Identity theft is one of the most egregious consumer credit crimes that the CFPB deals with. ID theft has been around for a long time; but, the incidents of it and the sophistication of fraudsters have had an explosive effect on consumers and businesses alike. Regrettably, the cost of identity theft is borne by each one of us in terms of the higher prices that we end up paying for goods and services to counter the losses incurred by businesses.
There are some simple preventative actions that we can each take as consumers including
- protecting our passwords and other confidential information.
- checking our bank and brokerage statements carefully—monthly or more often on line.
- checking our credit reports at least annually for unusual activity.
- maintaining a healthy skepticism about offers that sound too good to be true.
Further, if you think that you may be the victim of identity theft, it is important to
- follow up with the bank or creditor directly. Ask to speak with someone in the security or fraud department. If you are concerned with your accounts, your bank will offer you a telebanking account password authorization to help deter a fraudster from being able to access your account even if he/she knows your birthdate, social security number, account number and other details about your life. Follow up in writing and include copies of any supporting documents.
- contact the national credit reporting agencies to add a fraud alert to your credit file. If you contact one national credit reporting agency, it will notify the others. For example, if you call Equifax at 1-800-525-6285, it will contact TransUnion and Experian. This will provide a 90 day time frame (that can be renewed) to determine what may be happening to your credit. It also affords you a free copy of the information in your credit file that you may then study for any unusual occurrences. Keep records of all conversations and all correspondence.
- then contact the Federal Trade Commission at 1-877-438-4338 or www.ftc.gov/idtheft. The FTC will confirm your ID theft report and set up an “account” for you to track your steps in proving that someone has stolen your identity.
- finally, a consumer has the right to prevent a business from reporting information to consumer reporting agencies that the consumer believes is a result of identity theft. This is known as a direct dispute. Creditors often feel that consumers' direct dispute letters are simply intended to delay the collection of just indebtedness; and, creditors then respond with a “frivolous or irrelevant dispute” letter. However, when a consumer's notice is a legitimate claim of identity theft and is accompanied by sufficient information to identify the account in dispute, the specific information being disputed and an explanation of the basis for the dispute, the business is lawfully bound by the obligation to investigate such a direct dispute.
The law is there to protect each of us as consumers. But, as consumers, we must be aware of the actions that need to be taken by us individually in order to protect our assets and a good credit record.