Credit-Card Application Fraud
In credit-card application fraud, the credit-card issuer has opened a new account for someone pretending to be you, usually at the fraudster’s address so you won’t learn about the fraud until bills are delinquent and the creditor finds you. When you finally learn of a new fraudulent account, the fraud department at the issuer considers a number of possibilities:
♦ You really opened the account and are now trying to avoid responsibility for the charges on it.
♦ You may be telling the truth, but you can’t prove it, which means the company will demand that you pay the bill.
♦ You’re clearly a victim since the evidence is overwhelming in your favor (for example, you were in Iraq when the charges were made in Miami).
The credit-card issuer has many cases of alleged fraud and since the creditor has lost money and may have been negligent in issuing the card, you will have to face the hurdle of providing enough evidence and coming across as articulate and savvy, so the fraud department will believe your story and help you to resolve the issues.
You will need to contest the entire account because none of the transactions will be yours.
Information = Power
Keeping a respectful and polite yet assertive demeanor, no matter how upset you may feel, will be critical in conveying the impression that your claims are legitimate. Similarly, be concise and factual.
Contesting Fraudulent Accounts
To contest fraudulent credit-card accounts, you must first determine which companies have issued accounts to the fraudster. Most accounts (or collection accounts, if the original creditors sold the accounts to collection agencies) will appear on at least one of your credit reports (unless it is a business account, in which case see Chapter 13). Follow the instructions in Chapter 4 to get the name and contact information of each fraud card issuer. As you recall, after you call each of these companies, you will first write the CRAs to remove the fraud accounts from your credit report.
Your next step is to write each company or collection company that issued an account to the identity thief to provide notice that the accounts in your name are fraudulent. Include the following in the package that you send:
♦ A statement that you are the victim of identity theft, briefly stating the facts as you know them.
♦ The account number of the fraudulent account.
♦ A statement that you are disputing the account as fraudulent, as allowed by the Fair Credit Reporting Act.
♦ Attach copies of your FTC identity fraud-affidavit, law-enforcement identity-theft report, a copy of a government-issued ID, and a utility bill showing the address where you live.
♦ A demand that the account be immediately terminated, that the issuer inform all three CRAs that the account was fraudulent, and that any debt be discharged.
♦ A request for copies of the company’s fraud-dispute forms and its identity-theft mitigation plan.
♦ A demand for copies of the account application, billing statements, and all documentation of the fraud account be sent within 30 days without the need for a subpoena to you and the law-enforcement agency you designate at no cost in accordance with FCRA 609e.
♦ A request for the name and contact information of the fraud investigator who will be handling your case.
♦ A statement that your current address and phone numbers, which you have included, are the only ones to use to correspond with you.
♦ A request for a written response regarding the investigation, indicating that you have disputed the account as fraudulent, that the company has discharged the debt, that the company has notified the CRAs that the account was fraudulent, and that they have removed the account and all inquiries from your credit report.
Identity Crisis
You must dispute fraudulent credit and collection accounts with the credit bureau(s) before or at the same time as you dispute the accounts with the credit-card issuers. Failure to do so will make it difficult to legally challenge the credit bureaus if they refuse to delete the fraud from your credit profile.
As always, be sure to send all correspondence by certified mail, return receipt requested. The card issuer can ask you to use its own affidavit form, but should not require you to have it notarized unless it is willing to pay for the notary. You can substitute signatures of witnesses for notarization if you choose. Or you can get your bank’s verification of your signature, which Chapter 3 discusses.
Delay and Deny
The issuer has 30 days in which to investigate your claims and respond to them. If you don’t hear back, call the fraud department, and then send a follow-up letter, requesting a resolution, with a copy of your receipt showing that your letter was received by the company.
If the issuer sends you a letter stating that the account is legitimate and that it denies the fraud claim and verifies the account with the credit bureaus, you will need to call whoever sent you the denial letter, and ask for a higher authority to appeal that decision. Here are some types of evidence that should prove that the account was fraudulent for your appeal:
♦ Signature on the account application and erroneous information on the application, such as an incorrect birth date or mother’s maiden name
♦ Fraudulent addresses used
♦ Types of merchandise ordered and the address where the packages were sent
♦ In-person transactions occurring at a combination of time and place where you can prove you were elsewhere
The Least You Need to Know
♦ There are two different types of credit-card fraud and several federal laws that will help you clear your name.
♦ You have rights that you must exert in writing.
♦ Account-takeover credit-card fraud is easy to fix usually with a phone call and one affidavit.
♦ New account application credit-card fraud challenges you to prove the fraud with extensive evidence.
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