Unfortunately, identity theft has become a common occurrence in our society of Internet access and free exchange of information. Quite often, consumers do not even realize that their identity has been stolen until they apply for a loan. It’s quite a shock to learn that they owe much more than they imagined or that their credit rating has been damaged.
Whether to protect against credit being ruined by fraud or affected by simple error, consumers now have a way of seeing what prospective creditors (and employers, insurance underwriters and landlords!) can see. In accordance with the Fair and Accurate Credit Transactions Act, the three nationwide consumer reporting agencies (CRAs) - Equifax, Experian, and TransUnion – must now provide consumers with a free copy of their credit reports, upon request, once every twelve months. This service, which is already offered in other areas of the Country, becomes available in September 2005 to consumers in the East.
Although New Jersey and five other States already had laws requiring CRAs to provide a free annual report upon separate requests to each agency, the Federal law, among other provisions, allows for requests to be made at a single, central source with the results available on-line. Requests can be made at www.annualcreditreport.com or by calling 1-877-322-8228. Each consumer is entitled to receive one free credit file disclosure every 12 months from each CRA through this central source. Credit reports can be ordered from all three CRAs at the same time or from each one individually at varying times (e.g., one credit file from each CRA every 4 months).
Okay, so you’ve identified that your credit identity has been stolen – now what? Unfortunately, correcting information can be a long, tedious, and often complicated process. Consumers who are the victim of identity theft, should immediately report the crime to an appropriate law enforcement agency and obtain a copy of the official report. Although the authorities may not be able to offer any immediate assistance in finding the thief, the report is often needed to help convince creditors of the theft. Similarly, to demonstrate the sincerity of the claim as well as to provide information for law enforcement agencies to track down identity thieves, consumers should file a complaint with the Federal Trade Commission’s identity theft hotline at 877-438-4338 or www.consumer.gov/idtheft.
The Federal Fair Credit Reporting Act establishes procedures for correcting fraudulent or incorrect information on a credit report. To protect their rights, consumers should contact - in writing -both the CRA reporting and the information provider (the bank, credit card company or other business that sent the information to the reporting agency). The information provider should be asked to freeze the account and replace it with a new one.
A CRA will block fraudulent information from appearing on a consumer’s credit report if the consumer sends the company an identity theft affidavit and the CRA accepts its truthfulness after investigation. The CRA will then notify the information provider of this block. Once sent this notice, the information provider must stop reporting the information to CRAs and may not hire anyone to collect the debt or sell that debt to anyone else who might try to collect it.
The CRAs could also be asked to put a fraud alert on the consumer’s file, which will aid in preventing new credit accounts from being opened without the consumer’s express permission. Note that this may also delay the consumer’s ability to obtain credit. An initial 90-day alert may be put into place by contacting any one of the CRAs (who must share the request with the other two). The initial alert entitles the consumer to an additional free report from each of the CRAs. An extended 7-year alert may also be placed in the reports, which, among other things removes the consumer’s name from certain credit offers. To obtain an extended alert, an identity theft report, including a copy of the law enforcement agency report, must be filed. An extended alert entitles the consumer to two additional free credit reports from each of the CRAs in the twelve-month period following the filing of the alert. These additional opportunities for free reports allow the consumer to remain vigilant in detecting any new signs of fraud.
Depending on how their identities were stolen, consumers should also contact one or more of the following government agencies: U.S. Postal Inspector, Social Security Administration, Department of Motor Vehicles, and U.S. Passport Services Department. If a petition in bankruptcy using the consumer’s name is filed, a letter should be sent to the applicable U.S. Trustee.
The federal government has given us a new tool to protect ourselves against identity theft. Make use of it.
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