Key Takeaways
- Identity theft occurs when someone uses your personal information without authorization.
- Identity theft can damage your credit, finances, reputation, and mental health, and block you from key opportunities.
- Common identity theft issues include fraudulent accounts, unauthorized charges, unknown accounts in collections, and credit report errors.
- Identity theft recovery relies on the use of federal laws like the Fair Credit Reporting Act (FCRA) to help identity theft victims restore their credit and financial information.
- You have the right to dispute inaccurate information and may be entitled to compensation.
- Identity theft lawyers help consumers recover faster and enforce their legal rights.
What is Identity Theft Recovery?
Identity theft recovery is a legal practice area handled by consumer protection lawyers who work with federal consumer reporting laws to help identity theft victims get their lives back. Specifically, identity theft recovery is the process of repairing the financial, credit, and personal damage caused when someone uses your personal information without permission.
Recovery often involves disputing fraudulent accounts, correcting credit report errors, recovering stolen funds, preventing further fraud, and enforcing your rights under consumer protection laws.
What is Identity Theft?
Identity theft is a crime in which someone accesses your financial, personal, or official information without authorization for use in the commission of crimes such as theft and fraud, whether against you or others. Identity thieves can be prosecuted for stealing credit, money, benefits, and more, under the criminal legal system. Police and prosecutors handle criminal charges.
Identity theft recovery uses consumer laws in the civil court system to help identity theft victims recover. Identity theft lawyers handle this process.
Common Types of Identity Theft
- Financial Identity Theft- Fraudulent credit cards, loans, and bank accounts.
- Credit Identity Theft- Unauthorized accounts and inquiries appearing on credit reports.
- Tax Identity Theft- Fraudulent tax filings using your Social Security number.
- Employment Identity Theft- Someone uses your information to obtain employment.
- Government Benefits Identity Theft- Unauthorized access to Social Security, Medicare, or other benefits.
- Medical Identity Theft- Medical services obtained using your identity.
How Identity Theft Can Harm You
Identity theft tends to strike in two waves- the initial crime and then the fallout. The first wave is the primary harm caused by the immediate financial and credit fraud. The second wave is the series of continuous, slow-rolling damage that plays out over time.
The most common harms caused by identity theft
- Stolen money
- Fraudulent debt
- Credit score damage
- Collection account reporting
- Loan denials
- Employment issues
- Housing denials
- Benefit disruptions
- Emotional distress
- Reputational damage
Identity Theft Recovery at a Glance
| Identity Theft Problem | What Happens | Possible Consequences | Recovery Step |
|---|---|---|---|
| Fraudulent Credit Card | Account opened in your name | Debt, credit score damage | Dispute account and investigate |
| Unauthorized Loan | Loan obtained using your identity | Collections, denials | Report fraud and challenge reporting |
| Bank Account Fraud | Unauthorized withdrawals | Direct financial loss | Notify bank immediately |
| Credit Report Errors | Fraudulent information reported | Loan and housing denials | File FCRA disputes |
| Benefits Theft | Benefits redirected or stolen | Loss of income or assistance | Report to agency and document fraud |
| Tax Identity Theft | False tax return filed | Delayed refunds | Contact IRS and file identity theft report |
| Employment Fraud | Wages earned under your identity | Tax complications | Correct employment records |
| Debt Collection on Fraudulent Accounts | Collectors pursue fake debts | Harassment and credit damage | Dispute debt and preserve evidence |
What Causes Identity Theft
Identity theft is ultimately caused by the exploitation of security vulnerabilities, emotional vulnerabilities and human connection, gaps in knowledge about technology and online commerce, and consumer goodwill and trust. There are various ways that this type of exploitation happens, including:
Common Causes
- Data breaches
- Phishing scams
- Mail theft
- Social engineering
- Weak passwords
- Public Wi-Fi exposure
- Device theft
- Account takeover attacks
Warning Signs of Identity Theft
As any identity theft lawyer can tell you, there are a number of things to look out for that may signal identity theft and fraud.
Signs you may be a victim of identity theft
- Unexpected credit score drops or credit denials
- Unknown accounts on your credit reports
- Unauthorized credit inquiries
- Collection calls for debts you don’t recognize
- Missing bank funds
- Benefits suddenly stop
- Loan denials you cannot explain
- New account notifications you did not initiate
What To Do If Your Identity is Stolen
Taking these steps will help get you on the path to making a complete identity theft recovery. At every step in the process, remember to preserve all documentation, including copies of: reports, disputes, letters, communications, and evidence.
STEP 1: Freeze Your Credit and Place a Fraud Alert
This should be done immediately to put an end to any additional credit crimes.
Contact:
- Experian
- Equifax
- TransUnion
STEP 2: Change Your Passwords
No matter how the identity theft and fraud came to be, make sure to update your security across every platform. Change passwords (using best practices) and enable two-factor authentication (2FA) wherever possible.
STEP 3: Review Your Credit Reports and Statements
As soon as you can, carefully review your:
- credit report from each credit bureau
- statements for your credit cards, banks accounts, investment accounts, benefits and Social Security accounts, retail accounts, and insurance accounts
You’ll look for things like:
- Fraudulent accounts
- Unauthorized inquiries
- Incorrect personal information
- Unknown debts
STEP 4: File an Identity Theft Report
There are three identity theft reports you should consider filing:
- the Federal Trade Commission (FTC)
- Local law enforcement
- Relevant agencies, like your state Attorney General (if applicable)
Request, print, and keep copies of all reports and confirmations of filing.
