Ask Jean

Ask Jean Tuesday: Free Yourself from Fraud

Posted by Jean

“My husband and I have been the victims of 8 fraudulent credit cards, embezzlement and forgery committed by his former secretary and her family. We are in dire need of your help. The bank that allowed her to get away with this has now put us in collections for a fraudulent credit card.” - Jean, New Hampshire

I’m so sorry you’re dealing with this – many people don’t realize, but about a third of identity theft cases are committed by friends or family members of the victim, making your situation all the more common. The first thing you need to do, if you haven’t already, is file a police report. This is important, because you may need a copy of a police report to legitimize your claims. You should take that to the FTC to file a complaint there — which can then be used to make debt collectors stop collecting on those fraudulent debts.

Then, put a fraud alert on both your credit file and that of your husband. You can do this by contacting one of the three credit reporting bureaus – Experian, TransUnion, or Equifax. They are required by law to inform the other two. This alert indicates to future creditors that you have been a victim of identity theft and they need to take additional steps to confirm the identity of anyone who asks for credit in your name. You may want to put a credit freeze on your file as well. This is like it sounds — it’s like making your credit report a block of ice, so no new accounts can be opened in your name — and it needs to be done at all three credit bureaus. (Also, keep in mind that it takes three days to lift a freeze off of your account.)

Finally, my assumption is that you’ve contacted the creditors involved with the fraudulent accounts and they’ve been unwilling to help. That is unacceptable. If the creditors are unwilling to close the fraudulent accounts, and you’ve provided them with a copy of the police report, then it’s time to talk to a lawyer about your options, says Stephen Pedneault, a forensic accountant – particularly because you’re being held responsible for the collections. “Here is where you should have an attorney, who could communicate with the card issuers on your behalf.” In addition, says Pedneault, “The fraud units of each affected financial issuer should be investigating how the cards were initially obtained.” It sounds like you may need to bring in the big guns to ensure that this is happening.

Fortunately, there are many steps you can take to prevent fraud and embezzlement from happening in the first place. Here are some tips:

• Review Your Credit Report. By law, you’re entitled to one free copy of your credit report from each of the major credit bureaus each year — so you can pull three copies annually at no charge. To do that, go to annualcreditreport.com. My suggestion? Pull on every four months, so you can keep tabs on your credit file at regular intervals and catch any suspicious activity right away. Reviewing your report regularly can give you assurance that no new credit has been obtained that you don’t know about. You can also look into credit watch programs. They alert you to any activity on your account – from new applications to credit checks – for a small fee.
• Read Your Bank Statements – Closely. Check out everything from your balance to the cancelled check images – this can alert you to fraud attempts quickly. And often, using online banking can give you access to this information as it’s happening, so you can catch it as it starts.
• Know Your Employees. “Employers, especially small employers, really need to know their employees, what they have going on in their lives, and their situations,” says Pedneault. “Most individuals who steal are honest, hard working individuals who have some insolvable financial need occurring in their life, and turn to the company’s coffers to cover the need.” Be sure to know who you’re hiring, what their financial situation is, and be wary of any behavior you notice shifting over time.