Identity Theft and the fair credit reporting act

When people think of the negative effects of identity theft, their first concern usually concerns credit reporting. In fact, a credit report pull is usually the first indication to someone they they have been victimized. Consequently, one of the primary ways I deal handle identity theft on behalf of my clients is to help them avail themselves of the protections provided under the Fair Credit Reporting Act ("FCRA").

The FCRA is a federal statute that was passed in the late 1960's that regulates credit reporting in this country. In 2003, the FCRA was amended to include protections for people who are victims of identity theft. One of the added section, 15 U.S.C. §1681c-2(a), states:

"Except as otherwise provided in this section, a consumer reporting agency shall block the reporting of any information in the file of a consumer that the consumer identifies as information that resulted from an alleged identity theft, not later than 4 business days after the date of receipt by such agency of—

(1)appropriate proof of the identity of the consumer; 

(2)a copy of an identity theft report; 

(3)the identification of such information by the consumer; and 

(4)a statement by the consumer that the information is not information relating to any transaction by the consumer."

Breaking this down, the protections provided by this section are fairly robust. First, the statute places a hard deadline of 4 business days for the credit reporting agencies to block the information appearing on a credit report that resulted from identity theft. Second, the only items the identity theft victims needs to send to the credit bureaus are proof of identity (usually a drivers license), an identity theft report (i.e. a police report), and a statement identifying the information and stating that the account was not opened by the consumer.

Everything above is the good news. The bad news is that the bureaus often don't get it right and do what they're obligated to under the law. If you didn't need an identity theft attorney prior to that point, you certainly will afterward. It's often only through litigation (under the FCRA) that credit agencies will remove the stolen information and give you back your good name.