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Resolving Credit Problems
 

Many consumers become frustrated or overwhelmed as they try to correct the damage done by identity thieves. Help yourself by approaching the problem like you would any other major project: Be proactive, organized, and document your activities.

Mistakes in Your Credit Report

A federal law - the Fair Credit Reporting Act - establishes procedures for correcting mistakes on your credit report. Both the credit bureau and the organization that provided the information to the credit bureau (the information provider, such as a bank or credit card company) are responsible for correcting inaccurate or incomplete information in your report. To preserve your rights, follow the steps below.  

  • Call the credit bureau. Tell them what information you believe is inaccurate.
  • Follow up in writing. Send your letter by certified mail, return receipt requested, so you can document what the credit bureau received and when.
  • Include copies (NOT originals) of documents that support your position. If you don't have any paperwork from the creditor, send a copy of the police report and the ID Theft Affidavit. Include the following information: 
    • Your complete name and address
    • Each item in your report that you dispute
    • The facts of your case and why you dispute the information
    • Request deletion or correction of your report.
  • Keep copies of your dispute letter and enclosures.

The Credit Bureau's Responsibilities

All Investigations must be completed within 30 days (45 days if additional documents were provided).  If the credit bureau considers your dispute frivolous (which may mean it believes you didn't provide enough documentation to support your claim), they must notify you within five business days. Otherwise, the credit bureau must forward all relevant documents you provide about the dispute to the information provider.
 
The information provider must review all relevant information provided by the credit bureau and report the results to the credit bureau. If the information provider finds the disputed information to be inaccurate, it must notify any nationwide credit bureaus to which they report so the credit bureau can correct this information in your file.  Disputed information that cannot be verified must be deleted from your file. 

The credit bureau must correct erroneous information and complete any open items on your report. If you ask, the credit bureau must send notices of corrections to anyone who received your report in the past six months.

If an investigation does not resolve your dispute, ask the credit bureau to include a 100-word statement of the dispute in your file and in future reports. Contact your information providers and tell them that you dispute an item. Again, include copies (NOT originals) of documents that support your position, like your police report and the ID Theft Affidavit. 

For more information, see How to Dispute Credit Report Errors and Fair Credit Reporting, two consumer publications from the FTC.

Credit Cards

In most cases, the Truth in Lending Act limits your liability for unauthorized credit card charges to $50 per card. The Fair Credit Billing Act (FCBA) establishes procedures for resolving billing errors on your credit card accounts. This includes fraudulent charges on your accounts.

To take advantage of the law's consumer protections, you must:

  • Write to the creditor at the address given for "billing inquiries," not the address for sending your payments. Include your name, address, account number, and a description of the fraudulent charge, including the amount and date of the error. Send your letter so that it reaches the creditor within 60 days from when the first bill containing the fraudulent charge was mailed to you.
  • Send your letter by certified mail, return receipt requested. This will be your proof of the date the creditor received the letter. Include copies (NOT originals) of sales slips or other documents that support your position. Keep a copy of your dispute letter.

The creditor must acknowledge your complaint in writing within 30 days after receiving it, unless the problem has been resolved. The creditor must resolve the dispute within two billing cycles (but not more than 90 days) after receiving your letter.

For more information, see Fair Credit Billing and Avoiding Credit and Charge Card Fraud from the FTC.

Debt Collectors

The Fair Debt Collection Practices Act prohibits debt collectors from using unfair or deceptive practices to collect overdue bills that a creditor has forwarded for collection.

You can stop a debt collector from contacting you by writing a letter to the collection agency telling them to stop. A collector also may not contact you if, within 30 days after you receive the written notice, you send the collection agency a letter stating you do not owe the money.

Although your letter should stop the debt collector's calls and dunning notices, it will not necessarily get rid of the debt itself, which may still turn up on your credit report.

A collector can renew collection activities if you're sent proof of the debt. So, along with your letter stating you don't owe the money, include copies of documents that support your position. If you're a victim of identity theft, include a copy (NOT the original) of the police report. If you don't have documentation to support your position, be as specific as possible about why the debt collector is mistaken.

For more information, see Fair Debt Collection from the FTC.

ATM Cards, Debit Cards and Electronic Fund Transfers

The Electronic Fund Transfer Act provides consumer protections for transactions involving an ATM or debit card or any other electronic methods of debiting or crediting an account. It also limits your liability for unauthorized electronic fund transfers.

It's important to report lost or stolen ATM and debit cards immediately because the amount you can be held responsible for depends on how quickly you report the loss. If you report your ATM card lost or stolen within two business days of discovering the loss or theft, your losses are limited to $50. If you report your ATM card lost or stolen after the two business days, but within 60 days after a statement showing an unauthorized electronic fund transfer, you can be liable for up to $500 of what a thief withdraws. If you wait more than 60 days, you could lose all the money that was taken from your account from the end of the 60 days to the time you reported your card missing.

The best way to protect yourself in the event of an error or fraudulent transaction is to call the financial institution and follow up in writing - by certified letter, return receipt requested - so you can prove when the institution received your letter. Keep a copy of the letter you send for your records.

After receiving notification about an error on your statement, the financial institution generally has 10 business days to investigate. The institution must tell you the results of its investigation within three business days after completing it and must correct an error within one business day after determining that the error has occurred. If the institution needs more time, it may take up to 45 days to complete the investigation - but only if the money in dispute is returned to your account and you are notified promptly of the credit. At the end of the investigation, if no error has been found, the institution may take the money back if it sends you a written explanation.

For more information, see Electronic Banking and Credit, ATM and Debit Cards: What to Do If They're Lost or Stolen, two consumer publications from the FTC or call 1-888-CALL-FCC.

FACT Act

The Fair and Accurate Credit Transactions Act provides consumer protections regarding the use, accuracy and privacy of consumer credit reports.

  • Free annual credit reports
  • Credit bureaus must provide credit scores
  • One call fraud alerts placed with credit bureaus
  • Timely investigation of credit report disputes
  • Mortgage lenders must provide credit scores
 

Copyright © 2013    ITAC, the Identity Theft Assistance Center, is the national advocate for identity theft victims and a leading voice on identity policy. Millions of consumers have access to the ITAC victim assistance service through our members - the financial services companies who support ITAC and offer it as a free service for their customers. ITAC is dedicated to protecting all consumers through education, research and the criminal prosecution of identity crime.