By Robert E. Holtfreter, Ph.D., Educator Associate Member
From the January/February 2009 issue of Fraud Magazine
Our clients and employers look for our counsel on all fraud matters. But our concerned friends, family, and community members repeatedly ask two questions on one type of fraud: "How do I protect myself against identify theft?" and "What do I do if I'm a victim of identity theft?" We have to know what to tell them.
According to 2007 statistics released by the Federal Trade Commission (FTC), the most common identity theft complaints concern credit card fraud (23 percent), phone or utilities fraud (18 percent), employment-related fraud (14 percent), government documents or benefits fraud (11 percent), bank fraud (5 percent), loan fraud (5 percent), and "other" identity-theft-related frauds (25 percent).
Much of the information that follows is taken from the FTC document, "Resolving Specific Identity Theft Problems." In this column and the next I'll outline detailed procedures to follow when attempting to resolve specific types of identity theft frauds. Hopefully, you'll find them helpful enough to share the next time you're sought out for advice on this matter. For our international members, perhaps you could find help in resolving the specific identity theft problems I mention here by checking the Web sites of government agencies in your country that are similar to the ones noted in this column.
Credit Card Fraud
The Fair Credit Billing Act specifies procedures that are useful when attempting to resolve fraudulent charges on credit card statements. Although the law states that your personal liability is limited to $50 for each card, most if not all credit card companies will consider waiving the fee if you talk with them and send a certified dispute letter with a request for a return receipt (which will provide proof of the date the creditor received the letter) to each creditor's "billing inquiries" address. The letter should include your name, address, account number, description of the error (including the date and dollar amount) and a copy of a police report and other supporting documents, if appropriate. You should retain all original documents and a copy of your dispute letter for your records.
Mail the letter so it arrives within 60 days of the credit card statement that included the fraudulent error. If you didn't receive a credit card statement when it should have arrived but became aware of the fraudulent charges by some other means, you're still required to mail the dispute letter so it reaches the creditor within 60 days of when it would have mailed your statement to you.
Unless the problem has been resolved beforehand, the creditor must, within 30 days, notify you in writing that your complaint has been recognized. The creditor has to resolve the dispute within two billing cycles (or not more than 90 days) after the receipt of your letter.
Debt collectors can sometimes be directly involved in the resolution of fraudulent charges reported by creditors. For example, if an identity thief opened a new credit card in your name or used your original credit card to make numerous fraudulent charges, a debt collector might contact you before you can properly dispute the fraudulent activity with the creditor.
If you didn't immediately catch the fraudulent charges because the fraudster didn't use your correct address - or issued a change of address on your old account - you might still have time to contest the charges. The Fair Debt Collection Practices Act offers some protection for you by prohibiting debt collectors from using deceptive or unfair practices attempting to collect overdue bills that a creditor has given to them for collection.
Debt collectors have been under fire for unscrupulous behavior before. According to a Brian Ross and Joseph Rhee report titled "Debt Collectors Gone Wild," published in January 2007 on ABC News' The Blotter, "a report on the debt collection industry issued by the Federal Trade Commission ... found that consumers filed a record number of complaints against collectors in 2005, up 14 percent from the previous year."
The FTC report noted that the 66,627 debt collection complaints received were higher than complaints received against any other industry. Yet, according to Ross and Rhee, the number of debt collection complaints "represents a relatively small percentage of the total number of consumers who actually encounter problems with debt collectors. By far, the most common complaint to the FTC was from people who say they were pursued for payment over charges they did not owe."
The FTC says you can prevent a debt collector from contacting you in one of two ways:
1. You can write to the collection agency and request that it stop its collection process with you. Upon receipt of the letter, the collection agency can only contact you again under two circumstances: if it informs you that further contact will cease or that the debt collector or creditor intends to take a specific action.
2. After you receive notice of the debt from the collection agency, send a letter to it within 30 days and specifically tell it why you think the debt is invalid. You should include copies of documents, including a police report, which support your claim. The collection agency then is responsible for providing proof that the debt is valid and can only restart collection activities after it does so. If you dispute the debt because it's associated with a credit card you never applied for, request a copy of the credit card application with the applicant's fraudulent signature. This will give you a chance to prove the signature is a forgery.
