Identity theft is such a rapidly growing crime that some experts say it’s no longer a matter of whether you’ll become a victim, it’s a matter of when.
Currently, experts estimate between nine million and ten million people per year fall victim to identity theft. The annual costs of this crime are staggering:
• Billions of dollars in losses to business and institutions
• Millions of dollars in out-of-pocket expenses for consumers
• 300 million hours spent by consumers trying to resolve the problem, stop the fraud, and clear up their credit reports
Identity theft encompasses a variety of crimes, from stealing someone’s credit card number to opening accounts in the victim’s name. About 15 percent of victims report that their identities were stolen for purposes other than obtaining credit, such as to get government documents, commit tax fraud, or mislead police. Some people give phony names and Social Security numbers when arrested or stopped for a traffic violation.
Thieves tend to do the most damage when they can take over your identity wholesale. By pretending to be you, they can open up credit card accounts, get an auto loan, be treated at a hospital, or rent an apartment. When the bills are due, they don’t pay—and those delinquencies, charge-offs, collections, repossessions, evictions, and judgments wind up on your credit report, sending your credit score into the basement.
This kind of “new account” theft costs, on average, $10,200 per victim and makes up nearly 70 percent of the costs incurred by businesses and financial institutions. The out-of-pocket expenses for consumers tend to be higher as well—$1,200 compared to the average $500 when all types of identity theft are considered.
The FTC’s estimate of the time that consumers spend clearing up problems—30 hours on average—was decried by many identity theft experts as far too low. The Identity Theft Resource Center said that many victims spend 300 to 600 hours dealing with the various problems that identity thieves cause.
Often, the biggest time-consumer is trying to get fraudulent accounts expunged from credit reports. Many victims complain they get the runaround from credit bureaus. The bureaus say the problem is lenders, who continue to report account information to the bureaus even after they’ve been told the accounts might be fraudulent. Either way, the ID theft victim gets squeezed.
Michel, a successful businessman in Sherman Oaks, California, spent months trying to convince the three credit bureaus to remove delinquent accounts from his credit report before finally hiring a lawyer:
“It took me almost a year and thousands of dollars to finally clean up my report. In the meantime, I lost out on the lowest mortgage rates in years as a result,” Michel said. “The whole system is totally unfair as the three majors believe the creditors and make it virtually impossible to remove an item unless you hire an attorney.”
Michel might overstate the case, but he does reflect the frustration experienced by many identity theft victims trying to clear their names, said Linda Foley, codirector of the Identity Theft Resource Center and an ID theft victim herself.
Even if you’re successful in getting your reports cleaned up, your work might not be done. After identity thieves find someone who has good credit, they can strike over and over again. Mary in Charlotte, North Carolina, has been hit four times so far:
“I do everything the experts say,” Mary said. “I have a shredder... I don’t even mail bills from my home.”
Although three of the incidents involved existing accounts, the fourth involved new credit cards:
“The criminal racked up thousands in credit card debt under my name... and had the bills mailed somewhere else,” Mary said.
Mary was clueless about the debt until she tried to apply for a cell phone and was turned down.
Here are just a few of the ways your identity can be stolen:
• You hand your credit card to a waiter in a restaurant. Out of your sight, the waiter runs the card through a small, handheld device called a skimmer. All the relevant information contained on your card’s black magnetic strip—including your name and the account number—is stored in the device and can be used to create new cards.
• You fill out an application for credit, an apartment, insurance, or employment. A crooked employee sells the information to a ring of identity thieves or uses it herself to open accounts. Or perhaps the employees are honest, but the business tosses the application into the trash, where any dumpster diver could find it.
• Hackers break into online databases where your personal financial data is stored. Such breaches are now being made public, thanks to state laws that require residents to be notified when their private details have been compromised. Database firm LexisNexis, retailers Ralph Lauren and DSW, schools from the University of Southern California to Carnegie Mellon, and government agencies across the country have been targeted. In one of the largest incursions, hackers accessed credit card account numbers for some 40 million people by breaking into a database maintained by CardSystems, a credit card transaction-processing company.
• Stolen laptops and lost backup computer tapes are another common way that sensitive information falls into the wrong hands. (The Privacy Rights Clearinghouse keeps a disturbingly long list of these incidents, as well as hacking reports, at www.privacyrights.org/ar/ChronDataBreaches.htm.)