Filing a report paves the way for criminal prosecution (though criminal charges are not always possible or pursued), but it also supports your efforts to clear your credit record of false debts, loans, withdrawals, etc.
Later, if errors and bad data from identity fraud remain on your credit reports and statements, these criminal reports help confirm the validity and timing of your identity theft claims.
STEP 5: Report the fraud to financial institutions
Not only do you want to lock down your credit with a freeze, but you also want to inform the financial institutions that hold your accounts:
- Banks
- Credit card companies
- Lenders
- Peer-to-peer payment apps/platforms
Keep in mind that informing a financial institution that you’ve become an identity theft victim is not always the same thing as filing a formal dispute. Informing them puts them on notice that extra diligence is required to make sure future transactions are authorized by you. But if you need to challenge any transactions as fraudulent, you will need to file formal disputes.
Be sure to research how to file a dispute for each financial institution and track the timing and procedural requirements.
STEP 6: Speak With an Identity Theft Lawyer
At any step in this process, get a free consultation from an identity theft lawyer to build a personalized recovery strategy and protect your rights.
Can You Sue for Identity Theft-Related Credit Reporting Errors?
Yes. If credit bureaus, lenders, debt collectors, or other companies continue reporting fraudulent information, fail to investigate disputes properly, refuse to correct inaccurate data, or you suffer harm as a result, you may have legal claims under federal consumer protection laws.
Some of the laws that play a role in identity theft recovery include:
- The Fair Credit Reporting Act (FCRA)
- The Electronic Funds Transfer Act
- The Fair Credit Billing Act
- The Fair Debt Collections Practices Act
What Does an Identity Theft Lawyer Do?
- Helps Restore Your Identity- Guides you through recovery steps, including fraud alerts, credit freezes, documentation, ongoing monitoring, and escalation (if needed).
- Investigates Faudulent Activity- Reviews credit reports, bank records, and account activity to identify unauthorized transactions and determine the extent of the identity theft.
- Gathers Supporting Evidence- Works with you to identify and gather evidence that will support your disputes and claims across all impacted credit and financial instutitions.
- Disputes False Accounts and Charges- Prepares and files legal disputes to challenge fraudulent and unathorized activity.
- Protects Your Legal Rights- Researches and identifies every possible legal protection available based on the specific facts of your situation and anticipates the tactics and challenges used to delay or deny corrections.
- Files a Strategic Lawsuit. If errors aren’t corrected, the fraud isn’t removed, or the fallout persists, a lawyer files an identity theft lawsuit to hold companies accountable.
- Seeks Compensation. If you’ve been harmed by identity theft and you’re entitled to compensation, a lawyer knows how to make the claim and maximize the potential outcome.
How Much Does an Identity Theft Lawyer Cost?
The Fair Credit Reporting Act contains a fee-shifting provision which allows you to get legal help from an attorney without paying anything upfront or out of pocket. If you work with an identity theft lawyer who uses this fee model, the credit bureaus and other companies pay your legal expenses when you successfully challenge them.
You can also get a free consultation so that you pay nothing to have your case evaluated by a lawyer.
Key Takeaways on Costs
- Free consultation
- No out-of-pocket attorney fees
- Fee-shifting provisions under the FCRA
- Recovery of attorney fees from defendants when permitted by law
Contact Consumer Justice Law Firm
We have one of the largest consumer reporting law firms in the nation for a reason. Our team of experienced consumer protection attorneys are dedicated to protecting your rights under the FCRA and other federal laws.
If you’ve been harmed by identity theft-related reporting errors, reach out for a free consultation and personalized legal action plan from Consumer Justice Law Firm.
Frequently Asked Questions
You might experience unexpected denials and rejections for credit and financial opportunities, notice unrecognized or unauthorized accounts, debts, and loans in your name, receive debt collection attempts on debts that aren’t yours, or see inaccurate information in your credit reports or statements.
Immediately contact the fraud department at any affected financial and credit institutions. Freeze your credit and place a fraud alert.
Yes. Identity theft can create unauthorized accounts, lines of credit, loans, and debts in your name. These get reported on your credit report and can negatively impact your credit score and perceived creditworthiness.
Under the Fair Credit Reporting Act (FCRA), inaccurate items should be investigated and removed from your credit reports within 30-45 days of a dispute being received. If the dispute is ignored or mishandled, it can take longer.
Yes. With sufficient evidence to support a dispute, fraudulent accounts can be removed from a credit report.
Generally, yes. While the police may not always be able to investigate and pursue criminal charges, filing a police report creates a record and supports your position that the accounts, transactions, and activities were not authorized by you.
No. You do not need an identity theft lawyer to recover from identity theft. However, working with an identity theft lawyer can bring greater ease and peace of mind throughout the process and lead to optimal outcomes, including corrections and compensation.
Yes. If you dispute identity theft errors and your dispute is ignored or mishandled, or you suffer harm as a result, you may have grounds to sue for corrections and compensation.
If you choose an identity theft lawyer who offers free consultations and works under the fee-shifting provisions of the FCRA and other laws, then you will not pay anything upfront or out of pocket. If you work with a lawyer who charges an hourly or fixed rate, fees will apply.
Yes. Credit reporting errors caused by identity theft can negatively impact employment, housing, insurance, and other opportunities by creating a false impression of your financial profile, repayment habits, and overall creditworthiness.
If you’ve been victimized by identity theft, get a FREE consultation. You pay $0 out of pocket. We only get paid when we win. No Justice, No Fee™