From Identity Theft Resource Center

Fact Sheet 100 - Financial Identity Theft - The Beginning Steps

Posted in: Fact Sheets, Identity Theft News
By Identity Theft Resource Center
May 2, 2007 - 12:55:25 PM

Fact Sheet 100
 FINANCIAL IDENTITY THEFT – THE BEGINNING STEPS

Fact Sheet 100A will take you through the more complex steps

This guide includes:

  • What You Need to Know Before You Start
  • Your rights under the law
  • Organizing your case
  • Working with the Right People
  • Terms you should know
  • Assessing the Damage and Beginning Steps (including how to read a credit report)
  • Continuing the Recovery Process
  • Collection Agencies
  • Additional Resources

There are five major types of identity theft: financial, criminal, commercial, governmental, and cloning. This guide deals with the preliminary steps of financial identity theft.

Other guides on the ITRC website will address other aspects of this crime including Lost and Stolen Wallets, Dealing with Collection Agencies, Check Fraud/Theft, Family Identity Theft, The Evidence Trail, Medical Identity Theft, Enhancing Communications with Law Enforcement, and Financial Identity Theft: The More Complex Cases.

WHAT YOU NEED TO KNOW BEFORE YOU START:

Your rights under the law:

1. To have a police report taken. Many states do not have a specific law about this but if you are persistent you should be able to get a report in the jurisdiction where you live.  With a police report you are entitled to:

  • A 7-year fraud alert
  • A credit freeze in the states that have adopted this procedure into law
  • Have inaccurate or fraudulent information blocked from your credit report
  • Receive a copy of all application and transaction records on accounts opened f raudulently in your name (FCRA Section 609e)

2. Have the account removed from your credit report once you have provided evidence the account is fraudulent. This includes any collection actions or inquiries.

Organizing Your Case: See ITRC Fact Sheet 106 for detailed information

1. Keep a detailed log in a spiral or composition book of all phone calls you receive or make. Including the names or people, their title, phone numbers, company name, and what was said during the conversation. Keep loose papers in a notebook or an accordion folder.

2. Send all correspondence to collection agencies, credit issuers and other entities via certified mail, return receipt requested to confirm the letter has been delivered. Keep the postcard that you receive for evidence if necessary.

3. Confirm all conversations and agreements in writing. The person who made an oral agreement with you may not be at that company two months later.

4. Keep all receipts of expenses and copied of correspondence.

Working with the Right People:

The biggest waste of time is talking with the wrong people. Keep in mind that whenever possible you want to speak with someone on the investigative or fraud side of a company or governmental agency.

  • Collection agencies and credit issuers: Customer service helps with billing. You want to speak with a fraud investigator or the legal department of a small company.
  • The Social Security Administration does not work on financial identity theft cases. SSA only gets involved through their Office of Inspector General if there is benefit fraud or theft of benefit checks.
  • Law enforcement: Talk with your local police department or the department where the crime is occurring. The Secret Service and FBI only get involved upon the request of local law enforcement or the U.S. Attorney General’s Office. Typically these are large money or multiple victim cases or cases involving cybercrime.
  • When mail theft or fraud is an issue, speak only with the Postal Inspector’s Office, not a post office manager.
  • When speaking to a Department of Motor Vehicles, ask for a fraud investigator.

TERMS you should know:

  • FCRA – Fair Credit Reporting Act
  • FACTA – Fair and Accurate Credit Transaction Act
  • FDCPA – Fair Debt Collections Practices Act: you can get a copy of this at www.ftc.gov
  • SSN – Social Security Number
  • CRAs – These are the 3 major Credit Reporting Agencies – Equifax, Experian, and TransUnion
  • Fraud Alert – Federal law instructs credit issuers to contact you prior to approving an application. However, it is not widely enforced and not 100% reliable. ITRC has found fraud alerts to be about 65-70% effective. They don’t affect your credit score but might slow down the credit issuing process for a thief! (see ITRC-Debix message)
  • Security or Credit Freeze – With a freeze, a company may not look at your credit report for the purposes of establishing new lines of credit. Companies you already have an existing relationship with (example: a credit card, loan or utility service) may view your reports but only to review your credit-worthiness. Placing a freeze is a strong step to take and will affect your ability to get instant credit since it can take up to 3 days to thaw a report. However, it also locks out thieves, and that is the purpose. In those states with freezes, most laws state that victims with a police report get this service for free. Some states also allow the consumer to buy a freeze. You may thaw your freeze anytime you wish to apply for credit but you will need to plan ahead. See Fact Sheet 124 for more information or our State & Local Resources to see if your state has a freeze program.
  • Passwords – Your mother’s maiden name should never be used as a password or a word that is easily known to you such as a pet’s name. Use an unusual or made-up word such as “banapple.” Place passwords on all bank accounts and credit cards as a proactive prevention action against account takeover.
  • FTC – Federal Trade Commission: the governmental agency that oversees identity theft issues. All victims should report their case when they have time to 877-IDTHEFT or to the website: www.consumer.gov/idtheft . The information the FTC collects is vital statistical information and they have a booklet that will also help guide you.
  • EPTA – Electronic Transfer Act: provides consumer protection for all transactions using a debit card or electronic means to debit or credit an account. It also limits a consumer’s liability for unauthorized electronic fund transfers.