• Dishonest employees or thieves pretending to be legitimate businesses gain access to records that they can use for identity theft.
You might notice a common thread to these examples: There’s precious little you, as an individual, could have done to prevent these crimes.
Sure, you could stop using plastic at restaurants, refuse to fill out any more applications, and cancel all of your credit cards, but there’s still enough information about you floating around out there for a thief to use.
This is a point missed in most identity theft articles, which tend to focus on simplistic solutions such as “Buy a Shredder!” and “Get a Locking Mailbox!” Yes, these measures can help, and later in this chapter you’ll find quite a few more preventive suggestions. But they don’t change the fact that much of your exposure to identity theft is beyond your control.
If you really want to see why identity theft is epidemic, look no further than your own wallet. Chances are if you have one credit card, you have five, and just about every chain store you walk into is trying to get you to apply for another. Lenders are so desperate to extend credit that they offer instant credit, send out billions of preapproved applications, and mail customers so-called convenience checks that thieves can fish out of the mail or trash.
You’ve probably heard the stories about dogs being sent credit card applications; Diane of Santa Barbara recently got one for her two-year-old:
“I could not and still cannot believe that credit card companies are not held more responsible for giving out credit,” Diane said, “without truly checking the background of the individuals to whom they provide credit.”
Even without a prefilled form, identity thieves have discovered that getting approved for new credit is pretty easy. Many lenders don’t require photo IDs, and some accept incorrect addresses and misspelled names. Often, all the thief needs is your Social Security number and an approximate spelling of your name.
Tom Richards of Huntington Beach, California, said a thief convinced Sears by phone to issue two MasterCards in Richards’s name—and then send them to an address not listed on Richards’s credit report.
The application was fishy enough that Sears sent a letter to Richards’ actual address, informing him that the cards had been issued. That allowed Richards to report the fraud. But it made him wonder why Sears would open the account in the first place.
Simply put, the answer is money. The more credit that lenders and retailers can extend, the more money they can make. Speed is key, and most lenders’ computerized processes are designed to make decisions in minutes, if not seconds. If the decisions are wrong, most lenders can easily absorb the costs of the resulting fraud. The costs that consumers pay—in out-of-pocket expenses, time, and legal fees trying to clear up their credit reports—aren’t taken into account.
Incredibly enough, some lenders are in such a hurry that they even ignore fraud alerts, which are the flags that identity theft victims can put on their credit reports to let lenders know their credit has been misused and to indicate that they want to be contacted personally if credit applications are submitted in their names. Some lenders feel the extra step is too expensive, whereas others never see the alert because they buy truncated credit information that doesn’t include the red flag.
The growing problem of identity theft prompted California to pioneer an innovative solution: Allow people to shut off or “freeze” their credit reports so that no one can open new accounts in their names. People who opt for a credit freeze are issued a personal identification number that they can use to “unfreeze” their reports when they want to apply for credit.
The solution was so simple and effective that other states adopted similar laws. After more than half of the states passed legislation, the three credit unions capitulated and offered credit freezes to anyone who wanted one. You’ll find more details later in this chapter.
There also have been some federal law changes that may help identity theft victims get back some control of their lives. Most of these changes were contained in the Fair and Accurate Credit Transactions Act (FACTA). According to a summation by Consumers Union, the law includes the following provisions:
• If a fraud alert is on a consumer’s credit report, lenders are required to phone the consumer or take other “reasonable steps” to verify the applicant’s identity before issuing credit or raising a credit limit. The alert must be included with any credit report or score sold to lenders.
• When a consumer files a fraud alert with one bureau, that bureau is required to contact the others so that alerts can be put on their records as well.
• Credit bureaus are required to stop reporting accounts or account information that a consumer identifies as fraudulent if the consumer provides an identity theft report filed with a police agency. This procedure is known as trade line blocking.
• After a bureau informs a creditor that a block is in effect, the creditor must have “reasonable” procedures to keep it from reporting the bad information again and “repolluting” the consumer’s file.
• When a block is in effect, creditors are prohibited from selling or transferring the debt to a collection agency. If the debt is already in collections, the collector is required to notify the original creditor that the debt might be fraudulent and to provide the consumer a notice of his or her collection rights—if the consumer asks for such a notice.
