MY IDENTITY WAS STOLEN - NOW WHAT?
Your new credit card application gets denied because you have a low credit score, but you have always paid your credit card bills on time.
A collection agency calls and tells you of an overdue credit card account for a card that was never issued to you.
You could be the victim of identity theft. Identity theft involves someone (the "Identity Thief" or "Imposter") using your personal information for their (financial) benefit, like to obtain credit. When the Imposter fails to pay the debt, the company that issued the credit (or a collection agency on its behalf) comes after you.
Identity theft has become one of the fastest-growing crimes we see today. Because of the way our technological society works, almost everyone is at risk of having their identity stolen. Even worse, with the ability to commit this crime from almost anywhere in the world, an Identity Thief can rapidly run up debt in your name and then disappear into "cyberspace" before you even discover that a crime has been committed.
For anyone who has been through it, having your identity stolen is extremely frustrating. You can spend months or years - and thousands of dollars - cleaning up the mess an Identity Thief has made of your good name and credit record. In the meantime, victims of identity theft may lose job opportunities, be refused loans, or possibly even get arrested for crimes they didn't commit.
The purpose of this issue of e-Counsel is to educate you on steps you should consider taking if you suspect you have been the victim of identity theft. This newsletter also describes your legal rights and offers suggestions on how to handle specific problems you may encounter on the way to clearing your name. As always, this issue of e-Counsel is only intended to be an overview of the topic under discussion and is not intended to give specific advice regarding any person's particular situation. If you have any questions regarding this e-newsletter or how the topic may affect you, please do not hesitate to contact us.
How Identity Theft Occurs
Despite a person's best efforts, an Identity Thief can use a variety of methods to gain access to personal information and data. Some of the methods which have been employed in the past include:
Hacking computer information:
Stealing mail (including information contained in bank and credit card statements);
Dumpster diving (or rummaging through trash);
Obtaining a person's credit report;
Stealing credit or debit card numbers;
- Stealing personal information through e-mail or phone by posing as legitimate companies (known as "phishing" for online theft and "pretexting" by phone)
Once a theft has occurred, the Identity Thief uses the personal information for his or her monetary gain in a number of ways, including:
- Calling credit card company to change billing address on credit card and then running up charges;
- Opening new credit card accounts in the victim's name;
- Establishing phone or wireless service in victim's name;
- Opening bank account and writing bad checks;
- Authorizing electronic transfers and draining victim's accounts;
- Filing fraudulent tax returns in victim's name;
- Buying assets on credit (such as a car) in victim's name;
- Getting identification (such as a driver's license) containing victim's information, but the Identify Thief's picture.
Steps to Consider Taking if Identity Theft is Suspected
Although there is really no "best practices" on what should be done if you suspect that your identity has been stolen, we suggest you at least consider the following:
1. Contact Financial Institution.
Upon learning that you may be the victim of identity theft, you should consider contacting the credit or financial institution involved (although often times it is that credit or financial institution that notifies you of the theft when it tries to collect a debt which you did not incur or authorize). Most credit and financial companies have a phone number for reporting fraud (or a lost card if that is how the identity theft arose). Do not wait to report the loss of a credit or debit card.
2. Contact Credit Bureaus. You should consider contacting one of the major credit reporting organizations listed below to place a "Fraud Alert" on your name and Social Security Number:
Credit Bureau Phone Number Website
When you notify one of the above credit bureaus that you are at risk of being a victim of identity theft, it will notify the other two for you. Placing a fraud alert on your name and social security number means that your file will be flagged and that creditors are required to call you before extending credit.
3. Request Copy of Credit Report. Once you place a fraud alert on your file, you are entitled to order a free credit report. You should consider requesting this report to determine if your identity may have been stolen or compromised on other occasions. If you ask, you can have the report issued showing only the last four digits of your Social Security Number.
Once you receive your credit report, examine it carefully. Look for inquires from companies you haven't contacted, accounts you didn't open, and debts on your accounts that you can't explain. If you suspect fraud, report it in writing to the credit bureaus noted above (Equifax, Experion and TransUnion) as well as any credit issuers that were involved in the newly discovered fraud. You should further attempt to get the discovered fraud removed or blocked from your credit report.
4. Close All Accounts That You Know or Believe Have Been Tampered With or Opened Fraudulently. For each account that you believe has been tampered with or opened fraudulently, contact the fraud department of the company that issued the account and instruct them to close the account. Follow up this request with a letter to the company instructing them to close the account (including with the letter copies, but not originals, of any supporting documents which shows the unauthorized activity). If the Identity Thief has made charges on your accounts, or on fraudulently opened accounts, ask the company for the forms to dispute those transactions.
If and when new accounts are opened, use new personal identification numbers and passwords. Avoid using easily available information like your mother's maiden name, your birth date, the last four digits of your Social Security Number, or a series of consecutive numbers.
5. File Report With Local Police Department. Consider filing a report with the local police department and keep a copy of the report. If the police are reluctant to issue a report, ask to file a "Miscellaneous Incidents Report."
6. File Complaint With the Federal Trade Commission. Consider filing a complaint with the Federal Trade Commission. By sharing your identity theft complaint with the FTC, you will provide important information that can help law enforcement across the nation track down and stop Identity Thieves. The FTC's identity theft hotline is 1-877-IDTHEFT.
Resolving Specific Problems
While dealing with problems resulting from identity theft can be time-consuming and frustrating, most victims can resolve the issues if they are assertive, organized and know their legal rights. Some laws require you to notify companies within a specific time period, so do not delay in contacting companies to deal with problems as they arise.
