Consumer Identity Theft

This article covers the basic actions consumers should take if they become victims of identity theft. These include immediately notifying the companies that issued you credit, placing a freeze or fraud alert on your credit report, and alerting the Federal Trade Commission to the theft of your identity and the illegal use of your personal information.

Identity Theft – A Growing Problem

According to Experian, identity theft reports rose in both incidents and losses nationwide in 2021. Experian reports that according to the Federal Trade Commission (FTC) they received 5.8 million fraud reports in 2021, an increase of nearly 20% from the prior year, and reports of associated financial losses were over $6 billion, an increase of more than 77% compared with 2020.

Identity Theft Is A Major Crime

There are both federal and state identity theft laws. However, the federal nature of these crimes has made federal enforcement in prosecuting them a federal priority.

Federal Law

The federal law covering identity theft is under 18 USC § 1028, which makes it a crime to misappropriate another’s personal information, including identifying information, for criminal purposes. In most cases, the crime of identity theft can carry a maximum term of 15 years in prison, a fine, restitution, and forfeiture of any personal property used or intended to be used to commit the offense.

Personal identifying information can include but is not limited to, social security numbers, driver’s license numbers, credit card numbers, and bank account information.

Use of Personal Identity Information

Identity thieves can use your personal identity information to:

• open new accounts and apply for credit cards
• apply for loans with banks and lenders
• receive medical services
• order products and services online

If Your A Victim of Identity Theft, Your Options Include:

• Placing an immediate hold on all accounts, you suspect have been illegally opened.
• Calling each credit card company’s fraud department to notify them. Follow up in writing and include all copies of relevant and supporting documents. Make sure to keep the originals in a safe place.
• Make sure to notify all of your credit card companies and banks verbally and in writing.
• In writing or emailing banks or credit card companies, do not use their general inquiry email or postal address as a safety precaution. You want to direct all your communication to their fraud department.
• Contact The FTC  by emailing your information to IdentityTheft.gov or by calling them at 1-877-438-4338.

Remember, time is of the essence. It’s best to notify the bank and credit card companies first by calling their fraud division or lost credit card hotline. These departments are usually staffed twenty-four hours a day, seven days a week.

You can also contact them electronically if they have a dedicated email for urgent matters like fraud or stolen credit cards. But calling them directly is usually the fastest way to alert them of the problem.

If you are asked to send them a letter and include all relevant and supporting documents, make sure you use a next-day delivery service.

Opening New Accounts – Some Precautionary Measures

When you open new accounts, use your Personal Identification Numbers (PIN) and Passwords.

Avoid using readily available information like your mother’s maiden name, birth date, the last four digits of your Social Security number or phone number, or a series of consecutive numbers.

If you suspect fraud, dispute those transactions as quickly as possible

Fraud Dispute Forms

Request the bank or credit card company to email you their company’s fraud dispute form so you can inform them of all unauthorized charges and debits on all existing accounts.

If the company you’re dealing with does not have a dispute form, draft your own. Make sure you include all relevant and material information as possible.

In addition to immediately notifying your bank or credit card company, you can also file an identity theft report with your local police consumer fraud division and provide a copy of the police report to the bank and credit card company.

Filing a report with the police and providing the credit company with an Identity Theft Report will give you additional protection and credibility.

After The Credit Company Investigation

Make sure to obtain written confirmation that the dispute has been resolved. After resolving the identity theft dispute, be sure to request they confirm this in writing.

The written confirmation will protect against later claims should they reappear on your credit report relating to the same disputes.

Credit Monitoring Services

There are many good reasons for signing up with a credit protection and monitoring service:

• Near immediate detection of signs of unusual credit activity.
• Monitoring unusual fluctuations in your credit profile and credit scores
• Service will monitor all three major credit bureaus.
• Ability to Lock and unlock new lines of credit.
• Receiving new purchase alerts that you might not have authorized.
• Keep track of your various account credit terms.
• It takes the worry and stresses out of protecting your credit.
• A credit freeze will have no adverse effect on your credit score.