• Businesses where a thief has opened accounts have new duties to produce records that the ID theft victim might need to clear his name. The businesses, however, can require the ID theft victim to get an actual police report (which is different, and more difficult to get, than an affidavit filed with a police agency).
• Merchants are required to truncate all credit and debit card numbers on receipts, and consumers will be able to request that the credit reports sent to them truncated Social Security numbers.
Identity theft experts worry that Congress gave lenders several big loopholes, such as allowing them to take “reasonable steps” for identity verification rather than requiring phone contact. They note that many law enforcement agencies still refuse to take identity theft seriously and won’t create police reports or accept affidavits. They point out that creditors and credit bureaus are already prohibited from reporting false information by the Fair Credit Reporting Act. If those laws haven’t worked, they wonder, how will the new laws?
Time will tell. In the meantime, you need to be vigilant about monitoring and protecting your credit.
You can do several things to reduce the possibility of having your identity stolen.
You can get a shredder for less than $20 at an office supply store, and no home should be without one. Any piece of paper that includes personal financial information or your Social Security number should be shredded before it’s sent to the trash.
Think of all the bounty that comes into your mailbox—bank statements, credit cards, credit card offers, “convenience checks” you can write against your accounts, health insurance documents with your Social Security numbers printed on them...the list goes on and on. Some identity thieves simply follow the postal carrier around and snatch what they want from unprotected mailboxes.
Think of all that goes out in your mail, including checks and credit card account numbers on the coupons you use to pay your bills. If you still rely on snail mail to pay your bills, use the post office nearest to you to send all your mail, rather than leaving it out where anyone can get it. Better yet, consider signing up for online bill payment, which offers encryption and other security measures to keep your transactions safe from criminals. (Hacking incidents typically target big unencrypted databases sitting in poorly guarded mainframe computers, not the heavily protected transactions that zip back and forth between consumers and their banks or merchants.)
All that a dumpster diver needs to find is a credit card receipt with your full account number printed on it, and he’s struck gold. These so-called flimsies have pretty good street value when sold to identity thieves.
As mentioned before, federal FACTA legislation requires merchants to truncate credit card numbers. But you may still run across merchants who haven’t changed their systems to comply with the law. For a couple of years after a similar law went into effect in my state of California, I still occasionally got receipts with my full credit card number printed on them. It pays to remain vigilant and check each receipt you get.
How easy would it be for a repairman to walk off with your checkbook, or for a guest in your home to rifle through your files? Most people are perfectly trustworthy, but enough aren’t that you should take steps to secure your checks and files.
This nine-digit number was never meant to be an all-purpose identifier, but that’s exactly how many businesses use it. Everyone from your dry cleaner to your vet might ask for it, but few have the right to demand it.
You need to give your Social Security number to employers, financial institutions, and certain government agencies, such as your state’s Department of Motor Vehicles. Your Social Security number is also important for credit transactions. Many insurers use the number as an identifier, or to run credit checks to determine your premiums (see Chapter 10, “Insurance and Your Credit Score”).
Beyond that, however, try to keep your number to yourself. If the business insists that it needs the number, you can either do business with someone else or “misremember” a digit or nine to protect your privacy.
Obviously, you shouldn’t carry your Social Security number with you or have it printed on your checks. You should also lobby your health insurer to print “Participant’s SSN” rather than the actual number on your card. This system is working fine in California, which leads the nation in privacy protections by insisting that health insurers stop printing the numbers on health cards by 2005. Many did so well before the deadline.
Beyond that, try to carry as few credit and debit cards as possible. The more you carry, the more chances that an identity thief has to wreck your credit if your wallet is stolen.
If you have your wallet stolen, don’t wait until you get home to report stolen credit cards. Grab your cell or the nearest phone and call 1-800-VISA 911 to report missing Visa cards and 1-800-MasterCard to report stolen MasterCards. These are among the most valuable cards to thieves and should be shut down right away. When you get home (or back to your hotel, if you’re traveling), you can work on canceling the rest.
It can help to periodically empty your wallet onto a photocopier and get an image of both sides of every card, plus your driver’s license. This will make it easier for you to report the thefts and get replacement cards. (Just remember to put the cards back in your wallet and keep copies in a safe place. You don’t want to leave your financial life lying around at the local Kinko’s.)
