What to Do If You're a Victim of Identity Theft 

Step 1:  Freeze Your Credit.  The Fair Credit Reporting Act was updated in 2018 to require the three major credit reporting agencies, Equifax, Experian, and TransUnion, to let you very quickly and easily freeze and unfreeze your credit.  This is the first thing you should do if you believe someone has gained access to your name, date of birth and social security number.  It's actually a good idea to always have your credit frozen since it's very easy to unfreeze it when you want to apply for new loans and credit.  Freeze and unfreeze your credit at TransUnion.com, Experian.com and Equifax.com.

Step 2.  Contact your Credit Card Issuers and Bank.  If your wallet has been stolen or burglars took your credit cards, ask both your credit card bank and checking / savings account banks to issue you new account numbers and be on the alert for suspicious activity.  Do not close your credit card accounts permanently as this will likely lower your credit score.  Don't forget to change the account number information for your online accounts, automatic bill pays, etc., once you get your new numbers and cards.

Step 3:  File a Police Report --  The companies who have issued credit in your name will never take you seriously if you don't file a police report.  You must do this in order to protect your legal rights and obtain a free copy of your credit reports online at the three major credit reporting agencies listed in Step 1..  Often, this creates a problem in that the person who has committed the fraud is either a close friend or a relative and the victim might not want to press charges.  Many police departments allow you to file an identity theft complaint online, so before you make the time-consuming trip to your local precinct, visit their website and you'll likely fine a form that allows you to do this online and print it out.

If you discover that a relative or friend is the one who has stolen your identity (and this happens a lot), the company that issued the credit in your name might tell you that you must press charges in order to get out of paying the debt.  Several legal experts have argued that you do not have to press charges and should not allow yourself to be bullied into pressing charges. You might find more information about this subject at the website www.consumer.gov.

Step 4:  Contact Your Local Post Office --  If your identity was assumed because someone stole your mail to obtain your account numbers, credit card numbers, etc., you need to officially report this fact to your local postmaster.  You need to do this step to make sure the post office ignores any change of address forms submitted to them in your name.

Step 5Contact the Social Security Administration and Department of Motor Vehicles -- If the thief is using your social security number or drivers license number to commit fraud, you might need to get new numbers from these agencies to stop the thief.  It is very difficult to get these agencies to issue you a new number, particularly the social security administration.  If you want a new number, you must make an appointment at a local office near your home and bring in lots of proof to justify your request for a new number.  You should claim your identity at the Social Security website even if you aren't a victim of ID theft -- you should do that now anyway to prevent someone else in the future from claiming your identity and trying to steal your future benefits. Set aside a good amount of time to do this as they will put you through the ringer making sure you are the correct person.

Step 6:  Contact the Federal Trade Commission --  The Federal Trade Commission is the federal agency in charge of consumer complaints about identity theft. The information you provide can help the FTC and other law enforcement agencies track, investigate and prosecute identity thieves.   You can report yourself as a victim of identity with the FTC using their online form at www.ftc.gov.   The FTC is not going to investigate or take any action on your behalf.  You can also visit www.consumer.gov for lots of information about identity theft.

Step 7.  Contact the Companies who Gave Someone Else Credit in Your Name.

There is the possibility that the company or companies who gave credit to someone else in your name will not believe you are the victim of identity theft, but rather, a low down dirty scumbag trying to get out of paying your debts. Therefore, don't expect them to apologize for getting you into this mess in the first place.   And don't expect them to reimburse you for your time and expenses.  There is no law requiring them to reimburse you for their negligence; however, the Fair Credit Reporting Act was updated in 2018 to include provisions forcing them to investigate claims of identity theft.

You should never communicate with these companies exclusively by telephone.  Phoning does not protect your rights as there is no proof that the communication ever took place.  Not sending certified letters could result in the following: The company turns the account over to a collection agency. You advise them that you told the original creditor you were a victim of identity theft, but the collector argues that there is no record of this, and, since you failed to notify them in a timely fashion, you are responsible for paying the debt.  If it becomes evident early on that they are ignoring your disputes, consider corresponding only by certified mail.

Your certified letter should officially notify them that the account was fraudulently opened by someone else using your name.  Send copies of all proof of this, such as the police report you filed, the complaint you filed with the FTC, etc.  Also, ask them to close the account and remove it from your credit files with the credit bureaus to whom they subscribe.  REQUEST THAT THEY COMMUNICATE WITH YOU IN WRITING AND NOT BY TELEPHONE.

When you inform a company that you didn't open the account, they might respond with a request for you to send them a statement, perhaps notarized, wherein you officially claim you are the victim of identity theft and did not open the accounts nor use them to make purchases.  The typical notary charges $20.00 to notarize a document.  If the thief has opened 3, 4, or more acccounts in your name, you can see how expensive cleaning up the mess is going to be.  Some victims have had to spend as much as $240.00 getting documents notarized.

As long as you can prove that you didn't open the fraudulent account(s), there is little chance that you will have to pay the bill.  However, the major damage that occurs from identity theft is the damage to one's credit rating.  Victims sometimes have a hard time keeping these accounts off of their credit reports -- they're deleted, then reappear, then are deleted again, only to reappear.  Some people have actually become so frustrated that they decided to pay the accounts in hopes of improving their credit rating, but you should never do this.

Some unscrupulous banks will insist that you must pay for the fake checks used to pull money out of your account and even the overdraft charges, etc. that resulted from the fraud.  But a former bank president wants you to know that this is not true -- that banks have a duty to verify each and every check and are responsible for reimbursing you for money taken out of your accounts fraudulently.  He advises you to take them to small claims court if they refuse to reimburse you for monies taken from your bank accounts.

Be aware that creditors want you to give up and give in and pay for whatever the thief has taken from them.  This is why they often act incompetent when they are told about identity theft -- it is to encourage victims to give up and just pay the debt.  But don't!!!!  Instead, send certified letters demanding the accounts be permanently removed from your credit report.  Save copies of these letters and the green certified receipt postcards you get back from the post office.  Send proof to the credit bureaus as well, demanding that the accounts be removed from your credit report.  If you have to take legal action, then do so, but don't be bullied into paying debt that isn' yours.

Can you sue the creditor for negligence? 

Not likely.  Even if you did, you wouldn't get much out of them.  Congress allows creditors to issue credit negligently -- even recent updates to the Fair Credit Reporting Act allow them to continue issuing credit negligently and letting the consumer eat the cost.  This is because the banking industry contributes heavily to congressional campaigns and Congress rewards them by letting the banking industry operate with little regulation regarding the proper verification of credit applications. 

The company, bank, etc., is considered to be the victim of identity theft, not you.  It is easier for them to write off identity theft losses on their taxes and pass the cost on to the public.  This is why identity theft is almost a perfect crime.  Thieves are rarely prosecuted and, even when they are, the penalties are often minor, particularly for first time offenders since prisons are so over-crowded. 


Next topic:  How to Protect Yourself From Identity Theft
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