Fraud Laws That Protect You
Fraud was so prevalent that in 2003 Congress passed new laws to help identity theft victims regain control of their lives. Most of these changes, contained in the Fair and Accurate Credit Transactions Act (FACTA) will be phased in over time.
Here are some of the laws that work to your advantage –
• If a fraud alert is on a consumer’s credit report lenders will be required to phone the consumer to verify the applicant’s identity before issuing credit or raising a credit limit. This phone alert will be included with any credit report or score that is sold to lenders.
• Any consumer will be able to put a 90-day fraud alert on his or her file by providing a credit bureau with an affidavit. The alert can also be extended for seven years if the consumer provides an identity theft report such as the ID theft affidavit that is provided by the Federal Trade Commission. This report must be filed with a local police agency. Those who file for extended alerts are automatically kept off the marketing lists that bureaus sell to credit card companies and other lenders.
• When a consumer files a fraud alert with one bureau, that bureau will be required to contact the others so that alerts can be put on their records as well.
• Credit bureaus will be required to stop reporting accounts or account information that a consumer identifies as fraudulent report that has been filed with a police agency. This procedure is known as trade line blocking.
• After a bureau informs a creditor that a block is in effect, the creditor must have “reasonable†procedures to keep it from reporting the bad information again and renewing the issue in the consumers file.
• When a block is in effect, creditors will not be able to sell or transfer the debt to a collection agency. If the debt is already in collections, the collector will be required to notify the original creditor that the debt is fraudulent and to provide the consumer a notice of his or her collection rights – if the consumer asks for such a notice.
• Businesses where a thief has opened accounts will have new duties to produce records that they identity theft victim might need to clear his or her name. The businesses however might require the ID theft victim to get an actual police report (which is different and more difficult to get than an affidavit filed with a police agency.
• Credit card machines will be required to truncate all credit and debit card numbers on receipts by 2007 and consumers will be able to request that the credit reports sent to them truncate Social Security numbers.
As these measures take effect in the next few years time will tell how effective they are about protecting credit.
Here is an example of a letter advising a credit bureau that you would like an extended fraud alert placed on your account –
Letter Requesting and Extended Fraud Alert
Fraud Alert
Equifax
P.O Box 740241
Atlanta Georgia 30374
OR
Fraud Alert
TransUnion
P.O. Box 1000
Chester, PA 19022
OR
Fraud Alert
Experian
P.O. Box 2104
Allen, TX 75012
Re: Your name – Social Security Number
Dear Sir or Madam,
Please be advised that I am the victim of identity theft. In accordance with FACT, I hereby request that an extended fraud alert be placed on my credit report. In support of this request, as required by law, I am enclosing an identity theft report.
Also in accordance with the provisions of FACT, I hereby request that I be sent, at no charge, a copy of my credit report.
Thank you in advance for your assistance with this matter.
I may be reached by telephone at (your telephone number) or by email at (your email address.)
Sincerely,
Your name.