If you’re required to give personal financial information to any business or professional, ask how they dispose of old documents. If the business doesn’t have a secure disposal policy in place, take your business elsewhere or press it to institute one. Federal law requires businesses to discard records with consumer information in a way that prevents unauthorized access.
The law gives businesses some leeway about what methods to use, but you can always make specific requests. It’s not too much to ask, for example, that your accountant shred copies of your old tax returns, or at least call you so that you can come pick them up and do the same. Ditto for your doctor or any other professional.
If your ATM card has a Visa or MasterCard logo, it’s known as a debit or check card and can be used just like a credit card, without punching in a personal identification number. A thief who swipes it or skims the information off the magnetic stripe can quickly empty your bank account.
The good news is that banks won’t hold you responsible for fraud committed with a debit card with a Visa or MasterCard logo, but you can still wind up without money for a few days before the bank restores the stolen cash. That’s why it’s better to use a credit card or cash anywhere you won’t be able to monitor the actual transaction (such as when you hand payment to a waiter in a restaurant).
Mary, the four-time identity theft victim, also refuses to use her debit card at fast food restaurants, gas stations, or mom-and-pop type stores:
“These small business do not do background checks on employees, they typically have high turnover rates, and [they] are prime targets for transient-type workers,” Mary said. “Any criminal [who] engages in identity theft for a living knows they can wait tables for a month and get tons of card numbers to use or sell.”
This should be obvious, but don’t give your credit or debit cards to anyone else to use. A small but significant portion of fraud and identity theft is committed by family members, friends, and lovers—either current or ex. Some of the most heartbreaking cases are when a parent snatches the identity of a child (see “When Parents Steal,” later in this chapter).
The credit bureaus have a toll-free number (888-5OPT-OUT) that allows you to take your name off marketing lists that are sold to credit card companies. Signing up won’t eliminate credit card solicitations, but it will cut down the volume significantly. The fewer such offers in the mail, the fewer chances that thieves will have to steal them.
You can contact the Direct Marketing Association to be removed from their mail and phone lists, as well. Write to Mail Preference Service, P.O. Box 643, Carmel, NY 10512 and Telephone Preference Service, P.O. Box 1559, Carmel, NY 10512. Even better, to all but eliminate telephone solicitations, register for the federal do-not-call list at www.donotcall.gov or 1-888-382-1222. If a solicitor calls you after you’ve been on the registry at least three months—and the caller isn’t a charity, survey taker, political fundraiser, or a company that you already do business with—odds are good it’s a scam artist, because a legitimate company would abide by the do-not-call list.
Not to make you paranoid, but readily available radio scanners can allow others to easily listen in on analog signals emitted by many cheap cordless phones and by some cell phones that have the ability to switch from digital to analog signals. (The digital technology used by more expensive cordless phones and most cell phones is more secure.) The Privacy Rights Clearinghouse recommends buying cordless phones that use digital spread-spectrum technology, scramble the signal, and operate on higher frequencies, such as 900 megahertz, 2.4 gigahertz, or 5.8 gigahertz.
Cell phone users who are security conscious should consider phones with CDMA (Code Division Multiple Access) technology or the latest 3G generation of GSM (Global System for Mobile communications).
But your best bet is to refrain from discussing any sensitive matters on your cell, especially if you can be overheard. You’re probably more at risk because of your own booming voice than you are any scanner-equipped eavesdropper.
Don’t give out your credit card number, Social Security number, or other sensitive financial information by email, and don’t do it by phone unless you initiated the contact. Even then, make sure that you trust the business before divulging any information.
Criminals have become increasingly proficient at phishing, a fraud that typically uses an email purporting to be from your bank or credit card issuer and that directs you to a look-alike Web site where you’re supposed to input your account numbers. If a financial institution contacts you, call them using the toll-free number on your statement rather than a number provided on an email or Web site.
Each year, a few months before your birthday, you should receive a statement from the Social Security Administration summarizing your earnings during your working years, plus an estimate of the benefits you and your family can expect. The statements are sent automatically to workers and former workers 25 and older. If you meet those criteria and aren’t getting statements, you should call the SSA immediately at 1-800-772-1213 to request the latest copy and make sure your contact information is correct.
