- advertisement -

One step down, dozens more to go

If you are slammed by identity theft, your cleanup job just got a little easier. Instead of having to notify each of the three major credit-reporting agencies that your identity has been stolen, you only need to call one agency that will send an electronic message to the other two.

- advertisement -

The credit-reporting agencies are pleased with this one-step initiative, but consumer advocates say more needs to be done to help victims.

Last week, the nation's three major credit-reporting agencies, Equifax, Experion and TransUnion announced that they've streamlined the reporting process. One toll-free phone call to any of the three agencies to report ID theft will automatically trigger a "fraud alert" to be placed on the victim's credit report at each agency within 24 hours.

In addition, the victim will be automatically opted out of preapproved offers of credit and insurance for two years and will receive free copies of their credit reports from each agency within three business days.

Identity theft occurs when an imposter obtains key pieces of information such as Social Security and driver's license numbers to obtain credit, merchandise and services in the name of the victim. The victim is left with a ruined credit history and the time-consuming and complicated task of regaining financial health.

Alarming growth continues
This crime has reached epidemic proportions, says Linda Foley, the director of the Identity Theft Resource Center, a national program based in San Diego that provides victim assistance and promotes consumer awareness.

It's the fastest-growing crime on the Federal Trade Commission's list of consumer fraud complaints for the third consecutive year. The Identity Theft Resource Center estimates that 700,000 consumers became victims in 2002.

"Identity theft is a nasty, sneaky crime," says John Ford, the chief privacy officer at Equifax, a credit-reporting agency based in Atlanta. "We are committed to assisting victims deal with the crime, and this one-call initiative is a big step in streamlining the cleanup process," he says.

Consumer advocate Foley is pleased with the effort, but says, "From the victim's perspective, having to call only one of the credit reporting agencies eliminates one step out of possibly 100. While we are delighted with this new initiative, much still needs to be done to make it easier on the victims."

It's up to the individual to fix the problems caused by a con artist using their identification. The individual must prove that he or she did not buy the furniture or rack up the Visa bill. "You are guilty until proven innocent," Foley says.

That needs to change.

One of the larger issues is the effectiveness of the fraud alert. The purpose of this alert is to stop new accounts from being opened in the victim's name. It's a note placed in the credit reports notifying potential credit grantors that you either are a victim of ID theft or that you are concerned that it may happen to you.

The lender is advised to contact you personally to verify each time a credit application is made in your name. Unfortunately, fraud alerts are not foolproof. If a credit grantor does not read the alert, you can get slammed again.

In fact, says Foley there is no law anywhere that says a creditor must follow the alert. It's often ignored. She would like to see a national law mandating mandatory observation of fraud alerts. At least then, no new accounts could be opened.

"Unfortunately, it seems too many creditors are more eager to make the sale in front of them than to thoroughly check out the credit of the person wanting to make the purchase. The reality is that if we don't start verifying credit, we are enabling criminals to victimize," Foley says.

What to do
Protect your personal information very carefully. But, if a con artist snags your identity, here are 8 steps to follow to get the mess cleaned up.


-- Posted: April 28, 2003




Looking for more stories like this? We'll send them directly to you!
Bankrate.com's corrections policy

Credit Cards
Compare weekly rates
Type Fixed Variable
Standard 13.40% 15.02%
Platinum 12.50% 16.02%
All 13.10% 15.76%

  Loan calculator (includes amortization schedule)  
  See your FICO score range -- free  
  What will it take to pay off your credit card?  

Credit Card Basics
Don't get trapped by card debt. Learn to use it wisely.
How to find the best card
Check your credit report
Finance charges explained
How to ask for a lower rate
Improve credit with a card
How to repair your credit

Banking glossary  
News archive  
Keep an eye on the leading rates  
Find a high-yielding CD

- advertisement -

- advertisement -