Identity Theft and How to Recover Your Credit History

According to the Federal Trade Commission (FTC), which tracks reports of identity theft and credit card fraud, about 7-10% of Americans are affected by identity theft every year. That roughly translates to 1 out of 10 people who may have been negatively impacted by identity theft or credit card fraud. In 2020 alone, the FTC received 2.2 million reports of fraud, which is nearly a 46% increase from the previous year.

Identity theft and fraud are on the rise due to the ongoing COVID-19 pandemic. Thieves and charlatans have an easier time fooling stressed and worried people into giving up their information. Not only that, these bad actors use this stolen information to open new accounts under someone else’s name and spend the money on online retailers, gift cards, and even cryptocurrencies.

Depending on the thief, they may use stolen credit cards to launder money into other things that are hard to get back. Victims have lost a total of $3.3 billion due to fraud in 2020. That money comes from the hard work of victims, credit card companies, and banks. Everyone loses a bit when identity theft and fraud occurs.

This can be incredibly frustrating, especially to victims who don’t even know they are victims yet. People can lose a lot of money dealing with fraud especially when a collection agency utilizes strong, aggressive rhetoric while calling ignorant victims and demanding money or payment for loans they never even took out. This can be stressful and people may end up paying a collection that’s not even theirs to get agencies off their backs and get their credit history in the green again.

However, this is not the best solution to deal with fraud in your name. It’s a loss of money, a loss of sanity, and a loss in terms of your credit score.  

 

 

What to do?

Fortunately, victims of identity theft and fraud have zero obligation to pay off to these collection agencies as it’s not their collection in the first place. There are safe and effective ways to get the debt collector off your back and off your credit report. 

According to the Fair Credit Reporting Act (FCRA), the creditor and/or the collection agency must stop all collection efforts if it is the result of identity theft and/or fraud, as stated within their rules: “until the debt collector obtains verification of the debt or a copy of a judgment, or the name and address of the original creditor, and a copy of such verification or judgment, or name and address of the original creditor, is mailed to the consumer by the debt collector.”

There are multiple ways to dispute these derogatory items and collections from your credit report. The best and simplest way is to send a letter to both the creditor/collection agency and the credit bureaus (Equifax, Experian, and Transunion) disputing the items in question. Nonetheless, a simple letter may not do the job. 

It’s important to file a police report upon discovery of identity theft and fraud; e.g., if someone breaks into your home or car and steals your wallet full of personal information, you should file a police report stating that fact. If you pull your credit report and discover unauthorized and unfamiliar credit accounts and collections, bring that information to a local police department and they will also file a report as well. Once done, keep this report and send it to the collection agencies and credit bureaus alongside your dispute letter.  

 

 

Place a Fraud Alert on Your Credit Report

If you believe you are a victim of ID theft or someone has taken your personal information, you can always report this to the credit bureaus and alert them about potential fraud. Credit Bureaus are required by law to freeze all access to the credit report and stop all opening of new accounts in your name. Luckily, each bureau has an easy and accessible way to place a fraud alert on your behalf:  

• Equifax
• Experian
• Transunion

  You can also call these bureaus and do it over the phone as well. Each bureau will have an active fraud alert status on your credit report that will last at least one year. Remember, it’s best to place a fraud alert with every bureau and not just a single one.

Identity Theft Monitoring

There are multiple third-party services online that also keep track of your credit and alert you of any suspicious activity or identity theft that occurs under your name. However, these services will cost you a premium to access. If you are unable to afford such services, placing a fraud alert with the bureaus directly as mentioned above is free and easy. If you can afford such a service, it may also be a good idea to find a service that will also give you a credit report, so you can see exactly what is being reported to the credit bureaus and find any fraudulent accounts on your own. Most identity theft monitoring services are automated and may not be able to detect all forms of fraudulent activity or may not even detect any malicious accounts that have already been opened by a thief.  

 

Getting Help

With the rage of the pandemic hitting everyone around the world, it may be hard and even overwhelming to deal with fraud. It takes effort from the victim to get their credit report and history cleaned up. Effort means a lot of headaches and time to accomplish the goal of cleaning up your credit. Luckily, there are credit repair services available such as Fix Your Credit Consulting that help with these situations. Call us at (877) 212-2450 for a free consultation, and a professional consultant will provide you with a free consultation. Be aware and stay safe in these trying times as thieves are doing everything they can to deceive and steal from innocent people. Placing a fraud alert alongside being knowledgeable is the best weapon against any potential identity theft in the future.

If you have any questions, feel free to give us a call at 877-212-2450!

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