It is a good idea to review your statement to make sure you’re being properly credited for all the taxes you’ve paid into the system, but it can also help you spot fraud. Missing earnings or earnings that aren’t yours can be a tip-off.
Don’t worry too much, though, if your previous year’s earnings seem too low. It sometimes takes a while for the SSA to update its information. If that year’s earnings are still too low when you get your next statement, contact the SSA.
A few years ago, it was enough to check your credit report annually. Now, many identity theft experts recommend that you review your reports at least twice a year, if not more often. The first hint you might have that you’re a victim is often a suspicious entry on your credit report.
Should you spring for one of those credit-monitoring services that promise to do the work for you? Maybe not. Read on.
The public’s rising concern about identity theft has prompted the credit bureaus and other companies to see a lucrative marketing opportunity. The result is credit monitoring, or services that promise to watch over your credit report and alert you if anything suspicious occurs.
Almost nonexistent ten years ago, credit-monitoring and similar “privacy-protection” services are now a $2.5-billion industry, according to the Center for Social & Legal Research, a nonpartisan research organization.
What credit monitoring can’t do is prevent identity theft, despite marketers’ claims that it provides “protection” against such crimes. Credit-monitoring services can’t snatch credit applications out of thieves’ hands or prevent lenders from opening accounts for the wrong people. What the better services can do is give you some early warning that there’s a problem, which can give you a head start in cleaning up the mess.
The quality, however, varies widely, and most credit-monitoring services have serious drawbacks:
• They’re not all comprehensive—The better services promise to check your report at all three credit bureaus, but some provide ongoing monitoring of your report at only one bureau, with only periodic checks of the other two. These periodic checks usually happen once every three months, but they might be annual. Some services stick solely to one bureau and never check in at the other two.
• They might not provide much of a head start—The best services promise to alert you within 24 hours if someone applies for credit in your name. Others settle for weekly, monthly, or even quarterly updates. Again, because most don’t provide daily monitoring of all three bureaus, ID theft might not be detected for months.
• They’re costly—Although some services cost as little as $5 a month, most will set you back $10 to $15—or more. Over time, those fees can add up and may not be a good value, particularly if you’re not at high risk of becoming a victim.
Many ID theft experts suggest that most people are better off requesting their reports periodically from the bureaus, rather than paying for credit monitoring. Credit expert Jay Foley of the Identity Theft Resource Center suggests rotating your requests, so that you first get a report from Experian, then three months later one from TransUnion, and then three months after that one from Equifax. If you keep up the rotation, you’ll see each bureau’s report at least twice every 12 months for much less than you’d pay a credit-monitoring service.
If you do decide you want a monitoring service’s help, though, make sure you find out the following:
• How often your report is checked at each bureau, and how often those reports are updated.
• How quickly you’ll be sent an email if something suspicious occurs. Find out the longest that a problem could appear on your report at any of the bureaus before the service would bring it to your attention.
• How much the service costs and how often you will be charged.
• What other services are provided (identity theft insurance, concierge help in reporting identity theft) and how you can access those services.
For many consumers, a credit freeze is overkill. The freezes typically involve setup fees of $10 to $15 per credit bureau, plus similar fees if you want to temporarily lift the freeze to get credit. You might find it inconvenient to be cut off from those “instant credit” deals that offer discounts when you sign up for an account. But others, including the following, will find a credit freeze to be a great solution:
• Victims of “new account” fraud. Some kinds of identity theft are relatively easy to deal with, such as when your credit card number is fraudulently used. In that case, you’re issued a new card, and the chances of your being victimized again are hardly greater than that of the rest of the population. If someone’s tried to open accounts in your name, though, they probably know enough about you to try again.
• People who have been informed that their personal identifying information—their name, address, Social Security number, date of birth—has been compromised by a database breach or other incident.
• Those whose wallets are missing. A stolen purse or wallet can be a gold mine for an identity thief, especially if your Social Security number was inside.
• Relatives, friends, or acquaintances of a thief or potential thief. If a family member has stolen one relative’s identity, he might steal another’s. Likewise, be cautious of addicts, gamblers, and others feeding compulsions, because they might view your credit as an easy route to more money to feed their addictions. In fact, anyone who has a compromised moral sense and access to your personal information could be a potential thief, so keep your data as protected as possible even in your own home.
