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Identify theft is becoming a very real concern for many of us. Initially little could be done after the fact to restore your name and police officers did nothing, because there were no laws in place to protect consumers. Legislators enacted laws to assist consumers to restore their good names and to expedite the investigations by way of the creditor.


This type of crime continues and is increasing and this means more and more people’s credit is at risk. This complicates every day life in that an individual may have trouble obtaining a job, getting phone service, buying a cell phone, renting, buying a car, renting a car and many other everyday transactions. Identity theft complicated things and hurts a consumer’s credit until the mess is cleared up which often can take two years. This could mean higher rates for mortgages and loans and any other type of credit, especially when the consumer does not have a choice and cannot wait a few months or a couple of years. In effect a person may lose his good credit for up to two years. There are many statutes intended to protect consumers, but often these statutes are not enough.


Despite these statutes designed to assist the consumer to restore his or her good name and to expedite resolution, when a person’s identity is stolen the victim is still confronted with a very serious problem. The statutes specify what the consumer needs to do and if the consumer does not follow the rules to the letter, the creditor can continue its efforts to collect on debts not owed by the consumer. One of the worst things about identity theft is that often the debts are too small such that it is not worthwhile to hire an attorney, but at the same time the debt is too big for the consumer to absorb.


Some creditors quickly investigate and are able to determine whether or not the debts where in fact incurred by the consumer or if someone else used the consumers identifying information to obtain credit. Some creditors go the opposite way and exploit the fact that the consumer cannot afford to hire an attorney and fight a smaller debt. These creditors often file a lawsuit relatively quickly and then seek to settle the claim for a fraction and if the consumer does not accept they seek a judgment. These creditors in effect are essentially victimizing the consumer twice.


There is no magic number as to what attorneys charge, but generally speaking attorneys routinely seek retainers of $2,000-$3,000 and when the claim is for $3,000, it makes little economic sense for the consumer to hire an attorney. California and probably many other states have statutes that are designed to turn the tables on the creditor when the creditor fails to investigate incidents of identity theft. In these cases the consumer is required to follow certain steps and request certain things from the creditor. The creditor then has to investigate and respond within 30 days.


If the creditor does not have a good basis to pursue the claim, the creditor most not make any further efforts to collect on a debt. If the creditor decides to pursue the claim and files a lawsuit the consumer can then prove his identifying information was used without authorization and may be able to obtain not only attorney fees, but also an additional award for money damages.


The intent of these identify theft statutes is good, but consumers must still come up with a lot of money to fight these claims and more often than not the claim will not result in any advantage to the consumer. Collection efforts may stop and the lawsuit dropped, but the consumer will still be out of pocket for attorney fees and court costs.


All these protective statutes have a good intent to protect the consumer, but generally speaking they afford little protection when the consumer does not know precisely what the consumer needs to do. Even though each situation is different the first thing a consumer should do is file a police report where the consumer resides. The consumer should then contact the three major collection bureaus and place restrictions on who can access the consumer’s credit or if at all.


The consumer should then contact the creditors directly in writing, preferably by certified return receipt or some sort of proof of delivery. If the creditors refuse to investigate or fail to investigate, or continue collection efforts, then the consumer should consult with an attorney. There is no one perfect way to go about restoring a consumer’s good name, but delay or doing nothing is the worst way to go about it.

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