10. Credit & Loans

    The Fed's Interest Rate Rise & Your Credit Cards

    The U.S. Federal Reserve recently raised the lending rate from 0% to 0.25% – the first time since 2006. How does that affect your credit card payments?
RELATED FAQS
  1. Can a debt collector contact me about a debt that's no longer on my credit report?

    According to Experian, a debt collector is permitted to contact a consumer about a debt that is no longer on the consumer's ... Read Full Answer >>
  2. How can you pay your Walmart credit card?

    Holders of Walmart credit cards can make payments on their balances due by mail, online or at Walmart and Sam's Club stores. ... Read Full Answer >>
  3. How many free credit reports can you get per year?

    Individuals with valid Social Security numbers are permitted to receive up to three credit reports every 12 months rather ... Read Full Answer >>
  4. Is Apple Pay safe and free?

    Apple Pay is a mobile payment system created by Apple to reduce the number of times shoppers and buyers have to pay for goods ... Read Full Answer >>
  5. Does Netspend report to credit bureaus?

    NetSpend does not report to credit bureaus in any capacity. NetSpend is a prepaid debit card program that allows cardholders ... Read Full Answer >>
  6. Can you use your Walmart credit card at Sam's Club?

    Consumers can use their Walmart credit cards to shop at Sam's Club. However, they cannot use their Walmart credit cards when ... Read Full Answer >>
Trading Center