Credit Fraud: The Road to Recovery Against Identity Theft

Credit Fraud can happen in a variety of ways. With the right information, an identity thief can wreak havoc on your life. The good news is that you can recover from credit fraud and identity theft.

When Jason Lee tried to refinance his home this year, he found out that his credit score was extremely low. He knew something was wrong, as he had always maintained a good score. A quick review of his credit report revealed that he was a victim of identity theft. Identity thieves used his name and Social Security number to open up three lines of credit, which were later charged off due to lack of payment. His good credit was destroyed.

Lee acted quickly, informing police and creditors that he was an identity theft victim. However, he soon found out that clearing his name and credit report would be a long and tedious process. “Someone went on a $4,000 shopping spree in my name,” says Lee. “Come to find out, there’s little I can do about it. Six months later, my credit is still a mess and the police still haven’t nabbed the thug who stole my information.”

Lee’s story is not unique. A recent identity theft Gartner study shows that from mid-2005 until mid-2006, nearly 15 million Americans were victims of fraud that stemmed from identity theft. To make matters worse, the research firm says that identity theft victims are losing more money and getting less of it back. The average loss of funds in a case of identity theft was $3,257 in 2006, up from $1,408 in 2005. In 2005, victims recovered 87 percent of funds; in 2006, they recovered only 61 percent. When was the last time you checked your credit report? You should review your credit report today by signing up for Equifax 3-in-1 Credit Monitoring today.

Fight Back Against Credit Fraud and Identity Theft

Credit Fraud Protection has research all of the top identity theft protection services available to help you prevent credit fraud and identity theft. Our identity theft protection recommendations can help ensure that you never have to go through the financial and emotional struggles that go hand-in-hand with identity theft. However, if you have had the misfortune of becoming an identity theft victim, we recommend taking the following steps to recovery immediately:

Step #1—Notify and investigate identity theft

The biggest problem with identity theft is that the damage usually comes from what you do not know, rather than what you know. For this reason, you should always report the crime and start investigating as soon as you find out about it. Be sure to keep track of all correspondence with these organizations, including a log of the names, dates and phone numbers of the people you talk to.

  • Report the theft to your local law enforcement agency. Be sure to get a copy of the police report, as credit card companies and financial institutions may request a copy of this report to verify the crime.
  • Notify all financial institutions you have an account with that you are a victim of identity theft. Change your account numbers and passwords immediately.
  • File a complaint with the Federal Trade Commission. You can file a complaint using the online complaint form; or call the FTC’s Identity Theft Hotline, toll-free: 1-877-ID-THEFT (438-4338); TTY: 1-866-653-4261; or write Identity Theft Clearinghouse, Federal Trade Commission, 600 Pennsylvania Avenue, NW, Washington, DC 20580.
  • Contact the fraud departments of the three major credit bureaus. Ask them to send you a free credit report and put a “fraud alert” on your account.

Step #2: Close any fraudulent accounts

Contact the security or fraud department of each company on your credit report. Follow up in writing, via certified mail, and include copies of supporting documents, such as police reports and collection notices. If an identity thief has made charges on your accounts, or has fraudulently opened accounts, request forms to dispute those transactions.

Once you have resolved your identity theft dispute with the company, request a letter stating that the company has closed the disputed accounts. This will come in handy if the fraudulent accounts reappear on your credit report or if you receive collection notices.

Step #3: Be proactive against identity theft

Identity theft victims lose a great deal of time, money and peace of mind. In addition, it can take years to repair damaged credit and your good reputation. Therefore, it is wise to take a few simple preventative steps to protect yourself as much as possible before it happens.

  • Keep an eye on your mail. Know when your account statements come; pay attention to your finances; obtain a copy of your Equifax 3-in-1 Credit Monitoring; and make sure you check for fraud regularly.
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