What Are Credit Bureaus Required To Do When Your Identity Is Stolen?
Identity theft occurs when someone obtains some of your personally identifying information. Such data include your Social Security number, full name, or credit card numbers. With this information collected, the thief then uses this information for personal gain. For example, they might open credit card accounts in your name or claim your tax refund.
If someone opens up an account in your name, it could appear on your credit report and damage your credit. Because of this issue, the Fair Credit Reporting Act (FCRA) does not allow credit bureaus to report information that you claim resulted from identity theft. According to the Consumer Financial Protection Bureau (CFPB), credit bureaus sometimes fail to block reporting of accounts that consumers have claimed identity thieves opened.
Credit Bureaus must block the reporting of any information in the credit file you claim resulted from identity theft. They have four business days to do this once notified.
To have the credit bureau block this information, you must send proof of your identity and a copy of the theft report you filed when you discovered the identity theft. In addition, it must accompany a statement listing the transactions you wish to dispute and an assertion that you did not make the transactions.
After this, the credit bureau will inform the lender that an identity thief may have opened the account. They must also know that you have requested that the bureau block the information. Suppose the credit bureau believes you misrepresented any information in your request to block the accounts, benefited from the blocking, or mistakenly requested the block. In that case, they may refuse to stop reporting on the accounts.
Once notified of the disputed accounts by the credit bureau, the lender should ensure they do not report the information again. You could also contact the lender directly and give them a copy of the identity theft report concerning the illegally opened accounts. In this case, they should stop reporting the account until the situation gets resolved. Lenders cannot send the accounts for collection after getting notified that the debts occurred due to identity theft.
If you find yourself a victim of identity theft, you should notify the Federal Trade Commission (FTC) and file a report. Afterward, you should file a fraud report with the credit bureaus. Once you file the fraud alert, lenders should verify your identity before they increase any lines of credit or open any new accounts.
An initial fraud alert lasts a year and can extend at the end of the year. In addition, those who have become victims of identity theft and filed identity theft reports can get an extended alert, which will last seven years.
Once you notify the credit bureaus of information in your credit file that resulted from identity theft, you can ask them to cease reporting the data. If they do not stop reporting it in a timely manner, you can file a complaint with the FTC or CFPB.
If you are a victim of identity theft, you should run a self-background check. Reviewing your report lets you know whether an identity thief has used your information for criminal purposes.
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