By: Lance T. Denha, Esq.
It’s frightening to lose your wallet or discover that someone has used information about you for a fraudulent purpose. Identity theft has topped the list of consumer complaints filed with the FTC for 13 consecutive years and there’s no evidence that this year it won’t make the list for the 14th. Just how many victims of identity theft are there each year? Some estimate that the numbers from 2012 are at 12.6 million. From Target and Nieman Marcus to other data breaches and many Americans have a right to be concerned.
Know that ID theft is a crime.
The federal government and many states have enacted specific laws against ID theft.
You can get detailed advice by calling the Federal Trade Commission’s ID Theft Clearinghouse toll-free at 877-438-4338 or going to www.consumer.gov/idtheft. You can also provide information about your problem, which will help law enforcement agencies investigate and track ID theft. The FTC will send you a free booklet, “ID Theft: When Bad Things Happen To Your Good Name,” or you can get it online. There are other steps that you might want to take right away.
If you believe that someone is using your identity illegally, report the crime to a law enforcement agency. It isn’t always possible for agencies to investigate every case, but making an official “identity theft report” can help you solve problems resulting from the ID theft. The “identity theft report” must be a document that subjects the person filing it to criminal penalties for providing false information. This is intended to discourage people from filing phony reports to try to avoid paying legitimate debts, not to prevent legitimate ID theft victims from reporting the crimes. You can report the crime to:
• The police department where the theft occurred
• Your local police
• A state or federal agency, including the U.S. Postal Inspection Service (do not use a complaint to the FTC as an official identity theft report).
When a financial account is involved, contact the bank immediately. If your credit card, debit card, ATM card, or checks have been lost or stolen, or if you suspect that someone has obtained your account number for fraudulent purposes, inform the financial institution promptly and ask what you need to do to protect your money.
Know your payment rights. Under federal law, you are not responsible for more than $50 if someone uses your credit card without authorization, and most issuers will remove the charges completely if you report the problem as soon as you discover it. While your losses could be greater if someone uses your debit card, the card issuer may have a policy that offers you more protection than federal law provides. You can contest checks that have been used with your forged signature or unauthorized withdrawals from your bank account.
Respond quickly to debt collectors. If debt collectors contact you about accounts opened in your name or unauthorized charges made to your existing accounts, respond immediately in writing, keeping a copy of your letter. Explain why you don’t owe the money and enclose copies of any supporting documents, such as an official identity theft report. You have the right to ask the debt collector for the name of the business that is owed the debt and the amount owed. And you have the right to ask that business for copies of the credit applications or other documents relating to any transactions that you believe were made by the ID thief.
Put a fraud alert in your credit files. This will oblige creditors to take extra precautions if someone applies for credit in your name to verify that it’s really you. There are two kinds of fraud alerts. An “initial fraud alert” does not require you to provide a copy of an official “identity theft report” and stays on your credit records for at least 90 days. This is the kind of alert to use if you think you might be a victim but you’re not sure – for instance, if you lost your wallet or you find out that someone has gotten access to the customer records at a place you do business. An “extended fraud alert” should be placed when you have reason to believe that someone has illegally used your identity. You must provide a copy of an official “identity theft report” to request an extended fraud alert, which will stay on your credit records for 7 years.
Get free copies of your credit reports. When you file a fraud alert, the credit bureaus will contact you with information about how to get free copies of your credit reports. If you filed an initial fraud alert, you are entitled to one free copy of your credit report from each of the bureaus. If you filed an extended alert, you will be able to get two copies from each of the bureaus, one right away and the other within 12 months. This will help you monitor your account for problems. Since the information at the credit bureaus may be different, be sure to get your reports from all three.
Follow the instructions to dispute any accounts you didn’t open, charges you didn’t make, or other information that isn’t accurate. Be specific about any information that you believe is the result of the ID theft. You can permanently block that information from your credit files; you will be asked for a copy of your official identity theft report to do so. As with fraud alerts, you only need to report problems with your credit reports to one of the bureaus, and it will share that information with the other two (see contact information above).
Keep checking your credit report regularly. A new federal law entitles all consumers to ask each of the three major credit bureaus for free copies of their reports once in every 12-month period. This free annual report program started in late 2004 and is being phased in gradually across the country, from West to East. Go to www.ftc.gov/credit or call 877-382-4357 for more details and to see when you can make your requests. You don’t have to ask all three credit bureaus for your reports at the same time; you can stagger your requests if you prefer. Do not contact the credit bureaus directly for these free annual reports. They are only available by calling 877-322-8228 or going to www.annualcreditreport.com. You can make your requests by phone or online, or download a form to mail your requests.
Your state law may also entitle you to free credit reports. Ask your local consumer protection or state attorney general’s office. Any rights your state law gives you are in addition to your rights under federal law.
Be cautious about offers for credit monitoring services. Why pay extra for them when you can get your credit reports for free or very cheap? Read the description of the services carefully. Unless you’re a victim of serious and ongoing identity theft, buying a service that alerts you to certain activities in your credit files probably isn’t worthwhile, especially if it costs hundreds of dollars a year. You can purchase copies of your credit reports anytime for about $9 through the bureaus’ Web sites or by phone: Equifax, 800-685-111; Experian, 800-311-4769; TransUnion, 800-888-4213.