Last year I had a client who lost over $100,000 after becoming a victim of identity theft. These were actual cash dollars that were stolen from his bank account. The worst part is that his bank was not required to refund any of it. All because he was not aware of his rights and the deadlines for reporting the fraud defined in federal laws.
Don't let this happen to you. Learn and remember the deadlines outlined in these laws. Better yet, save this article as you might have to reference one or more of these laws when attempting to restore your identity.
Electronic Funds Transfer Act (EFTA)
The Electronic Funds Transfer Act mandates the maximum number of days a person has to report a discrepancy on his bank statement as well as his limits of liability when reporting a stolen ATM/debit card. Both of these are important to know, otherwise your financial liability could be unlimited.
Discrepancies must be reported to your financial institution, in writing, within 30 days of receiving your statement. Receiving your statement late or not at all does not exempt you from the 30 day limit. It is based on the assumed date you should have received your statement. In addition, your financial institution may have tighter restrictions that are less than the maximum of 30 days. Inquire with your financial institution for additional information.
Recommendation: Report discrepancies within 15 days of the transaction. Don't wait until you receive your paper statement. You are better off taking advantage of accessing your account online. This way you can detect and report discrepancies immediately. (Learn more: Using Online Account Access to Prevent Fraud).
When you report a lost or stolen ATM/debit card can mean the difference between minimal financial liability and unlimited liability. Reporting it lost or stolen within two days will limit your financial liability to $50. This means that the most amount of money you could lose due to fraudulent transactions is $50. Reporting it lost or stolen within 60 days will increase your financial liability to $500. If you wait until after 60 days to report it lost or stolen, your financial liability is unlimited. That's right. You will be liable for all fraudulent charges made on the lost or stolen ATM/debit card.
Recommendation: Keep track of your ATM/debit card at all times. If you are unable to locate it, don't wait to see if you find it. You are better off reporting it lost or stolen and then later finding it as opposed to waiting and increasing your financial liability.
Fair Credit Report Act (FCRA)
The Fair Credit Report Act mandates that credit report disputes must be corrected or deleted within 30 days of reporting the error. This also applies to information that cannot be verified by the credit reporting agency. This law also states that you are entitled to receive one free copy of your credit report from each credit reporting agency every twelve months. The three major credit bureaus are Experian, Equifax and TransUnion. You can obtain your free credit reports online at www.AnnualCreditReport.com. This is the only website endorsed by the Federal Trade Commission (FTC) and the credit bureaus. It will provide you with instant access to your credit report. You will also be able to dispute any discrepancies online.
Recommendation: When reviewing your credit reports, don't forget to review the name and address section, as well as the recent inquiries. These areas are often overlooked and could be the first warning sign of identity theft. If you have not reviewed your credit reports in more than a year, pull all three at the same time. Then, in subsequent years, pull a credit report from a different bureau every four months.
Fair Credit Billing Act (FCBA)
The Fair Credit Billing Act is similar to the EFTA, however it apples to disputes on your credit card statement as opposed to your bank statement. The FCBA mandates that discrepancies must be reported in writing within 60 days after the first bill containing the error was mailed to you. Not the date you received your statement but the date when the credit card company mailed it to you. The law further states that your maximum financial liability is $50. Many credit card companies offer fraud protection which reduces this amount to zero financial liability.
Recommendation: Don't wait 60 days to report a discrepancy. Reconcile your statements immediately. Even better, take advantage of online access to your account and use the alerts offered. This way you will be notified of transactions immediately. (Learn more: How to Protect Your Credit with a Security Freeze).
Fair Debt Collection Practices Act (FDCPA)
The Fair Debt Collection Practices Act mandates that within five days of being contacted by a collection agency the collection agency must provide you with:
- A written statement of what is owed
- The name of the creditor
Not all collection calls are legitimate. Criminals will often pretend to be a collection agency to scare you into either sending them money or confirming personal information such as your social security or bank account information. The best way to determine if the collection call is legitimate is to tell them that per the FDCPA they must provide you with the above listed information. Most of the time they will object, saying they don't have to or that it will be sent to you, but then you'll never receive anything.
If the collection agency is legitimate but the debt is inaccurate, you have 30 days from the initial contact (when you were first contacted by the collection agency) to dispute the claim. Once disputed, the collection agency is no longer allowed to contact you. The dispute should be written and mailed with either a return receipt or tracking to confirm when the collection agency received the dispute notification.
Recommendation: If you are ever contacted by a collection agency for a debt you are unaware of, you should request copies of your credit report. An unexpected collection call could be a sign of identity theft. If the collection account is listed on your credit report or reports, then you can simply dispute the accounts with the corresponding credit bureau. You will also have to dispute it with the collection agency otherwise the credit bureau may determine it is legitimate. You may also be required to submit a police report documenting the identity theft. Simply contact your local law enforcement agency and tell them you are a victim of identity theft.
Having an awareness of these deadlines will greatly reduce your financial liability as well as protect your credit from inaccuracies. Many companies will not take the time to tell you about these deadlines as it is not in their best interest. It is up to you to tell them that you know your rights and that you expect them to abide by the law. It will make a significant difference in your ability to recover from identity theft.