“My wallet’s gone!”

Fear and anxiety hit you the moment you realize your wallet has been stolen. You panic as your mind starts ticking off all the items in your wallet that may leave you vulnerable to financial and identity theft: your credit cards, your insurance cards, your driver’s license.

Once you confirm your wallet has indeed been stolen, take these steps immediately to protect your assets and limit your exposure to financial harm.

1. File a police report. Report the theft to local law enforcement while the events are still clear in your mind. Don’t assume it’s a minor issue the police will not pursue. If identity theft occurs, you will want documentation that you reported the loss.

The report should include a physical description of the wallet with a listing of its contents. Include where you think the wallet was stolen and any potential suspects. Finally, get the name and business card of the officer who filed the report for any follow-up communication.

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2. Contact your bank and other card issuers. This goes for credit, debit or ATM cards. Your liability may be limited, but the faster you report the theft the better.

The Fair Credit Billing Act (FCBA) of 1974 and the Electronic Funds Transfer Act (EFTA) of 1978 grant certain protections to individuals who lose a credit, debit or ATM card. The FCBA limits a person’s liability for the unauthorized use of a credit card to $50. If you act quickly enough and report the loss before the card is used, then the FCBA says you are not liable for any charges.

Your liability for a debit or ATM card varies depending on when you report the loss. If you report the card stolen before it’s used by a thief, your maximum loss is zero dollars. If the incident is reported within two business days, your maximum loss is $50. If you delay and wait more than 60 days after your statement is sent to you, the maximum loss could be all the money taken using your debit or ATM card.

3. Initiate a fraud alert. This critical step brings in professional organizations that routinely monitor your credit. When you issue a fraud alert, as a potential victim of identity theft you have the right to receive a free copy of your credit report. Also, any creditor will have to verify your identity before extending a line of credit. This makes it extremely difficult for a thief to open a new line of credit and run up a huge bill in your name.

The three major credit reporting agencies you must contact to initiate a fraud alert are:

  • Equifax (800) 525-6285
  • Experian (888) 397-3742
  • Trans Union (800) 680-7289

4. Tackle these odds and ends. Depending on the contents of your stolen wallet, you may have some additional work to do:

  • Contact your state agency if your driver’s license or registration was lost. Most likely you’ll need a replacement license with a new number.
  • Call your bank. If a check was in your wallet, the thief now has your checking or savings account number. You'll want to close that account and open a new one.
  • Notify your health insurance company to request a new policy number.
  • Find out what to do if your social security card was stolen.
  • Notify your auto insurance company so the thief doesn’t use your information if he has an accident.

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Protect yourself in advance

Take inventory of the items in your wallet from time to time. Remembering the contents of your wallet will be crucial if you ever have to file a police report. While you’re looking through your wallet, clean it out. If you’re carrying cards you don’t use, remove them and consider canceling the cards.

In addition, keep your wallet cash poor. With today’s access to financial resources through debit and credit cards, there’s little reason to routinely be carrying large amounts of cash.

Finally, the Identity Theft Resource Center recommends you never carry these items in a wallet:

1. Your  social security card

2. Your birth certificate

3. Bank account and routing numbers

4. Password cheat sheets

All of these items facilitate the quick use of your identity by a criminal. It’s tough enough to keep them at bay. Don’t make their job easier.

Questions: Has your wallet ever been stolen? Did it lead to a case of identity theft? What other measures would you consider taking if this happened to you? Respond in the comments section.

Brian Fourman is a stay-at-home dad who writes about home safety and personal finance.