One of the topics most frequently asked about by visitors to our credit news blog is identity theft. Common questions include how to protect personal information and what to do if they become a victim. But one question that everyone should have answered is what their rights are if their identity is stolen. The Federal Trade Commission (FTC) combats the crime by enforcing a variety of laws that mandate that financial entities put protections into place to ensure consumers’ information doesn’t fall into the hands of unauthorized or crooked people.
With the help of the Federal Trade Commission Staff Report survey of identity theft victims, we’ve compiled the following list of important consumer rights for victims of an identity thief:
Notification of Your Rights
Credit reporting agencies (CRAs) are required by law to notify consumers of their rights when they contact them to report a concern about potential fraud or identity theft. The notice must include their rights when attempting to remedy the effects of identity theft and information about contacting the Federal Trade Commission for further inquiries.
Place a Fraud Alert
Having a fraud alert placed on your credit file is one of the best tools to prevent identity theft before it happens. The FTC survey reported that 44% of the more than 600 respondents were not aware of their right to place a fraud alert when they contacted one of the credit reporting agencies (CRA). A fraud alert is placed on their credit files when a consumer in good faith is concerned of suspicious activity that may lead to identity theft.
Potential creditors will then be notified to take special care and follow specific procedures to verify all inquiries before extending new credit to insure the authenticity of the application. With a fraud alert in your credit file, whenever you apply for credit or a loan, you’ll be contacted by phone to confirm that you applied for a new account. Notify just one of the three CRAs and the remaining two will be notified by the first.
Request a Free Credit Report
You should follow the procedure to get a free credit report after placing a fraud alert on your credit report. Consumers have the right to receive a separate report from each CRA when dealing with the threat of identity theft (not considered one of the free reports consumers are eligible for every six months.)
Dispute Credit Reports Discrepancies
Many consumers may discount the importance of having credit report errors corrected, but the damage that can be incurred by leaving an inaccurate record can be devastating when additional credit is needed. You have the right to dispute any inaccuracy you discover to the CRA or to the creditor that provided the disputed data. According to the FTC report, however, consumers are under the wrong impression that simply by filing a dispute the questioned information will be purged from the report. For that to happen, an investigation by the creditor or CRA will be performed and only if the information is found to be inaccurate will the credit report be corrected, per your request.
Block Disclosure of Errors
As important as disputing fraudulent activity or inaccurate information on your credit report is, blocking the release of that information may be even more important. If a potential lender sees what could potentially be negative activity that is in error, you could lose out on the opportunity for additional credit. It is your right to stop the dissemination of any errors. Provide proof of identity theft to the CRA and they are required by law to stop reporting disputed information within four days of receiving it. The CRA must also notify the provider of the information that the information may be the result of identity theft and has been blocked.
If you find that you need to dispute something on your credit report, document all communications, be persistent and follow up, if you don’t get a timely response or resolution. And don’t be pressured into signing on for a fraud alert service that promises to warn you of future fraud attempts. If you’re interested in such a service, take the time to research and compare; don’t just sign on the dotted line when it’s being offered while under duress.
About the Author: Noreen Ruth writes for ASAP’s credit card blog and several popular finance websites. She is interested in educating consumers about using credit responsibly and about legislative action that will affect their ability to borrow the money they need. She has contributed hundreds of articles to various online sites that provide content to educate consumers on credit, top credit card offers, debt relief services, loans and other finance related topics.