ITRC Fact Sheet 116
Collection Agencies and Identity Theft
How to Effectively Clear Identity Theft Accounts from Collection Agency Records
This fact sheet is broken into four sections:
- General advice about corresponding with creditors and collection agencies
- A step-by-step guide to stopping and correcting the collection process
- Possible solutions for “worse-case scenarios”
- Resource numbers and websites
Many victims first find out about a case of identity theft when a credit issuer or a collection agency contacts them to collect money. It is distressing to receive a call or letter from a collection agency when the debt was created by an identity theft criminal. Further, many people become fearful that their financial reputation will be ruined permanently. Fortunately, collection agencies are regulated by a number of laws. They do not want to affect the wrong person’s credit or attempt to collect from someone who does not owe a valid debt.
In cases of identity theft, the consumer, creditor and collection agencies are all victims of the crime. Creditors and collection agencies are not going to get paid by a victim of identity theft. Unfortunately, there are individuals who claim identity theft but in reality are trying to avoid paying a bill they actually did incur. This makes life more difficult for collection agencies, creditors and the true victims of identity theft.
Even though the federal and state laws that guide collection agencies have been updated considerably, proper education on the behalf of consumers and creditors continues to be an important factor clearing your name. It is important that you understand your debt collection rights – see ITRC Fact Sheet FS 116A – Your Debt Collection Rights. For now, giving the creditor and collection agency sufficient information to prove the claim of identity theft is the key to getting the matter resolved.
- Always keep a detailed log of all communication with the creditor or collection agency, both written and by phone. Please refer to ITRC Fact Sheet FS 106 - Organizing your identity theft case.
- Send the proper documentation supporting your Identity Theft case (Police report, FTC Affidavit of Identity Theft, etc.). Ask for a written statement confirming any agreements or decisions told to you either in person or by phone. If the creditor or collection agency refuses, send them a letter of “Confirmation of Conversation” – ITRC Letter Form LF 100-2.
- Mail your correspondence to a collection agency, creditor or business by certified, return receipt requested. Keep a copy of all correspondence for your records.
- Maintain a professional demeanor when speaking with a creditor or collection agency. Losing your temper is counterproductive and frequently causes people to stop listening.
- When possible, speak with a fraud investigator or supervisor at the creditor or collection agency. If there is a routine procedure to handle identity theft cases, it is much easier to efficiently process your request. If this is a collection agency that has purchased your account, they are the final decision makers, not the original creditor.
- Do not tell the collection representative that you “dispute the account.” Instead, clearly state this is a case of identity theft and why this is true. For example: you either never opened the account, the charges on the account or accounts were not authorized, or other factual statements showing the identity theft.
- A collection agency must send you written notice of a collection within 5 business days of first contacting you by phone. You should respond within 30 days.
If you didn’t get the name and number of the contact person during the first call, you may wish to reconnect with the agency now. Let them know this is a case of identity theft and request the following:
- Name, address, email address, phone and fax numbers of the agency and your contact there who will be working with you
- Name, address and phone number of the referring credit issuer or merchant, preferably the fraud division
- Account number as recorded by the referring credit issuer or merchant
- The amount of the debt
- The dates of charges, the date the account was first opened, any transaction or application information the collection agency may have
- Their affiliation with the referring credit issuer or merchant. For example, are they a collection agency assigned the debt, the law firm that represents the creditor, or are they the finance or collection department of the creditor?
- The steps you must take and the information needed by the creditor or collection agency to support your claim of identity theft so the this account can be marked as “fraudulent”
- If this person is unable to answer any of the above questions, politely thank them for his/her time and ask for a supervisor or fraud specialist. Remember, this is not the time to vent your frustration. You need someone to help you. Request the forms necessary to clear this collection issue. See ITRC Letter Form LF 116 – Claim of Fraudulent Account to a Collection Agency.
- Contact the three Credit Report Agencies listed below. Request copies of your report and place a fraud alert with each one. As a victim of fraud, there is no charge for these reports. We do not recommend requesting this initial report over the Internet. You will get a more comprehensive report by calling.
- Once you receive your reports, go over them carefully. Please refer to ITRC Fact Sheet FS 128 – Reading a Credit Report. Look for any inaccuracies in the heading (name, address, date of birth, Social Security number), any accounts you may not have opened, and any applications currently pending that you did not initiate.
- Contact the police or law enforcement agency where you live. Report you are a victim of identity theft. Request a police report of an identity theft crime. An investigation number is not sufficient; you will want a copy of the report. Keep the original and make copies to send along with your fraud affidavits.
- If you are dealing with a collection agency, also contact the creditor or merchant who claims you owe the debt, preferably the fraud department, not customer service. Tell them this is a case of identity theft and request copies of the application and transaction information for the account. Find out the steps and all forms they require to remove this account from your name and Social Security number (SSN). Remember: this is not a “disputed account,” it is a case of identity theft.
- Contact the fraud department of any additional credit issuer, merchant, or financial institution that has reported an account you did not open. Follow the information given in ITRC Fact Sheet FS 100 – Financial Identity Theft: the Beginning Steps.
- Follow phone conversations with letters or affidavits of fraud to each collection agency, credit issuer and merchant with whom you spoke. Also send a list of accounts that are associated with the identity theft case to the credit reporting agencies.
- Request a written confirmation that you do not owe the debt and:
- That the account has been closed as fraudulent (by the creditor)
- Your name and SSN has been removed from the account records
- All three credit reporting agencies will be instructed to delete the fraudulent record.
- Keep this letter along with all other correspondence on this case in your files for at least 10 years.
- Check your credit reports again in about two months, allowing time to process the changes. It is also a good idea to check your credit report prior to making any major purchases on credit. Continue to monitor your reports periodically for the next five years to make sure that this account has not reappeared because it was sold or reopened for collection.
The Fair Credit Reporting Act states that a collection account deemed as fraudulent must be closed and marked as uncollectible unless new information indicates this may a true debt. It may not be resold, transferred, or traded once assigned as fraudulent.
If you believe that a creditor or collector is breaking the law, you are unable to resolve the “claim of identity theft” with the agency, or your “closed” account has been resold to yet another collection agency, you may want to talk with the following groups:
- The Better Business Bureau in your area. They will take a complaint, can tell you about other complaints about the same entity, investigate and report unfair practices, and help to mediate a resolution.
- The Federal Trade Commission is a federal agency with regulatory power of collection agencies and will allow you to file a complaint against them.
- Your state Attorney General, especially if there has been a violation of state law.
Federal Law: Fair Debt Collection Practices Act (15 U.S.C §§1692-1695)
FTC Facts: Fair Debt Collection http://www.ftc.gov/bcp/conline/pubs/credit/fdc.htm
FTC Identity Theft website: www.ftc.gov/bcp/edu/microsites/idtheft/
Credit Reporting Agency Contact Information
- Contact information for Equifax, Experian and TransUnion – See ITRC Solution 02