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Most people who are sued in debt collection cases acknowledge that they had an account and owed money to a creditor, and stopped paying on the debt.  Lawsuits may be filed by the original creditor or by a debt buyer that claims to own title to the debt.  But sometimes a consumer is completely surprised and puzzled by the lawsuit, because he never incurred the debt.  In many of those cases, identity theft is involved.  Other cases may result from mistaken identity (such as when two people have the same or similar names).

Identity theft is a crime that has been recognized by governments and creditors for decades.  Effective systems have been put into place to help victims.  With respect to consumer credit and debt issues, the most common forms of identity theft are:

  • fraudulent charges are made to an existing account
  • new accounts are opened using the consumer’s name and other personal information

In most cases, the victim must take several steps on his own to notify creditors, credit rating agencies and law enforcement officials.  Once these steps are completed, the victim can begin to recover his credit standing and peace of mind.

Step One – Initial Fraud Alert

At the first notice that a fraudulent debt was incurred, the consumer should notify one of the three major credit reporting agencies (CRA) and ask that a an Initial Fraud Alert be place on the consumer’s credit file.  The CRA that is contacted will then notify the other two CRAs who will also place a fraud alert on the consumer’s file.

The three CRAs are:




Step Two – Review Credit Reports

After the Initial Fraud Alert has been activated, the consumer should receive a confirmation notices with information about how to obtain a free credit report from each CRA.  He should then proceed to obtain one credit report from each CRA, and review them carefully to identify any fraudulent charges or accounts.

If the fraud consists of charges made on an existing account, the consumer should contact that creditor immediately.  In some cases, charges can be removed by simply following that creditor’s fraud reporting procedures.

Step Three – Identity Theft Affidavit

The Federal Trade Commission (FTC) publishes a standard 6-page document called the “Identity Theft Victim’s Complaint and Affidavit” which can be found at

The victim should complete this document completely and sign it in the presence of a witness or a notary.

Step Four – Police Report and/or Identity Theft Report

Using the completed Identity Theft Affidavit and other supporting evidence, the victim then makes a report to a local law enforcement office.  Most police departments have established procedures.  Sometimes a police officer will obtain further information and conduct an investigation; in other cases, the victim’s Identity Theft Affidavit is simply attached to an incident report and filed.  The police report may be called an Identity Theft Report.

The victim may now obtain a copy of the police report or Identity Theft Report.

Step Five – Contact Creditors

At this point, the victim should make a phone call to each creditor that has reported a fraudulent charge or account.  All major banks and credit card companies have fraud departments.  Become familiar with each creditor’s procedures.  Some creditors accept the FTC Identity Theft Affidavit, while others require a different document.  Creditors may ask for various types of evidence to support the claim that the victim is not responsible for the charges or opening of the account, but sometimes a sworn statement is all that can be provided.

Step Six – Dispute Letters

Because telephone calls are not always effective, the identity theft victim should follow up telephone calls with written dispute letters to each creditor that has reported a fraudulent charge or account.  The letter should state that the victim did not make the charge(s) or open the account(s), and attach the completed Identity Theft Affidavit and the police report or Identity Theft Report.

Step Seven – Resolve Credit Reporting Issues

After allowing for sufficient time for creditors to process the reports, the victim should then order a new set of credit reports from the three CRAs.   If information about the fraudulent charges or accounts still appears, the victim should follow the CRAs procedures for disputing the incorrect information.  If the CRA has been given notice of fraud, and continues to list incorrect information, the CRA may be liable for damages under the federal Fair Credit Reporting Act.

Finally, if you were sued for a debt that is the result of identity theft, contact an attorney immediately to get advice regarding the lawsuit.  If you have reported identity theft to creditors and credit reporting agencies but the problem does not get resolved, contact an attorney that handles Fair Credit Reporting Act cases.


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