• Anyone who can’t sleep at night without a freeze. If your state allows you to freeze your credit and you’d feel better with your reports locked up, then by all means, do so.
Each of the three credit bureaus has information on its site about how to institute a freeze. You’ll find similar, state-specific information at the Consumers Union site, FinancialPrivacyNow.org.
The only good news about the rise in identity theft is that there are now more resources than ever before to help victims. You still need to gird yourself for battle with credit bureaus, creditors, and even collection agencies, but you’re not out there alone.
The Federal Trade Commission has extensive information for ID theft victims at www.consumer.gov/idtheft, or you can call 1-877-FTC-HELP (1-877-382-4357) to get free information. You also can find helpful resources at the Identity Theft Resource Center (www.idtheftcenter.org or 1-858-693-7935) and the Privacy Rights Clearinghouse (www.privacyrights.org or 1-619-298-3396), among other locations.
Some financial institutions are remarkably responsive to identity theft victims, whereas others presume that anyone reporting ID theft is a liar until proven otherwise. Either way, you’ll want to be assertive, persistent, and relentless in your efforts to clear your name. The Privacy Rights Clearinghouse, the California Public Interest Research Group, and the Identity Theft Resource Center suggest that you take the steps outlined in the next sections.
Include dates, times, and first and last names, if possible, of everyone you contact. (It can be helpful to use one notebook in which you jot everything down so that your notes aren’t scattered all over the house.) Follow up these conversations in writing, with letters sent certified mail, return receipt requested. Keep track of the hours and costs you’re incurring; you might be eligible for restitution if the thief is caught and prosecuted.
At the very least, you’ll want to add a fraud alert to your credit file and to make sure the alert is for seven years, rather than any shorter period. Fraud alerts can make “instant” credit more difficult to obtain, but you can always cancel an alert later if you want.
The bureaus have a system that is supposed to allow you to alert all three companies with a single call. There have been some questions, though, about whether the bureaus are properly sharing this information. So after you call Equifax at 800-525-6285, Experian at 888-397-3742, or TransUnion at 800-680-7289, make sure to pull your reports at all three (the bureaus are required to provide them for free when you add an alert) to make sure the fraud notation has been added.
The credit bureaus should be able to supply you with contact information for any creditors that are listed on your credit report.
If the theft involved opening new accounts, you should also consider a credit freeze if your state allows.
If someone is using one of your existing credit or bank accounts to run up charges, the bank or lender typically closes the account and issues you a new one, along with some kind of form or affidavit to report the fraud. If new accounts have been opened, the financial institution also asks you to fill out a fraud affidavit. Many accept the uniform fraud affidavit available on the FTC Web site.
Some jurisdictions are terrific about taking identity theft reports, and some aren’t—even though it’s a federal crime (18 USC 1028) to assume someone else’s identity. Be persistent, bring as much documentation of the fraud as you can, and try to get the law enforcement agency to list the affected accounts on the report. A police report can help enormously in getting problems resolved with creditors.
If the thief set up phony bank accounts in your name or stole checks, you need to close those accounts and stop payment on any outstanding checks. Open new checking and savings accounts and contact the major check-verification companies to report the theft. Here are some of those companies:
• ChexSystems—800-428-9623 or www.chexhelp.com
• Certegy—800-770-3792 or www.certegy.com
• TeleCheck—1-800-TELECHECK or www.telecheck.com
FACTA legislation made it illegal for fraudulent accounts to be turned over to collections, but that doesn’t mean it won’t happen—or doesn’t help you much if it’s happened already.
Dealing with collection agencies can be especially difficult, because they’re used to dealing with bad debts every day, and have heard every excuse in the book—including many false claims of identity theft. In addition, more than a few collectors are unresponsive, unethical, and abusive in their dealings with consumers. Tread carefully here, but don’t give up. The Identity Theft Resource Center has a separate fact sheet (FS 116) on how to cope. The following are some of the suggestions:
• In addition to keeping good notes and following up in writing (certified mail, return receipt requested), ask for a written statement from the collector outlining any agreements or decisions you discuss. Ask for confirmation in writing that you don’t owe the debt and that the account has been closed.
