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Information for Better Decisions
Protecting Your Financial Resources
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Identity Theft
Solving Credit Problems
Don't expect it to be easy. The messes made by identity thieves
can be time consuming and frustrating to clean up. Fortunately,
there are federal laws that outline procedures for correcting
credit report and billing errors, and for stopping debt collectors
from harassing you about debts you don't owe.
Your Credit Report
The Fair Credit
Reporting Act (FCRA) establishes procedures for correcting
mistakes on your credit record. Under the FCRA, both the credit
bureau and the organization that provided the information to the
credit bureau, such as a bank or credit card company, are responsible
for correcting inaccurate or incomplete information in your report.
To protect your rights under the law, contact both the credit bureau
and the information provider (creditor).
Desco Federal Credit Union
provides links to various alternate web sites throughout
our site. When you click on a link, you can see that you
have left the Desco web site by checking the address
line in your browser: the address will no longer begin with
https://www.descofcu.org.
Alternate sites are not operated by Desco. Desco is
not responsible for, and exercises no control over the alternate
web sites, nor does it vouch for the accuracy, privacy,
or security of the information on the destination server.
Desco does not represent either the alternate web site
or the user if the two enter into a transaction. Privacy
and security policies of alternate web sites may differ
from those practiced by Desco.
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Step One
The Credit Bureaus
You've made the initial call to each credit bureau and have received
a copy of your credit report from them. Examine each report closely
to determine what information is incorrect. (For a sample Trans
Union report,
click here.)
Contact each credit bureau in writing. In addition
to providing your complete name and address, clearly identify
each item in your report that you dispute, give the facts and
explain why you dispute the information, and request deletion
or correction. Enclose a photocopy of your report with circles
around the items in question. Include photocopies (NOT originals)
of documents that support your position. Send your letter by certified
mail and return receipt so you can document what the credit bureau
received and when. Click here
for a sample credit bureau dispute letter. Keep photocopies of
your dispute letter and all enclosures.
Credit bureaus must investigate the items in question,
normally within 30 days (unless they consider your dispute frivolous).
They must forward all relevant data you provide to the information
provider (creditor). The information provider must also investigate
and review all relevant information provided by the credit bureau
and report the results back to the credit bureau. If the information
provider finds the disputed information to be inaccurate, it must
notify any nationwide credit bureau that it reports to so that
the credit bureaus can correct this information in your file.
A few things you should know about credit bureaus:
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Disputed items that can't be verified must
be deleted.
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Erroneous information must be corrected.
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If an item is incomplete, the credit bureau
must complete it. For example, if your file shows that you
have been making late payments, but fails to show that you
are no longer delinquent, the credit bureau must show that
you are current.
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If your file shows an account that belongs
to someone else, the credit bureau must delete it.
When the investigation is complete, the credit
bureau must give you written results and a free copy of your report
if the dispute results in a change. If an item is changed or removed,
the credit bureau cannot put the disputed information back in
your file unless the information provider verifies its accuracy
and completeness, and the credit bureau gives you a written notice
that includes the name, address and phone number of the information
provider.
In order to protect yourself, it is a good idea to ask the credit
bureaus to do the following. They must act upon your requests:
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Send notices of corrections to anyone who
received your report in the past six months.
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Job applicants may have a corrected copy
of their report sent to anyone who received a copy during
the past two years for employment purposes.
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If an investigation does not resolve your
dispute, ask the credit bureau to include your statement of
the dispute in your file and in future reports.
Step Two
Your Creditors
To protect your rights under the law, contact all creditors or
other information providers - in addition to the credit bureaus
- in writing. Use the information you gathered
to send to each credit bureau to send to your creditors. Again,
include photocopies (NOT originals) of documents that support
your position. Note that many information providers use a separate
address for disputes, so make sure you send your correspondence
to the correct address. Click here
for a sample creditor dispute letter.
If the information provider reports the disputed item to any credit
bureau, it must include a notice of your dispute. If the disputed
information is found to be inaccurate, the information provider
may not use it again. When negative information in your report
is accurate, only the passage of time can assure its removal.
Accurate negative information will generally stay on your report
for 7 years. There are certain exceptions:
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Bankruptcy information may be reported
for 10 years.
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Credit information reported in response
to an application for a job with a salary of more than $75,000
has no time limit.
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Credit information reported because of
an application for more than $150,000 worth of credit or life
insurance has no time limit.
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Information about a lawsuit or an unpaid
judgment against you can be reported for seven years or until
the statute of limitations runs out, whichever is longer.
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Criminal convictions can be reported without
any time limit.
Specific Credit Card Issues and Protections
The Truth
in Lending Act limits your liability for unauthorized
credit card charges in most cases to $50 per card.
The
Fair Credit Billing Act establishes procedures for resolving
billing errors and/or fraudulent charges on your credit card accounts.
To take advantage of the law's consumer protections, you must:
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Write to the credit card company at the address
given for "billing inquiries". Include your name,
address, account number and a description of the billing error,
including the amount and date of the error.
Click here
for a sample creditor dispute letter.
