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Identity theft serves up double threat to victims

Identity-theft victims don't make the mess. But they do have to clean it up.

"There's no one who can do it other than the consumer," says Maxine Sweet, vice president of public education for Experian. "Yes, they're a victim. Yes, it's a terrible crime. But there's no one else who can do it."

New initiatives can help identity-theft victims start the long process of proving to creditors, collection agencies and law enforcement officials that they are who they say they are.

But the burden of proof still rests squarely on victims' shoulders.

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Drowning in paperwork
The Federal Trade Commission provides standardized fraud declaration reports that victims can file with banks and creditors. Instead of filling out a separate fraud packet for each creditor, victims fill out a single fraud declaration and send signed copies to each creditor.

The ID Theft Affidavit is most valuable when a new account has been opened in the victim's name. The FTC advises victims to contact each of their creditors to verify that they will accept this form. Most do, but some companies will require more or different forms.

This initiative could save victims time and quite a few headaches.

Nicole Robinson, an identity theft victim from Maryland, spent much of 2000 contacting creditors. She had to find her way through dozens of different fraud notification procedures. An impostor had attempted to open more than 60 credit accounts in three months.

"The whole thing was just like a nightmare and nobody was helping," Robinson says. "All the legwork had to be done by me."

Unfortunately, that's how the credit reporting system works. A credit agency will not remove inaccurate information from a credit report unless a creditor says to. A credit agency simply records information sent by creditors. It does not judge the accuracy of the data it stores.

"That's not our role and not within our capability," Sweet says. "We're not like some jury to say 'You're right, consumer. You're wrong, creditor.' We don't play that role."

When a consumer disputes information on a credit report, the credit agency contacts the creditor and passes along the consumer complaint. The creditor then checks its records and decides whether the data it furnished to the credit agency is correct. If the creditor stands by its information, the data stays on the consumer's credit report.

Fraud alert to the rescue?
The nation's three credit-reporting agencies have streamlined the fraud alert process.

Once an identity-theft victim calls any one of the three credit-reporting agencies, Trans Union, Equifax or Experian, that agency will contact the other two. The toll-free call 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 upon request, receive free copies of their credit report from each agency within three business days.

A fraud alert asks future creditors to contact the victim before any new credit is approved. The purpose of these alerts is to help prevent an impostor from applying for and receiving more credit in a victim's name.

Needing to make just one call helps victims to be able to act quickly when fraud strikes. No more maneuvering their way through the voice mail systems of the three major credit agencies, each with a separate process for reporting fraud. No more waiting weeks for a credit report to arrive.

Eric Graves, whose teen-age son was an identity-theft victim in 1998, was shocked by the amount of red tape involved in requesting copies of his son's credit report.

"Even in the way they require you to prove that you are who you say you are. I had to fax all kinds of different things to them just to get a report," Graves says.

"You're sort of treading in waters you're not certain of, and you're wasting a lot of time."

The lonely battle
Identity-theft victims are urged to contact creditors on their own. Creditors receive heaps of consumer disputes from credit agencies every month. Mixed in with complaints from identity-theft and fraud victims are protests from folks contesting negative, but accurate, credit information.

"The guilty protest as much as the innocent," Sweet says.

The best way for fraud victims to stand out amid all these disputes is to contact creditors individually. Unfortunately, there's no way to "make" a creditor or a collection agency believe an identity-theft victim.

"The creditors were like 'We don't care. We didn't lose anything,'" Robinson says. "The creditors who did lose something ... it wasn't a big deal to them. It was a drop in the bucket to them."

Robinson had to threaten to sue several creditors before they would remove inaccurate information from her credit file.

There also doesn't seem to be a way to make creditors heed the fraud alerts that victims place on their credit reports. A fraud alert is supposed to stop a creditor from granting more credit to an impostor. But an alert will only work if a creditor takes the time to read it. This doesn't always happen. Plus, some creditors grant credit without even pulling a person's credit report.

So identity-theft victims end up monitoring their credit reports and disputing inaccurate information long after learning of the crime. It's the only way to keep their credit reports clean.

"Be persistent. Stay after it. Get all the information you can," says Robert Greer, an identity-theft victim from New Hampshire.

"Once you're a victim, you're a victim. You can't undo that. It's a matter of minimizing the damage."

-- Updated: May 9, 2005


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