Bad Credit, Identity Theft, And Credit Cards

Bad credit may occur as a direct result of identity theft. Identity theft has far reaching effects and can enter into many facets of your life. Let's discuss what to do when someone takes your information, opens up several credit card accounts, and creates huge amounts of debt.

Steps To Take To Minimize The Damage

• Act quickly.
• Be thorough.

The faster you begin the process of repairing the damage, the quicker the damage will subside. Make sure that you contact all of the proper companies and that you follow through and verify that the proper steps have been taken.

Who To Contact

• The three credit reporting agencies: Equifax, Experian, and TransUnion
• The fraud department at each of the credit card companies affected

While identity theft generally affects other areas of your financial life, credit card usage is probably the first place to engage battle. Contact each of the credit reporting agencies immediately in writing. Likewise, do the same with each credit card company that may be involved.

What To Do Specifically To Resolve The Problem

• Contact Experian, Equifax, and TransUnion and have a temporary fraud alert placed on your account. Hopefully, this will prevent the individual from opening any additional accounts using your information. At the very least, it will make it that much more difficult.
• Notify each agency of the accounts that are fraudulent.
• Request a copy of your credit report from each of the companies. You are entitled to a free report.
• Review each report for signs of any new activity that you did not initiate. Perhaps activity generated by requesting other credit cards that have not yet been issued will appear on the report and you can circumvent it by contacting the company now.
• Contact each credit card company through their fraud department sending a registered letter with a return receipt. You will want proof of the date that they received your notice.
• Request that each of the fraudulent accounts is closed immediately to discourage further use.
• Close any personal credit card accounts that you believe might be targeted once the unauthorized or fraudulent credit card accounts are closed.
• File an identity theft report immediately with each of the agencies. This is an extremely important step to follow if you would like to prevent bad credit generated by fraudulent accounts from being placed on your credit reports.
• If an identity theft report is not available in your state, file a miscellaneous incidents report. This will cover the problem sufficiently.
• File an affidavit that will be used to dispute the fraudulent accounts and all charges stemming from them. The affidavit will include a statement that details the fraud. It needs to be notarized for legitimacy. Likewise, a copy will be required for each of the unauthorized credit card accounts.

Even though the consumer may only be held liable for fifty dollars of unauthorized charges for each credit card, the consumer has the responsibility to contact the proper companies to put an end to the illegal use of the cards. In general, the contact must be made within sixty days from the time a billing statement listing the fraudulent charges is mailed. Although Visa and MasterCard have lifted the sixty day requirement, time is of the essence. The sooner the problem is dealt with, the sooner it will become a thing of the past.

Important Things To Remember

• Identity theft is not a crime in all states of the United States.
• Identity theft is a federal crime.

Some states have not yet joined the bandwagon to make identity theft a priority in their investigations. While there are agencies to help with the situation, as well as plenty of printed and online materials to guide the consumer, the consumer must take the reins on this one and lead the charge to victory.

What Are You Responsible For?

• In most cases, the consumer, whose identity has been stolen, will only be responsible for fifty dollars per unauthorized credit card account per the guidelines of The Truth In Lending Act.
• Additionally, the consumer is responsible for alerting the fraud departments and credit reporting agencies, as noted above.

Fortunately, The Truth In Lending Act protects consumers and minimizes the financial liability. However, it is important to keep in mind that the liability exists for each credit card involved.

Bad credit is difficult enough to deal with when you are the culprit responsible. If identity theft happens to you and bad credit results, remember to act quickly and thoroughly to resolve the problem in your favor.