Identity fraud can be financially and emotionally devastating. According to some studies, victims of identity theft suffer the same emotional harm suffered by victims of violent crime. Even those that don’t, still suffer from devastating financial loss and a massive consumption of time to repair the damage done to their credit. Here are a few tips to stop identity fraud debt collection to recover quickly and effectively.
Lay the groundwork and send identity fraud dispute letters
Place fraud alerts on your credit reports
Fraud alerts are an excellent way to stop future identity theft from occurring. Place one any time your credit is stolen or used without your permission. They are only a short-term solution and do not stop collections for existing debt, however, so it is important to take additional steps as well.
File a police report
Once you discover your credit has been stolen or your name has been used to establish new credit you should file a police report. In most cases, the police will not actually investigate the fraud or prosecute the perpetrator but the report is helpful in disputing the identity theft accounts with the credit bureaus and collection agencies. File a report but don’t hold your breath waiting for police to actually act.
Send identity fraud dispute letters
Your next step is to send identity theft dispute letters to the credit bureaus and collection agencies. Properly done, these letters put the collection agencies and credit bureaus on alert that your identity or credit was stolen and informs them which accounts they cannot report or collect. There are numerous mistakes you can make in sending these fraud dispute letters so be careful and make sure you handle these letters correctly.
Avoid common identity fraud credit repair mistakes
Mainstream credit repair companies
One of the biggest mistakes consumers make in trying to recover from identity fraud or to stop identity theft debt collections is to hire a mainstream credit repair company. The simple fact is that almost all credit repair companies handle identity theft incorrectly. And its not even close. Many are so incompetent that they simply treat your identity theft debt collections the same as they would any other credit listing by sending the same cookie-cutter credit dispute letters over and over again.
The damage this can cause your case cannot be overstated. Sending a form letter like the mainstream credit repair organizations send can waive your legal rights and, if worded incorrectly, can actually result in making you liable for the debt when you were not liable before. Improperly worded dispute letters can also get you sued for the debt even when it isn’t actually yours. For example, in an identity theft fraud case that recently came across my desk the consumer was a victim of identity theft but tried to no avail to dispute the account using a well-known credit repair law firm. After months of sending the same form cookie-cutter credit dispute letters the firm had already sent on thousands of previous cases and the account was still being reported. The collection agency was also still attempting to collect the debt.
Identity theft collection agency letters
Victims of identity fraud can find various websites offering free identity theft collection agency letters to download. Use of those dispute letters is not recommended for several reasons. First, the letters we reviewed do not adequately protect your legal rights. Preserving your rights is the entire point of sending the letter so if it fails to meet that basic requirement you are doing more harm than good.
Many of the identity theft fraud dispute letters we reviewed also do not properly inform the credit bureaus of the theft. In some cases the dispute letters merely state in conclusory fashion that the account is the result of identity theft while other identity theft collection agency letters request information from the credit bureaus that isn’t even arguably helpful.
Other identity fraud collection letters of explanation threaten the credit bureaus or assert legal doctrines incorrectly. Neither tactic is effective or desirable. Indeed, one of the best ways to instruct the credit bureaus or collection agencies that you don’t actually know what your rights are is to incorrectly assert those rights. Credit repair is as much an art form as a science.
If a debt collector is hounding you for an identity theft account or the credit bureaus are reporting a debt that is the result of identity fraud your best course of action is to act fast. Place a fraud alert, file a police report, and send dispute letters to the creditors, debt collectors, and credit reporting agencies right away.
Trying to stop the identity theft debt collections on your own or by using a mainstream credit repair firm however, can cause more harm than good or even trigger lawsuits against you so use caution. Identity theft debt collections are not a cookie-cutter or form letter situation. These cases are fact-specific and must be handled on a more personal level. Stopping identity theft collections is simply too important to leave up to incompetence or luck.