Having one's credit identity stolen is not a new crime. However, identity theft has been increasing rapidly over the past few years, to the tune of 500,000 new victims every year. Identity theft is more than just having your credit card stolen – it is having your entire credit identity taken over by another person. A victim typically finds out that his or her identity has been stolen when he or she receives a call from a collection agency about a past due loan about which the victim knows nothing.
How does this happen? The thief steals something from the victim that helps him or her begin to re-establish the victim's credit identity as the thief's. The thief might take a credit card solicitation out of the trash, or out of the mail box; or might steal credit card receipts that have been discarded or left behind; or simply might steal the victim's wallet or purse. In the worse case, the thief manages to get a hold of the victim's Social Security number. Our Social Security numbers are often used as identifiers: by colleges, the military, and by some states as drivers license numbers (fortunately, New Hampshire does not do this). Social Security numbers are also needed for a variety of investment and other types of commercial transactions, and may appear on quarterly statements. When the statements are discarded, the thief can get the statements, and information, out of the trash. Social Security numbers can even be purchased on the Internet!
The thief uses the stolen information to set up new credit in the victim's name, changing the victim's address to a new one. The thief charges up a storm, may even take out a loan in the victim's name, but, of course, never pays the credit card bills or never makes any loan payments. The victim usually finds out about the theft when a debt collection agency or credit card company demands payment of the past-due debts. There are some laws that can help the victim of identity theft. But it will take the victim a lot of time and energy to remedy the damage done to his or her credit identity by the thief.
In 1998, congress passed the Identity Theft and Assumption Deterrence Act (Identity Theft Act). The purpose of this federal law is to help deter identity theft by making it a felony. Furthermore, identity theft investigations are done by the US Secret Service, the FBI, the US Postal Inspection Service, and are prosecuted by the US Department of Justice. The Identity Theft Act also required the Federal Trade Commission (FTC) to set up an identity theft unit to assist victims in clearing up their credit reports, and to improve law enforcement by tracking cases on a national scale.
Several other laws can also be helpful to the victim of identity theft. The Fair Credit Reporting Act (refer to the section on Credit Reporting) provides the victim with a procedure for correcting, and removing, the adverse information from his or her credit report. The Fair Credit Billing Act (for more information, refer to the section on Credit Cards) provides a process for resolving unauthorized charges on credit cards bills. The Electronic Funds Transfer Act limits liability when unauthorized withdrawals are made using a debit or ATM card (refer to Extra Note: Debit (ATM) Cards for more information). And lastly, when the debt collectors are knocking on the victim's door and calling on the phone, the Fair Debt Collection Practices Act can protect the victim from over-enthusiastic debt collectors (see the section on Credit: Debt Collection for more information).
According to the FTC, here are some of the ways that identity thieves work:
Example: Tom Dearheart receives a pre-approved credit card application in the mail. He absently mindedly tosses it out, un-opened, into his uncovered outside trash bin which is sitting at the end of his driveway because it trash-pick-up day. Don Devious walks by and snatches the application out of the trash, fills it out (changing the address to his own), signs Tom's name and mails it off. Don receives "Tom's" credit card several weeks later and goes on a shopping spree, charging over $25,000 to the card. Of course, Don does not pay the bill when he gets it.
Tom learns of the theft of his credit identity when he gets a copy of his credit report while e is in the process of applying for a mortgage to buy a new home. Tome immediately calls the credit bureau and the credit card company about the problems, and calls the local police, too.
The Privacy Rights Clearinghouse website has a lot of information about identity theft, how thieves operate, and how to protect yourself.
According the FTC, a victim of identity theft should do three things immediately:
You should also file a complaint with the FTC. The FTC is the federal clearinghouse for complaints by victims of identity theft. The FTC can offer information to you on dealing with the aftermath of having your identity stolen:
Online Complaint Form
1-877-IDTHEFT or 1-877-438-4338 (toll-free)
The FTC has a publication that may help you dealing with the aftermath of having your credit identity stolen: "Take Charge: Fighting Back Against Identity Theft." This is available online or you can request a copy be mailed to you by calling the FTC (toll free number given above).
Additionally, if the thief has stolen your mail to get access to a credit card solicitation, or mailed a fraudulent credit card application, or given a false change of address, then the thief has committed mail fraud. So you should also file a report with your local postal inspector.
You may also want to contact your bank if you have reason to suspect that the thief might have access to your bank account. Close any accounts that have been illegally accessed immediately. Stop payment on any checks that have been stolen or misused. Have password protection on any new accounts. Get a new PIN number for your new debit/ATM card.
If the thief has your Social Security number, get in touch with the Social Security Administration. You will want to make sure that your earnings are being accurately credited to you. The Social Security Administration may issue you a new Social Security number if you continue to have problems stemming from your identity being stolen, but this is a last resort:
Social Security Administration – Personal Earnings and Benefit Estimate
If the thief has used your Social Security number, you might also want to check with the NH Department of Motor Vehicles to see if the thief used your identity to get a driver's license. Fortunately, in New Hampshire, we use another number for our license ID rather than our Social Security number.
The Privacy Rights Clearinghouse can provide you with information on dealing with identity theft, including on how to network with other victims:
Finally, the US Secret Service has jurisdiction over cases involving financial fraud. Practically speaking, the Secret Service only investigates cases where the dollar loss is substantial. However, your information may assist the Secret Service in proving a pattern of fraud against a particular thief. Contact the local field office in Manchester at 603-626-5631.
Contact the three credit reporting agencies to put a fraud alert on your file:
Equifax: 1-800-525-6285 (toll-free)
Experian: 1-888-EXPERIAN or 1-888-397-3742 (toll-free)
TransUnion: 1-800-680-7289 (toll-free)
Portable Document Format (.pdf). Visit nh.gov for a list of free .pdf readers for a variety of operating systems.
New Hampshire Department of Justice
33 Capitol Street | Concord, NH | 03301