Assess the Damage and Beginning Recovery Steps

1. Stolen credit cards, checks, ATM or debit cards – Contact the financial institution immediately and close the affected accounts. Put passwords on the new accounts. If you never made a copy of the card, you should be able to find a 24/7 phone number on the back of a billing or bank account statement.

2. Account Takeover – If a bank, credit card or debit account has been taken over by another person (charges you didn’t make appear on your monthly statement), close the account and open a new one. In most cases you need to notify the company (bank or credit card issuer) within 30 days, so act quickly. It is vital to check statement monthly as few financial institutions allow a “grace” period longer than the contractual agreement (on the back of your monthly statement). Add a password for protection. If checks are involved see Fact Sheet 126 for details. A password on the account will also prevent a thief from changing the billing address or adding a name to the account.

3. Stolen-Lost Wallets – If your wallet has been taken follow the steps in
Fact Sheet 104

4. If your Social Security Number has been taken, order your credit reports from all three CRAs.

  • The best way to evaluate how bad your case might be is to examine your credit reports. You may call the CRAs 24 hours a day, 7 days a week. At this time, English is the only language being used.
  • When ordering your credit reports, you will have an opportunity to place a FRAUD ALERT (see Terms to Know). The initial fraud alert will only last for 90 days. (see ITRC-Debix message). It is renewable, using the same phone number and procedure you used to place your first fraud alert. It may be extended to 7 years when you write the agency and send a copy of your police report verifying you as an identity theft victim. A fraud alert will not affect your credit score.
  • Please understand, you will NOT be speaking with a person. These are automated systems and it is safe to give them your Social Security Number. You will be asked a number of questions to confirm you are you. This is for your security and to ensure they don’t send out a credit report to the wrong person. You will have access to a fraud assistance advisor once you receive your reports in the mail.
  • While the first credit reporting agency you call will state that they will contact the other two agencies for you, ITRC recommends you empower yourself and make sure the job is done by calling all three agencies. These are separate companies and they may have different information about you causing one of them to not send a report to you.

You may also ask that your entire SSN is not on the report mailed to you, a good safety measure. Be sure that you have a locked mailbox in which you receive mail – a good tip for everyone.

The primary contact numbers for the CRAs are:

  • Equifax: Call (800) 525-6285. TDD: (800) 255-0056
  • TransUnion: Call (800) 680-7289. TDD: (877) 553-7803. Fraud victims can also email fvad@transunion.com  but we recommend that you do not send Social Security numbers via email if avoidable.
  • Experian: Call (888) 397-3742

5. Don’t rush into taking a short-cut and buying a “tri-report” (three-in-one report). It could cut you off from fraud investigators at the CRAs. The reports generated by placing a fraud alert will have additional information that is not on a “tri-report.”

  • Credit reports generated by banks and businesses do not contain much of the necessary information to deal with an identity theft issue. Credit reports generated by placing a fraud alert include contact information for companies with open accounts in your name. (See ITRC/Debix message)
  • When placing the fraud alert, should you hear that the information you have provided does not match the information on file, this is a clear indication that there is a problem. This may mean that a thief has used an address with such frequency that it appears to be your primary address. In that case, follow the directions given and mail your request (with the requested documents) to the address given, which may vary from state to state.
  • During the time the fraud alert is in place, if there is an inquiry into your credit status, you should be notified by a phone call from the company making an inquiry to confirm with you that you really requested the new line of credit.

6. Review Your Credit Report Carefully:

See Fact Sheet 128  How to Read Your Credit Report for more detail on reading your credit reports.

Credit reports are divided into five major sections. These sections may not be in the same order as listed below.