Freezing Your Credit

If you’ve been scammed and your identity and credit information have been stolen, chances are new credit cards are being opened in your name by an identity thief. You will need to act quickly.

Many states have laws that let consumers protect their credit by allowing the credit bureau to “freeze” the consumer’s credit – in other words, restricting all third-party access to the consumer’s credit report.

This will prevent identity thieves from accessing and opening new credit accounts if you place a credit freeze, even legitimate, unless you temporarily lift the freeze.

Two Credit Freeze Limitations

• The credit freeze will prevent thieves from opening new accounts but cannot protect you if they have already opened and are using your credit cards.
• An identity thief can still open accounts with vendors that do not perform credit checks, such as cable subscriptions, certain wireless telephone services, and basic checking accounts.

Credit Laws Vary By State

Credit regulations and restrictions concerning credit freezes vary and will depend on your state’s laws.

Many companies do not charge for credit freezes for identity theft victims, while other states allow companies to charge consumers a nominal fee.

Accessing Your Credit Report Once Frozen

If you place a credit freeze with a credit reporting agency, you will continue to have access to your credit report and companies that have already extended credit to you. Such as your mortgage lender, existing credit cards, and car loan companies.

Only those lenders you have already authorized to receive your credit information will be able to access your credit profile.

You can, however, temporarily lift your credit freeze to allow a potential lender to access your credit report for the purpose of extending credit to you. You need to use the PIN each credit reporting agency will send once you have placed the credit freeze.

You will likely have to pay a fee to lift the credit freeze in most states.

Some states provide credit agencies only up to three days to lift the credit freeze. This can interfere with your chances of receiving instant credit should you need to access your credit after those three days.

Post-Divorce Credit Freeze

People who have recently been through a divorce and want to change their last name to protect their identity from unlawful use of their credit by their former spouse or others can protect themselves by activating a credit freeze under their former marital identity.

Distinguishing Between A Credit Freeze From A Fraud Alert

• A fraud alert sent electronically notifies a person when their identification information has been used or is suspected of being used illegally.
• Businesses may still check your credit report with a fraud alert in place. The company must first personally contact you to verify your legal identity before they can issue credit in your name.
• The potential steps creditors must take to verify your identity may only sometimes alert them that the applicant is different from you.
• A credit freeze will thwart potential creditors and others from acquiring your credit report. Remember, you can lift the freeze when ready to begin a new relationship with another company.

You can also reach out to report the identity theft directly to the federal government by emailing your information to IdentityTheft.gov or by calling them now at 1-877-438-4338.

Preventive Recommendations

Review Your Credit Reports Regularly

Fraud alerts can help prevent an identity thief from opening any more accounts in your name. Contact the toll-free fraud number of any of three consumer reporting companies below to place a fraud alert on your credit report. The company you call is required to get the other two, which will place a sign on their versions of your report, too.

If you do not receive a confirmation from a company, you should contact that company directly to place a fraud alert.

TransUnion: 1-800-680-7289  

Equifax: 1-800-525-6285 

Experian: 1-888-397-3742 

Once you place the fraud alert in your file, you’re entitled to order one free copy of your credit report from each of the three consumer reporting companies.  Once you get your credit reports, please review them carefully. Look for inquiries from companies you haven’t contacted, accounts you didn’t open, and debts on your accounts that you can’t explain.

Check that information, like your Social Security number, address(es), name or initials, and employers, are correct. If you find fraudulent or inaccurate information, get it removed. 

To ensure no new fraudulent activity has occurred, continue to check your credit reports periodically.

Identity Theft Help – Consumer Lawyer

If you have questions or require additional information about your specific legal rights as it relates to idendity theft, we recommend you consult with an online Consumer Rights Lawyer about your specific rights and issues.