Identity Theft Still Plaguing Millions on Accounts, Credit Standing

When you’re trying to keep your credit card accounts in order, there’s probably a lot of details you’ll have to keep a close eye on to make sure everything is going as well as it possibly could be. That includes making sure you haven’t been affected by identity theft.

While consumers tend to have a number of worries about their credit card accounts in general, many related to the way the account costs them money in any given month, identity theft and other types of fraud still weigh heavily on the minds of many, according to the most recent data published by the Consumer Financial Protection Bureau. While billing disputes — that is, information listed on borrowers’ monthly statements about what they owe that they feel is not accurate — and the amount they pay in interest remain the two largest concerns borrowers tended to have, fraud wasn’t far behind.

The risk of suffering from billing disputes and identity theft can actually be mitigated in much the same way: Vigilance. Essentially, there is nothing that qualitatively separates an item which a consumer believes is not accurate, and thus needs to be disputed, from a fraudulent purchase. In both cases, they will have to be spotted in a timely manner and then have the concern brought to the lender which controls the account in the first place. Further, both types of disputes will usually need to come with some sort of proof that the borrower is not responsible for the transaction in question. In fact, any one purchase of this type may not even be discernable as being an erroneous charge or a sign of identity theft.

What’s the difference, then?

Questionable transactions that are placed on your credit card statement at the end of any given month by the lender, rather than through identity theft, may be one-time incidents that can be cleared up with relative ease and not dealt with again.

Identity theft or fraud, on the other hand, is likely symptomatic of a far larger problem. For instance, one questionable item on your bill can be either of these types of listings, but more than one is usually a pretty sure sign that your credit card information has somehow been stolen. There are many ways this can happen, and usually you won’t even be able to determine how it did so, but the reaction you have to such a discovery should always be the same. You will need to immediately report the issues to your lender so that the bogus purchases can be stricken from your record, and the card itself can be canceled.

Again, though, you will need to keep a close eye on your accounts to ensure that you’re not being affected by this kind of crime. Because it’s easy to spot a credit card balance that’s thousands of dollars more than you expect it to be, many thieves are getting smarter, and making a small number of relatively minor purchases — $50 here, $100 there — so that you don’t spot the problem. Therefore, going over your statement closely each month is vital to ensuring you’re not ripped off in this way.

Other potentially serious issues

Of course, another type of fraud that can be even more insidious is when someone gets a hold of your personal data — name, date of birth, Social Security number, etc. — and uses that to open an account you don’t even know about. This, like the above type of fraud, can significantly diminish your credit score through higher “debt utilization,” which is the percentage of your credit limits you use at any given time, and makes up 30 percent of your score.

However, it can lead to a number of other problems because the thief is unlikely to bother paying the bills he or she racks up, meaning that you’ll have multiple missed payments and other such issues to deal with, and those too will drag down your score significantly.

The problem with these bogus cards, too, is that you’ll usually have no way of knowing about them (since crooks are unlikely to tip you off by using your home address as the billing address) unless you order a copy of your credit report and actually spot the fraudulent account. At that point, you’ll need to report the issue to the lender in question, as well as the three major credit reporting bureaus, to ensure that it won’t start to damage your scores any more than it already has.

Regularly checking your credit reports can be a big help all around, though, as doing so may help you to discover other types of unfair markings as well. If these entries are plaguing your standing, contacting a credit repair company about the issues may help you to get them cleared up as quickly as possible.

Posted in Identity Theft
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