  • The header: This is where you will find your information such as name, date of birth, address, Social Security Number and spousal information. There may be information about your yearly income or employer.
  • Section 1: These are the accounts that you have open or have had opened during the last seven years. You will need to verify that it is an account that belongs to you. These are cases where the name of the company will not be familiar. You may need to verify the account by comparing the account number to the number on your credit cards or billing statements. Some credit reports separate this section into “Accounts in Good Standing,” and “Accounts that Negatively Affect Your Report.”
  • Section 2: This is the section where inquiries are logged. Inquiries come in several different versions. One is that the company making the inquiry has an application in their possession and wish to verify your worthiness for credit. The other inquiry is by companies that you currently have a financial relationship with and it serves as an account review.
  • Section 3: This section will display lists of companies that have acquired your information so that they can offer you a pre-approved credit card solicitation.
  • Section 4: Will display a list of previous addresses where you have lived (if not in the header section).
  • Section 5: Consumer alert information. This is where information about fraud alerts and other information from the consumer are placed.

Continuing the Recovery Process

1. Contact the Police in the jurisdiction where you live and file a Police Report. You will need to obtain a physical copy of this police report, not just a case number. This is a critical document required to clear your name.

 2. Contact all credit issuers, utility companies and collection agencies that have opened a fraudulent account. Speak only to a FRAUD INVESTIGATOR. Then:

  • Request to close the account(s)
  • Request the company mail you a fraud alert or an address to send either our Letter Form 100 - 1 or the FTC affidavit ( http://www.ftc.gov/bcp/edu/resources/forms/affidavit.pdf ) along with your police report. Always mail out certified with return receipt. If the company does not request document information from you, then they are most likely not clearing the account.
  • Inform then that they may not sell, share, exchange, give away, donate, and/or trade this account to any other entity for the purposes of collection while it is under investigation.

3. Get Application and Transaction Records – FCRA section 609e requires companies to send you any documents they have. You will need to send an affidavit and a police report to receive copies of transaction and application records. A copy may also be sent to a designated police department. These documents may contain valuable evidence to point to the thief or help you to clear your name. The credit issuers must send you this information within 20 days (FCRA/FACTA). This demand is already part of Letter Form 100-1. Highlight it if you wish.

4. Once you get the information from the credit issuers, contact the investigating law enforcement agency and provide the information to them.

5. Contact the 3 CRAs using the form they provide for “correction of errors.” The Fair Credit Reporting Act (FCRA) says they must remove the information unless credit issuers prove it is a true account. Ultimately the credit issuer must be the one to remove fraudulent accounts from your credit report permanently. The credit issuers also must correct any erroneous information including addresses, phone numbers, birthdates and other information falsely provided by the thief. (see ITRC/Debix message)

6. Get Letters of Clearance from the credit issuers. Keep these for at least 10 years.

7. Check your credit reports and make sure all corrections have been made.

8. If your state has a credit freeze law – look carefully at that option. The steps to take are in Fact Sheet 124  Credit Freeze and Fraud Alerts . This is a strong step to take and will affect your ability to get instant credit because it can take up to 3 days to thaw a report. In many ways this is the only truly proactive step you can take to stop a thief.

COLLECTION AGENCIES

ITRC has written an entire guide for this activity. See Fact Sheet 116 Collection Agencies and Identity Theft for complete details.

ADDITIONAL RESOURCES:

  • See Fact Sheet 108 Overcoming the Emotional Impact about the Emotional Impact of this crime. Please note that the identity theft recovery process may take time. It will not be resolved overnight and you must be mentally prepared to take the necessary time to clear it up. Find a healthy stress reduces and build a support team to help you during this period of your life.
  • The FTC has a publication entitled “Take Charge.” You can get a copy mailed to you or download this document from www.ftc.gov/bcp/edu/pubs/consumer/idtheft/idt04.shtm  . You may call them at
    877-ID-THEFT or review their website: www.consumer.gov/idtheft
  • www.identitytheft.org – This resource material was written by an attorney and identity theft expert, Mari Frank. Please remember to indicate that the Identity Theft Resource Center referred you.
  • To report fraudulent use of your checks:
    • Chexsystems: (800) 428-9623
    • Certigy/CPRS: (800) 437‑5120
    • International Check Services (ICS): (800) 526‑5380
    • SCAN: (800) 262-7771
    • TeleCheck: (800) 710‑9898
  • FBI/NW3C Internet Fraud Complaint Center: www.ic3.gov 
  • California Office of Privacy Protection, (Dept. of Consumer Affairs), (866) 785-9663. Web: www.privacy.ca.gov 
  • Florida AG ID Theft Hotline: www.myfloridalegal.com/identitytheft  or 866-966-7226

Sample Letters:


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