As many as 15 million Americans have their identities stolen and used fraudulently each year. After a theft has been discovered, repairing the damage done to one’s credit, is often stressful, time-consuming, and expensive. But it is by no means an impossible task. Taking swift action and being patient is highly recommended. Here is a breakdown of the steps of action following identity theft that can help resolve the problem without shattering nerves.
Getting Credit Reports
If you are suspicious that something is wrong, the first step is to check for evidence by way of your credit reports. Sites such as creditkarma.com provide credit reports for free. The reports will have all the details about your credit history. It will show new credit transactions, credit card accounts opened in your name, or debts that you are not aware of, and the balances on all of them.
Filing a Police Report
With the evidence of identity theft and the misuse of your credit, the next step is to file a police report as soon as possible. Identity theft offenses can be charged as a felony or misdemeanor, depending on a number of things including jurisdiction. Regardless of the possible charge, they are serious crimes that must be brought to the attention of your local law enforcement agency. Be ready to provide authorities with the evidence you’ve gathered that support your claim.
Contacting Companies With Whom Fraudulent Accounts Have Been Opened
Call every company where fraudulent accounts have been opened and fraudulent transactions have occurred, and submit a copy of the police report. Some victims of identity theft may give their local law enforcement officer written permission to contact the company on their behalf.
Most larger companies and financial institutions have a fraud department responsible for handling disputes related to charges and fraudulent accounts. When identity theft is verified, they close the fraudulent account(s) immediately. Many, if not most all credit card companies offer immediate refunds for fraudulent charges, with some also taking up the case with credit bureaus. It is also a good idea to ask for the copies of documents used by the identity thief to open a new account or make charges against the existing one. They can come in handy during the investigation and prosecution.
Contacting Credit Bureaus to Negate Items, Freeze Security and Issue Alerts
Accounts affected by the theft must be brought before Equifax, TransUnion or Experian, along with a letter from the lender and a copy of the police report.
- Upon request, credit bureaus will place a security freeze on credit files to keep future creditors from reviewing your credit history without your explicit authorization.
- Credit reports will be cleared off negative items
- Notifying one of the three major credit bureaus about the theft will suffice; upon the verification of the claim, the bureau will provide the other two with the same information.
Activating a Fraud Alert
A fraud alert requires creditors checking an individual’s credit report to verify his/her identity before opening a new account, increasing the credit limit on an existing account, or issuing an additional card. An extended fraud alert is placed on a credit report after the identity theft has been discovered and identity has been stolen. Upon activating this alert, lenders will be required to contact you over the phone, email or by other means to authorize the use of your name on applications or to extend new lines of credit. If the communication is unsuccessful, the application will be refused, and a fraud alert will be issued.
An extended alert is applicable on an account for seven years. Activating it immediately entitles you to two free copies of your credit report from each of the three bureaus over a period of one year.
An initial fraud alert is another type of fraud alert placed by those who believe that they have or they’re about to become a victim of identity theft. Credit bureaus keep the alert on file for 90 days. Activating it entitles you to one free copy of your credit report from credit reporting companies.
What if Creditors Don’t Co-operate?
At times, creditors may try to coerce collections for fraudulent bills. In such a case, it is important to be aggressive in stopping collections and focus on clearing your credit. Reporting creditors to your state attorney general and letting creditors know you are doing that, is a good push-back. In severe cases, engaging the services of an attorney may be the only solution to the predicament.
Summary
The credit repair process can be long and cumbersome. It will require follow-ups with lenders, credit bureaus and the police to check for false items and, hopefully, offer closure when the perpetrator is caught. Making matters worse are the potential costs involved in credit repair. Identity theft insurance can reimburse the costs involved in the process and make the experience of it all less anguishing.
