Articles Posted in Identity Theft

Parents should periodically check their children’s credit reports. The reason is that fraudsters sometimes steal the kids’ identity. They know that children likely won’t notice their identity has been stolen and parents don’t typically check their credit reports. A good time to check is when a child is 16. At that point, there is time to take action to correct the reports.

Children should not have credit reports and so if there is a credit report it may be because someone has stolen the child’s identity. A research firm found that one in 40 households with children under the age of 18 had at least one child whose personal information was affected by identity theft.

According to Credit.com the reasons to be concerned about such identity theft include the possibility a debt collector may harass a child to pay a debt, a child might not be able to open a checking account due to negative credit history that does not belong to the child, or when the child applies for a driver’s license, the child may find someone else has obtained a license in the child’s name.

CreditCards.com has an informative a report on a proposed rule that could help kids replace stolen Social Security numbers. An incredible number of kids’ social security numbers have been stolen so the thieves can get employment, credit cards, or to collect tax refunds.

Thieves like to steal kids’ socials because usually no one checks their credit reports. A Carnegie Mellon University report estimated that 10% of children have had their socials used by someone else. This is a rate 51 times higher than adults!

Persons seeking to change their social security numbers have met great resistance from the Social Security Administration. Currently, anyone seeking new Social Security numbers must show they were “recently disadvantaged” by an unauthorized person using their identity.

But under the proposal, the agency would issue a new number when the old one was stolen from the mail, publicly disclosed in error by the Social Security Administration or misused by a third party with no need to prove actual harm. The new rule would prevent future harm when the number was stolen, which only makes sense.

CreditCards.com’s report advises parents to ask credit agencies for a “manual search” of their child’s Social Security number. This will flag any suspicious activity from people using your child’s SSN but with different names or dates of birth. Parents may also consider a credit freeze.

The FTC has a report out on a survey of 3,000 identity theft victims and their experiences dealing with the credit reporting agencies. The survey indicated that many consumers start out not knowing how the dispute process works under the Fair Credit Reporting Act. This is not surprising given the complexity of the matter and the counter intuitive requirement that the consumer contact the credit bureaus directly rather than going through the creditor that is reporting the inaccurate information.

Among the identity theft victims who contacted the credit bureaus, 40% did not know they had the right to dispute to ask the credit bureaus to investigate and correct inaccurate information on their credit reports. Of those who did dispute the information on their credit report, 52% said the information was correctly removed, 29% said the information was not removed and 18% were not sure.

Of those who said the inaccurate was removed, 39% were either somewhat or very dissatisfied with the process. The main reason for the dissatisfaction was that the inaccurate information was not removed. Only 42% were able to get information removed with a single contact to a credit reporting agency while 24% needed three to five contacts. 4% had to contact a credit bureau six or more times to get the information removed!

The FCRA requires credit bureaus to block accounts that are the result of identity theft. The trigger for the blocking action is a police report by the victim and a dispute letter explaining the writer is a victim of identity theft. Very few consumers are aware of the right to have the credit bureaus block the fraudulent accounts. Only 21% of the persons who contacted the credit bureaus attempted to have the accounts blocked. Even those who asked had their accounts blocked only 46% of the time for reasons unknown.

One common reason for dissatisfaction was the difficulty of reaching a live person when calling a credit bureau. Another was the sheer difficulty of getting the bureaus to remove fraudulent accounts from their reports. Some reported the bureaus tried to sell them fraud alert packages and the like they did not want.

Identity theft often results in accounts showing up on the victim’s credit reports. When that happens, a first step is to go to the local police to report the theft and get a report. A next step is to send a copy of the report to each of the credit bureaus with a letter asking that the fraudster’s accounts be deleted.

Police reports are important in this process because under the FCRA, 15 U.S.C. § 1681c-2, a credit bureau must block the reporting of any incorrect information in a consumer’s file upon receiving: “(1) appropriate proof of the identity of the consumer; (2) a copy of an identity theft report; (3) the identification of the information by the consumer; and (4) a statement by the consumer that the information is not information relating to any transaction by the consumer.”

A consumer in a lawsuit against a credit agency known as Early Warning System lost the case because he failed to file an “identity theft report” to the bureau. The judge explained that the FCRA defines that term precisely. To qualify, the report must be a document meeting the following conditions: “(A) that alleges an identity theft; (B) that is a copy of an official, valid report filed by a consumer with an appropriate . . . law enforcement agency . . .; and (C) the filing of which subjects the person filing the report to criminal penalties relating to the filing of false information if, in fact, the information in the report is false.” 15 U.S.C. § 1681a.

The consumer never filed a report with the police. Instead, he relied on a report that a Maryland county police department wrote. The consumer said he sent a copy to EWS, but the court said that did not suffice. “The obstacle Thomas faces is that this report cannot qualify as an “identity theft report” under § 1681a because it was not “filed by a consumer.”

The court explained that an identity theft report must be “an official, valid report filed by a consumer with an appropriate . . . law enforcement agency.” A “consumer” is defined as “an individual.” 15 U.S.C. § 1681a. The police department is not “an individual” and therefore cannot be a “consumer” as defined by the statute. Because the police report was not “filed by a consumer,” it is not an “identity theft report” under 15 U.S.C. § 1681a. Without receipt of an “identity theft report,” EWS did not have a duty to block the reporting of the incorrect information.Thomas v. Early Warning Services, LLC. (District Court, MD 2012).