In addition, the debt collector must tell the creditor for whom he's working that he's trying to collect a debt from an individual who might be a victim of identity theft. It's so important that you contact the company that originally opened the account and dispute the fraudulent activity immediately after you discover it. If you don't, the company might send it to another debt collector, report it on your credit report, or possibly start legal action to collect the debt.
Telephone/Other Utilites Fraud
Telephone fraud occurs when an identity thief uses a person's name to set up phone service, makes unauthorized charges on a person's cell, or uses a stolen calling card and PIN. If this happens to you, immediately call your service provider to cancel your accounts or calling card. Then, open new accounts and select new PINs.
If the provider doesn't remove the fraudulent charges or close an unauthorized account, then contact your state Public Utility Commission (PUC) to file a complaint and/or the Federal Communications Commission (FCC) for cellular phones or long distance.
Every state has its own PUC to regulate the rates and services of public utilities. Public utilities include telephone service, electricity, natural gas, water, and waste/sewage. Therefore, you can contact your local PUC if you suspect wrongdoing or possible fraud with any of your local utilities.
The FCC regulates interstate and international communications for radio, television, wire (and wireless), satellite, and cable. File your complaint online at www.fcc.gov, e-mail your questions to fccinfo@fcc.gov, call 1-888-CALL-FCC, or write Federal Communications Commission, Consumer Information Bureau, 445 12th Street, SW, Room 5A863, Washington, DC 20554.
Mail Fraud
The U.S. Postal Inspection Service (USPIS), the law-enforcement arm of the U.S. Postal Service, is responsible for investigating identity theft cases that involve the mail system. Report identity theft to the USPIS if one or more of the following happens to you:
The USPIS also has jurisdiction over cases in which identity thieves falsify change-of-address forms or obtain personal information through any fraud conducted by mail. If you or someone you know has become a victim of mail fraud, contact the nearest USPIS district office. Check www.usps.gov/websites/depart/inspect, visit your local post office, or see the Blue Pages of your telephone book. If you want to opt out of the pre-approved offers provided by credit agencies to credit card companies, call 888-567-8688 or visit www.optoutprescreen.com.
Passport Fraud
If your passport has been lost or stolen, someone might be impersonating you or using the document for fraudulent purposes. If you believe someone is fraudulently using your passport, contact the U.S. Department of State at www.travel.state.gov/passport/passport_1738.html or call a local USDS field office listed in the Blue Pages of your telephone book.
Social Security Number Fraud
Contact the Social Security Administration (SSA) Office of the Inspector General if you have fairly solid proof of Social Security number misuse that includes the buying or selling of Social Security cards, engaging in terrorist activity, or obtaining Social Security benefits.
File a complaint with the SSA online at www.socialsecurity.gov/oig, call 1-800-269-0271, fax (410) 597-0118, or write SSA Fraud Hotline, P.O. Box 17768, Baltimore, MD 21235.
If you need to get a new Social Security card to replace your lost or stolen card, or if you need to request a copy of your Social Security statement or verify the accuracy of your earnings statement, call the SSA office at 1-800-772-1213.
Driver's License Fraud
This can be directly related to Social Security fraud. Identity thieves sometimes use a victim's Social Security number to obtain a non-driver's card or driver's license. If your state uses your Social Security number as your driver's license number, contact your state department of motor vehicles and request a different number.
Student Loan Fraud
If you believe an identity thief has obtained a student loan using your name, call the school or program that opened the loan, and tell them to close it. You should also report the fraudulent activity to the Department of Education at www.ed.gov/about/offices/list/oig/hotline.html. Call the department at 1-800-MIS-USED or write the Office of Inspector General, U.S. Department of Education, 400 Maryland Avenue, SW, Washington, DC 20202-1510.
Tax Fraud
Contact the Internal Revenue Service (IRS) immediately if you believe you have an unresolved federal tax problem related to identity theft. Go to www.irs.gov and type in "Identity Theft."
Visit your state's tax revenue Web site if your case involves fraudulent identity theft issues regarding a type of state taxes.
More Help for the Community
I hope you'll be able to use this column to help those who believe they might have become victims of identity-theft-related frauds. The next column will focus on specific measures to resolve other identity-related frauds. Stay tuned.
Robert E. Holtfreter, Ph.D, Educator Associate Member, is Distinguished Professor of Accounting and Research at Central Washington University in Ellensburg, Wash. His e-mail address is: holtfret@cwu.edu