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Send your letter so that it reaches the credit
card company within 60 days after the first bill
containing the error was mailed to you. If the address on
your account was changed by an identity thief and you never
received the bill, your dispute letter still must reach the
creditor within 60 days of when the creditor would have mailed
the bill. This is why it's so important to keep track of
your billing statements and immediately follow up when your
bills don't arrive on time.
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Send your letter by certified mail and request
a return receipt. This will be your proof of the date the credit
card company received the letter. Include photocopies (NOT originals)
of sales slips or other documents that support your position.
Keep a photocopy of your dispute letter and all enclosures.
The credit card company must acknowledge your complaint in writing
within 30 days, and must resolve the dispute within two billing
cycles (but not more than 90 days) after receiving your letter.
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NOTE: You will not receive the
protections outlined above if you do not act within the
stated time frames.
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ATM Cards, Debit Cards and Electronic Fund Transfers
The
Electronic Fund Transfer Act provides consumer protections
for electronic transactions. It also limits your liability. It's
important to report lost or stolen ATM and debit cards immediately
because the amount you can be held responsible for depends on how
quickly you report the loss.
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Within two business days: your losses are
limited to $50.
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After two business days, but within 60 days
after a statement showing an unauthorized electronic fund transfer:
up to $500.
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More than 60 days: no protection.
Note: VISA and MasterCard voluntarily have agreed
to limit consumers' liability for unauthorized use of their debit
cards in most instances to $50 per card, no matter how much time
has elapsed since the discovery of the loss or theft of the card.
Again, call the financial institution and follow up in writing
by certified letter, return receipt requested so you can prove
when the institution received your letter. Keep a photocopy of
the letter you send and all enclosures for your records.
After notification, the institution normally has 10 business
days to investigate. The financial institution must tell you the
results of its investigation within three business days after
completing it and must correct any error within one business day
after determining that an error has occurred. The institution
may take up to 45 days to complete the investigation, but only
if the money in dispute is provisionally returned to your account
and you are notified promptly of the credit. At the end of the
investigation, if no error has been found, the institution may
take the money back if it sends you a written explanation.
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NOTE: You will not receive the
protections outlined above if you do not act within the
stated time frames.
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Bad Checks
Hopefully, you've stopped payment on your outstanding stolen
checks. If some slipped through the cracks and you've begun receiving
notices, what should you do?
You will probably receive two types of "bad check"
notices; one from your credit union, and one from the merchant.
The merchant will contact you based on the contact information
printed on your check. Each merchant notice will contain information
regarding the bad check, the amount, the check number, the date
written, the fee, and a reference number. There is also a contact
number for the check recovery service. Call the check recovery
service and ask to speak to someone in the fraud department. Provide
them with the reference numbers on the checks, tell them you are
a victim of identity theft, and that the checks involved were
not written by you.
IMPORTANT- Ask to have copies of the disputed checks faxed
or mailed to you.
Ask the check recovery service what you need to provide as proof
that you are a victim of identity theft. You will probably be asked
to provide the following:
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Affidavit of fraud - ask the check recovery
service for one of these to complete.
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Photocopy of the police report.
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Photocopy of your driver's license.
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Statement from your financial institution
confirming that you closed your account because of stolen checks,
and that your signature does not match those on disputed checks.
You must provide copies of the disputed checks for a signature
match. Most financial institutions will have your signature
on file.
Send these packets (affidavit of fraud, police
report, driver's license, & bank statement) to all of the check
recovery services specified on the returned check notices.
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Check Rite: (800) 766-2748
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Chex
Systems: (800) 428-9623
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CRA Security Systems: (800) 486-0955
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CrossCheck:
(800) 843-0760
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Equifax Check Services: (800) 437-5120
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International Check Services: (800)
526-5380
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National Check Fraud Service: (800) 571-2143
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SCAN:
(800) 262-7771
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TeleCheck:
(800) 710-9898 or (800) 927-0188
REMEMBER - Keep photocopies of everything you do, send
all correspondence via certified mail with return receipt, and
take
notes on all of your telephone conversations.
If any check recovery service chooses not to cooperate with you,
you may want to escalate your complaint to the proper authorities.
Start with your State Attorney General's Office, the Federal
Trade Commission (877) IDTHEFT, and finally the Privacy
Rights Clearinghouse (619) 298-3396. You will probably
continue receiving returned check notices for some time. Do not
pay any of the disputed charges and continue to follow up with the
check recovery services.
Debt Collectors
The Fair Debt
Collection Practices Act prohibits debt collectors from
using unfair or deceptive practices to collect overdue bills that
a creditor has forwarded for collection.
You can stop a debt collector from contacting you by writing
a letter to the collection agency telling them to stop, or by
telling them that you do now owe the money. Include photocopies
of documents that support your position. If you're a victim of
identity theft, including a photocopy (NOT original) of the police
report you filed may be particularly useful. Once the debt collector
receives your letter, the company may not contact you again -
with two exceptions: they can tell you there will be no further
contact and they can tell you that the debt collector or the creditor
intends to take some specific action.
Writing the collection agency will not necessarily get rid of
the debt itself, which may still turn up on your credit report.
A collector can renew collection activities if you are sent proof
of the debt.
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