Identity thieves steal identities by retrieving credit card offers from trash cans and the filling sending them in using their own addresses. Law professor Jeff Sovern reports that
he told his class the Fair Credit Reporting Act requires the credit card issuers to allow consumers to opt out of the applications (15 U.S.C. § 1681b(e)), thus reducing the likelihood that an identity thief will steal their identity.

But most people don’t opt out and instead tear up the applications and his students brought up a MSNBC story about how a consumer tore an application up, then taped it back together, and sent it in using a different address. Chase sent him the credit card anyway.

Prof Sovern recommends that consumers should opt-out of credit card solicitations. For the FTC’s advice on how to do so, go here.

The FTC reports that identity theft was the number one consumer complaint it and other federal agencies it and they receive from consumers in 2010. The agency annually publishes what it calls the Sentinel Network of consumer complaints. Last year, 6,460 California residents reported they were the victims of identity theft, which was 17% of all consumer complaints. Younger consumers were victims more often than older persons. California was # 3 in the U.S. in terms of complaints of identity theft among the states adjusted for population.

Equifax has a judgment against it for more than a million dollars to a Bay Area man whose identity was stolen. While the consumer was hospitalized, an impostor used his identity to open fraudulent accounts. He found the fraudulent accounts on his credit reports from Experian, Equifax and TransUnion and disputed them. (See my blog on why to dispute in writing, Certified Mail, Return Receipt..

Equifax went to trial. The identity theft victim told the jury about trying to get Equifax to correct his report. Other witnesses testified about his damages. His expert explained why Equifax’s procedures fail to meet the requirements of the Fair Credit Reporting Act.

The jury agreed with the identity theft victim. It awarded him over $6,000 for economic damages, $315,000 for non-economic compensatory damages and $700,000 for punitive damages. The consumer does not have to worry about paying his attorney either. The Fair Credit Reporting Act makes Equifax liable for all his attorney’s fees and court costs.

Equifax made post-trial motions to get out from under this verdict, but the trial court denied them all.

As I said before, mixed file and identity theft cases can be great cases. The verdict here proves that. If you have such a claim, give me a call.

Frequently people ask me how they can get the credit bureaus to correct inaccurate information on their credit reports. I always tell them to dispute inaccurate credit reports via letter sent Certified Mail, Return Receipt. Why do that, you ask, when I can dispute on-line or by phone? If you look at their websites, you know the credit bureaus encourage consumers to phone or email. It is almost impossible to find an address to mail a written dispute letter to.

There are COMPELLING REASONS to do your disputes in WRITING, Certified Mail, Return Receipt. If you have put it in writing and kept a copy and obtained a receipt you can prove exactly what information you provided and that they received it.

You want to provide the credit bureau with as much information as possible so it can conduct a thorough investigation. If you have names and phone numbers of people they should contact, provide them. If you have documents that prove your claims, enclose copies..

Sending a written dispute letter does not guarantee that they will fix your report, but if they don’t you at least have solid evidence to support your lawsuit. Phone conversations and emails are hard to prove. You don’t have as good a record and the credit bureaus can dispute what you said. Emails get lost. You don’t get any proof that they received them.

Please keep copies of everything you sent with the dispute letter, including all enclosures and a copy of your signed letter. (Sometimes it is important for them to have your signature so they can compare it to the signature on the fraudulent account you are disputing.) Your file copy of the dispute letter should be an exact duplicate of what you placed in the envelope to the credit reporting agency.

If Experian, Equifax or TransUnion are reporting accounts that are not yours — either mixed files or fraudulent accounts — and they will not correct it, give me a call. Those are good cases.

A new report by West Point prof Gregory Conti urges the military to reform its practices to protect service members from identity theft. Conti reports that service members and their families are burdened with a work environment that shows little regard for their personal information resulting in frequent theft of their identities.

The Navy and Marines have recently made efforts to limit the use of social security numbers. Military ID cards no longer include the number. But Conti the situation had not really dhanged: “The farther you get away from the flagpole at headquarters, those policies get overturned by operational realities..

Social security numbers are useful to identity thieves because they serve as crucial identifiers interfacing with banks and credit card companies. The thieves open accounts in the service members names leading to ruined credit reports and problems for military personnel getting security clearances or promotions.
In 2009, Social Security numbers were used in 32 percent of identity thefts in which the victims knew how their information was compromised, according to Javelin Strategy and Research, which tracks identity theft.
Javelin last looked at identity theft in the military in 2006, finding that 3.3 percent of active military personnel had been victims of such fraud that year, slightly below the 3.7 percent in the public at large. Over all, identity theft is on the rise; in 2009, the nationwide rate crept up to 4.8 percent, with each person losing $373 on average, Javelin estimated.

The Federal Trade Commission has a site for ID theft victims that covers every type of ID theft. The site has advice for consumers on how they may protect themselves against ID theft and what to do when their ID is stolen.

The FTC has also made available a guidebook for assisting identity theft victims. For example, the guide details how consumers may get assistance in resolving ID theft, sample letters to send to credit reporting agencies and creditors, and the best way to dispute claims by debt collectors,