How do you know if someone managed to take out a loan in your name, and can you do anything about it?

I don't know how it happened, but one of my coworkers was talking with their bank about taking out a loan. While doing so they were informed that several years ago a $12,000 loan was made under their name that has not been paid on since it's inception. Surely if a loan is taken out under your name like that there has to be SOMETHING to let you know that happened?