What action is often taken when identity theft is suspected?

When identity theft is suspected, placing a security alert on the consumer's file is a common and effective measure. This alert notifies creditors to take extra precautions when verifying the identity of the individual applying for credit. It serves as a warning that the person’s identity may have been compromised, prompting lenders to take steps to confirm the identity of the applicant before approving any new accounts.

Implementing a security alert helps in preventing further unauthorized use of personal information and can mitigate damage while allowing the individual time to address the theft with financial institutions. This proactive step is critical in protecting the consumer's identity and financial assets during a distressing situation like identity theft. Other actions, such as conducting a financial audit or terminating an account, may also be relevant, but they do not directly serve the immediate purpose of protecting the consumer's identity in the same manner as placing a security alert. A temporary freeze, while similar, restricts access to credit reports entirely, which might not be the most immediate step one would take when identity theft is suspected.