A Stolen Wallet May Be Worse Than You Thought - TheStreet

Hayden Blood received a surprising call from Washington Mutual (WM) - Get Report about a year ago.

Apparently, her wallet had been snatched as she sat in a

Starbucks

(SBUX) - Get Report

, purse slung over her chair, on a warm summer afternoon in New York. Within an hour and 20 minutes, the thieves had used her credit cards to purchase $10,000 worth of merchandise -- including

Louis Vuitton

(LVMUY)

handbags and gift cards -- at a nearby Bloomingdale's. They also emptied out her personal checking account with WaMu, though there wasn't much in it.

Blood, a communications manager with Starwood Hotels and Resorts, notified all the proper agencies and companies of the fraud, recouped her losses and closed down her accounts. She went to Washington Mutual the next day to open a new personal account, but left open the joint-checking account that she shares with her husband.

Blood also placed a fraud alert on her account, which lasts for 90 days, and thought she was in the clear.

Then, on the 91st day, the thieves visited three separate Washington Mutual branches with her driver's license. They deposited stolen checks into her bank account and withdrew the pilfered funds. They also accessed her joint account, and withdrew all of those funds as well.

"We felt like we had done our due diligence, but they were apparently professionals or very savvy -- or she looked like me," Blood says.

All told, the crooks stole $20,000 from Blood's accounts, with another $10,000 of Washington Mutual's money. The bank was forced to repay Blood and ultimately take the hit, though the process was long and complicated. Not only did she have to deal with the typical bureaucracy, but happened to be vacationing in Costa Rica at the time of the fraud, making the bank wary of her tale.

"My friends loaned $200 to make it back to the U.S.," she says. "But I didn't have any money in the bank and

WaMu wouldn't give me any money because they argued that I could have been in cahoots because I left the country."

At the time, Blood was also in the process of buying an apartment. The fraud only complicated matters.

Blood's case is extreme, but lost and stolen purses or wallets are not rare. The Federal Trade Commission has

established several steps

for consumers who have had personal information lost or stolen.

1. Close bank and credit card accounts immediately

. Place passwords on your new accounts, but avoid using any obvious codes, like your mother's maiden name, your birth date, the last four digits of your Social Security number or your phone number. Blood eventually went a step further to close all her WaMu accounts and start fresh at a different bank. She also informed the new outlet of the past fraud to protect her new accounts.

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2. Place a fraud alert on your credit report

.

Equifax

(EFX) - Get Report

, Experian and TransUnion are the three major credit monitoring companies, and each has a toll-free number to report possible fraud. While Blood placed a basic, 90-day alert, extended alerts -- which require more documentation -- last for seven years.

3. Contact government agencies that issued any missing identification

. The Department of Motor Vehicles and other agencies have established procedures to cancel the document and receive a replacement. Make sure the agency also flags your file to ensure that others can't use your name for unauthorized purposes.

4. Contact authorities

. If your wallet was stolen, report it to the police immediately. If your information has been used inappropriately, file complaints with the police as well as the FTC.

5. Check financial statements frequently

. Monitor bank accounts, credit-card accounts and credit reports frequently to ensure that no unauthorized activity has occurred. Alert companies to suspicious activity immediately. All consumers are entitled to a free credit report once a year, which can be accessed at

Annual CreditReport.com

.