• Stay cool and calm. The more professional you act, the more likely the collection agency will treat you seriously.
• Ask for a supervisor or the company’s fraud investigator. Customer service representatives are usually little help.
• Tell the collector that you are a victim of identity theft and you are not responsible for the account. Don’t say that you “dispute” the account, because collection agencies associate that word with people who are arguing about the amounts they owe or trying to evade a legitimate debt.
Collection protocols for dealing with identity theft are constantly evolving, so contact the center for more details on your rights and the best approaches.
If your efforts to solve the problem yourself aren’t working, you might need to hire a lawyer. You can get referrals from your local bar, legal aid office, or the National Association of Consumer Advocates at 202-452-1989.
Be determined to be the last one standing when this is over. Don’t pay bills that aren’t yours to get a creditor off your back and don’t file for bankruptcy. If a creditor or collector threatens you with a lawsuit, jail time, or other punishment, point out calmly that such threats are violations of federal debt-collecting and credit-reporting laws. Then report them to the Federal Trade Commission and your state attorney general’s office.
Kay in Valley View, Texas, lost her adult daughter seven years ago to a blood clot. Wanting to do the right thing, Kay paid off a loan she’d cosigned with her daughter.
Ever since then, however, the three credit bureaus all list Kay as “deceased.” Kay’s credit file has been mixed with that of her daughter’s, and as a result, Kay can’t get credit:
“I have no FICO score,” Kay wrote. “I have tried and tried to get it changed. Several times I sent [the bureaus] copies of phone bills, electric bills, Social Security papers, driver’s license, on and on, everything I’ve been asked to send. [It’s] still not resolved.”
It shouldn’t be that hard to prove you’re alive, or correct any other mistake in your credit file, for that matter. But sometimes, it is. If you’ve followed the suggestions in this book and are still slamming into a brick wall, you might need to take extraordinary measures.
Here’s what can help:
• Get stubborn—Many people are appalled at the amount of time and energy it can take to get the simplest problem solved. Those who are tenacious to the point of obsession are in the best position to wear the opposition down. The bureaus, creditors, and collection agencies are counting on you to go away after a few rebuffs; credit-repair veterans say they often win their cases by repeatedly refusing to take “no” for an answer.
• Consult with those who have gone before—The best tactics for winning the battle change constantly as all sides adjust their strategies. Checking out credit repair sites such as CreditBoards.com, which can give you some ideas and strategies from people who have some experience fighting the same battles. Just remember to take everything you read with a grain of salt—anyone can post on these boards.
• Get a lawyer’s help—It’s not easy to find a good attorney who’s up on the nuances of the Fair Credit Reporting Act and the Fair Debt Collection Practices Act. But they’re out there. Once again, you can get referrals from your local bar, legal aid office, or the National Association of Consumer Advocates at 202-452-1989. Another site to check out is MyFairCredit.com, which offers referrals to lawyers who handle credit disputes.
Even if your lawyer isn’t crackerjack, the other side might take you more seriously if correspondence about your case suddenly starts coming on the letterhead of Willgetya, Butgood, & Howe.
• Get Congress involved—Many people are surprised to learn that their U.S. representative is willing to weigh in on consumer issues, and most maintain a staff to help their constituents.
Don’t expect your elected representative to get excited about aiding your campaign to delete a $99 collection from your credit report. But if your story has any outrage factor at all—why can’t the bureaus figure out you’re alive, or not your father, or the victim of identity theft?—you might be able to enlist his help.
• Call a local newspaper, television, or radio reporter—Most media outlets have someone who covers finance or consumer issues. An ongoing battle with a credit bureau can be a juicy story, if told correctly. Be as succinct as you can when contacting the reporter (by email is usually best). If you don’t get a response, follow up politely in a few weeks to ask whether they can refer you to anyone else.
You’ll probably have the best luck at a smaller newspaper, station, or Web site. Reporters and columnists at large outlets get so many of these sad stories that they can follow up on only a fraction of the leads. Like the big regulators, they usually wait for a pattern of specific abuses to develop before they act, so your letter might or might not ever get answered. That doesn’t mean you shouldn’t try; but if you get no response, aim for a smaller media outlet closer to home.