The following is a list with suggested actions for specific issues which you can encounter:
1. Bank Accounts and Fraudulent Withdrawals. Different laws determine your legal remedies based on the type of bank fraud you have suffered. For example, state law generally protects against fraud committed by using paper documents, while federal law generally applies to electronic or paperless fraud.
The Electronic Fund Transfer Act provides consumers with protections for transactions involving an ATM or debit card. It also limits liability for unauthorized electronic fund transfers. You generally have 60 days to report any money withdrawn from your account without proper authorization. If you lose an ATM or debit card, you should report it immediately because the amount you can be held responsible for depends on how quickly you report the loss. Note that in addition to the Electronic Fund Transfer Act, most card issuers voluntarily have agreed to limit or waive consumer liability for unauthorized use of their debit cards, no matter how much time has elapsed. You should know your card issuer's rules and this may make a difference to you when deciding on which card issuer to use.
If an Identity Thief steals your checks or counterfeits checks from an existing bank account, stop payment, close the account, and ask your bank to notify the check verification service with which it does business. That way, retailers should be alerted not to accept these checks.
If you are having trouble getting a financial institution to help you resolve your banking related identity theft problems, try contacting the agency that oversees your bank (i.e., the FDIC, the FRS, the NCULA, the OCC, etc). You can ask your bank which agency oversees it or try to locate the agency yourself by visiting the National Information Center of the Federal Reserve at www.ffiec.gov/nicpubweb/nicweb/nichome.aspx and click on "Institution Search."
2. Correcting Fraudulent Information in Credit Reports. The Fair Credit Reporting Act (FCRA) establishes procedures for correcting fraudulent information on your credit report. Under the FCRA, both the consumer reporting company and the information provider (the business that sent the information to the consumer reporting company, such as a bank or credit card company) are responsible for correcting fraudulent information on your credit report. To protect your rights, contact both the consumer reporting company and the information provider.
Consumer reporting companies should block fraudulent information from appearing on your credit report if you send them a copy of an identity theft report and a letter telling them what information is fraudulent and proof of your identity (such as your name, social security number, address or other information they may request). Information providers should stop reporting fraudulent information to consumer reporting companies once you send them an identity theft report and a letter explaining that the information they are reporting resulted from identity theft.
3. Credit Cards. The Fair Credit Billing Act establishes procedures for resolving billing errors on your credit card accounts, including fraudulent charges on your accounts. The law also limits your liability for unauthorized credit card charges to $50 per card. To take advantage of the law's consumer protections, you must:
- Write a letter to the creditor advising them of the fraud, which letter should include your name, address, account number, and a description of the billing error, including the amount and date of the error;
- The letter should be sent to the creditor at the address given for "billing inquires" and not the address for sending in credit card payments; and
- The letter must reach the creditor within 60 days after the first bill containing the error was mailed to you.
4. Criminal Violations. If wrongful criminal violations are attributed to your name, contact the police or sheriff's department that originally arrested the person using your identity, or the court agency that issued the warrant for the arrest. File an impersonation report with the police department or the court, and confirm your identity. Ask the police department to take a full set of your fingerprints, photograph you and make copies of your photo identification documents, like your driver's license, passport, or travel visa. To establish your innocence, ask the police to compare the prints and photographs with those of the Identity Thief.
5. Debt Collectors. The Fair Debt Collection Practices Act prohibits debt collectors from using unfair or deceptive practices to collect overdue bills that a creditor has forwarded for collection, even if those bills do not result from identity theft. You can stop debt collectors from contacting you in two ways:
- Write a letter to the collection agency telling them to stop. Once they receive your letter, the company is not permitted to contact you again except to tell you there will be no further contact or that the creditor intends to take some specific action.
- Write a letter to the collection agency within 30 days after you received written notice of the debt, telling them that you do not owe the money. You should state that you are the victim of identity theft and include copies of documents that support your position, including a police report if you have one. If this is done, a collector can only renew collection activities if it sends you proof of the debt.
Once resolved, most identity theft cases stay resolved. Occasionally, however, victims have recurring problems. To stay on top of the situation, consider continual monitoring of your credit reports and read and review your financial account statements promptly. You may want to review your credit reports once every three months in the year of the theft and annually thereafter.
You should also stay alert to other signs of identity theft, including:
Failing to receive bills or other mail (missing bills can mean an Identity Thief has taken over your account and changed the billing address);
Receiving credit cards you didn't apply for;
Being denied credit or less favorable credit terms then seem reasonable;
- Getting letters from debt collectors regarding merchandise you didn't buy
We trust you have found this issue of e-Counsel to be interesting and informative. If you believe you are the victim of identity theft, we are here to help you. We can provide assistance in notifying and dealing with credit agencies, banks and financial institutions.
If you have any questions regarding anything contained in this issue of e-Counsel or if you have any ideas as to how we can improve our newsletter, please do not hesitate to contact us.
Circular 230 Disclosure
Under U.S. Treasury Department guidelines, we are required to inform you that (1) any tax advice contained in this communication is not intended or written to be used, and cannot be used by you, for the purpose of avoiding penalties that may be imposed on you by the Internal Revenue Service, or by any party to market or promote any transaction or matter addressed herein without the express and written consent of the Richard C. Petrofsky Law Office and Helfrey, Neiers & Jones, P.C., (2) the Richard C. Petrofsky Law Office and Helfrey, Neiers & Jones, P.C. imposes no limitation on any recipient of this tax advice on the disclosure of the tax treatment or tax strategies or tax structuring described herein, and (3) any fees otherwise payable to the Richard C. Petrofsky Law Office or Helfrey, Neiers & Jones, P.C. in connection with this written tax advice are not refundable or contingent on your realization of federal tax benefits from the advice contained herein.