Chapter 3: Consumer Rights and Responsibilities
Since thieves prey on those who have not taken preventative measures, it is up to you to be careful with all of your identification and financial information. For maximum security, make safety a family affair. Limit and monitor children’s access to the Internet and online transactions, have a designated person collect the mail, and establish guidelines for when telemarketers call and ask for information.
If you have children, you can – and should – safeguard their identity as well as your own. Some companies have mistakenly sent pre-approved offers for credit to those too young to actually have a credit card. Once your child has received one offer, he or she may very well receive others. Monitor the mail carefully and check your child’s credit report.
Unfortunately, even when you have done all the right things, you may still be a victim of identity theft. While consumer protection laws give you rights, it is your responsibility to take action if fraudulent activity occurs.
If someone has used your identity or financial information, it is imperative that you act swiftly and treat the matter seriously. This means, in many cases, dedicating time to letter writing, telephone calls, credit report monitoring, follow-up, and log keeping. Turning from victim to victor takes effort. However, as frustrating as it may be to have to spend the time and energy fixing damage, no one but you can do it.
There are many federal laws that help in the fight against identity theft, both before and after the law is broken.
The Fair Credit Reporting Act
The Fair Credit Reporting Act (FCRA) ensures that the financial data contained in your credit report is not only correct, but private. Only those with a need recognized by the FCRA may access your credit report – usually a creditor, insurer, landlord or other business.
It is the credit reporting agency’s responsibility to report only accurate information, so if you discover a false item, file a dispute. The credit reporting agency has 30 days to investigate your claim (45 days if you obtained your report from the Annual Credit Report Request Service).
Fair and Accurate Credit Transactions Act
The Fair and Accurate Credit Transactions Act (FACT Act) amends the FCRA and provides increased protection against identity theft. This law guarantees consumers the right to access their reports at no charge once every 12 months. The credit bureaus only provide the free reports via Annual Credit Report Request Service, not through their individual websites, telephone numbers, or addresses
Additional protections under the FACT Act include:
- Consumers may receive additional free reports if identity theft is suspected
- Identity theft victims who file police reports may block fraudulent information from appearing on their credit reports
- Active duty military personnel may place special alerts on their files when they are deployed overseas
- Only the last five digits of a credit card number may be listed on receipts.
The Fair Credit Billing Act
The Fair Credit Billing Act provides consumers with a legal dispute process to help with fraud committed on open end credit accounts. It limits your responsibility for unauthorized charges to $50 and stipulates that you won’t be charged for goods and services you didn’t accept or weren’t delivered. To take advantage of the law’s consumer protections:
- Write to the creditor at the address given for billing inquiries and include your name, address, account number and a description of the billing error.
- Send your letter so that it reaches the creditor within 60 days after the first bill containing the error was mailed to you.
- Send your letter by certified mail, return receipt requested. Keep a copy of your dispute letter.
The Fair Debt Collection Practices Act
If you have been a victim of identity theft, and a debt that you did not incur has gone to a collection agency, you have rights under the Fair Debt Collection Practices Act.
Write to the collector within 30 days of receiving notice of the fraudulent debt. The collection agency will conduct an investigation, during which time the collector must cease communication. Only if the debt is determined to be accurate, will collection activity resume.
The Electronic Fund Transfer Act
The Electronic Fund Transfer Act provides consumer protections for ATM, debit card, and other electronic account transactions, including fund transfers.
Report lost or stolen ATM and debit cards immediately to the financial institution, since the amount you can be held responsible for is time sensitive:
- If you report loss or theft within two business days, your liability is limited to $50
- If you report loss or theft after two business days, but within 60 days after a statement showing an unauthorized electronic fund transfer, you can be liable for up to $500
- If you wait more than 60 days, you could lose all the stolen money
Note: You may have additional protection if your ATM/debit card has the VISA or MasterCard logo on it. In most instances your liability for unauthorized use is $50 per card, no matter how much time has elapsed since the discovery of the loss or theft.
If you discover a fraudulent transaction, call your financial institution immediately, then follow up with a letter that explains your dispute. Send it certified mail, return receipt requested, and keep a copy of the letter for your records.