5 steps to dispute debt caused by ID theft, stop abusive collection


Speaking of Credit
Speaking of Credit columnist Barry Paperno
Barry Paperno is a freelance writer and credit scoring expert with decades of consumer credit industry experience, serving as consumer affairs manager for FICO (formerly Fair Isaac Corp.) and consumer operations manager for Experian. He writes "Speaking of Credit," a weekly reader Q&A column about credit scoring and rebuilding credit, for His writings about credit scoring have appeared in The Huffington Post, MSN Money, CBS Money Watch and other consumer finance websites.
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Question for the expert

Dear Speaking of Credit,
My mother divorced my father several years ago. He passed away last year. Last week we received a phone call out of the blue stating that she is going to be served with papers and needs to be home between certain hours to sign for them. We had no idea what it was about. I called the number given and they gave me info that she had outstanding credit card debt. I was worried this was the issue because my father had opened many accounts in her name that she did not know about. She has never knowingly opened a credit card account herself. According to the company, the account was opened on May 17, 2007, and closed in 2010.

They told me on the phone that she needed to appear in court one-and-a-half weeks from the time that I was talking to them. I told them it wasn't her debt, that my father had opened cards in her name. They tried to get me to pay money, I said no. We were never served that day. Four days later I was told that we were going to be served between certain hours. Again, no one ever came.

This is all new to me. Do I have to keep sitting at home waiting to be served? They were pretty intimidating, saying we were going to have to pay money every time someone came out to serve us. They said they had tried two other addresses. One was bogus and the other was a place she hasn't lived in three years. I think the debt is time-barred. The company was Chase. She lived in New Hampshire, which has a three-year statute of limitations. But now she lives in Massachusetts, which has a six-year statute of limitations. What do I do?   -- Rebecca

Answer for the expert

Dear Rebecca,
No matter what scare tactics the collection agency tries to impose on you and your mother, she is not responsible for the fraudulent debt incurred in her name by your late father. As long as your mother follows the proper fraud procedures with Chase, you should be able to get the collection agency off of your back and clear her credit reports of any derogatory information resulting from this theft of her identity.

The first piece of advice I'm going to offer is, for now, avoid talking to any collection agency representative on the phone, making any arrangements with them or paying anything on this debt. Though your mother should not be held responsible, there will be some work to do, as there are at least five important steps to take before this matter can be begin to be resolved:

1.  The process begins with you and your mother filing a 90-day fraud alert with the three national credit bureaus: Equifax, Experian and TransUnion. Doing so will a) instruct potential creditors accessing your credit report to contact your mother directly before extending any new credit in her name, and b) provide a free credit report from each credit bureau, so you both can review her entire credit picture to determine the extent of the damage and dispute any negative information reflecting fraudulent activity.

While the main function of a fraud alert is typically to stop any unauthorized activity, the fact that the person who committed the fraud is now deceased eliminates that particular concern. For you, the advantage of the fraud alert will be to officially document the situation with the credit bureaus and obtain the free credit reports, which will enable you and your mother to check for any additional fraudulent accounts and start the dispute process (No. 4 below).

2.  Create an identity theft report at both the FTC (online) and your mother's local police department. These reports may be required by the creditor, collection agency or credit bureau to complete the fraud process and eliminate your mother's responsibility for the debt.

3.  Call the Chase fraud department and any other creditors that may have also appeared on her credit reports, advising that these charges in your mother's name were not authorized by her. Also, be sure to request that they remove any derogatory information from her credit reports and that they instruct any collection agencies to which the debt has been assigned to immediately refrain from any further collection activities. Your mother may have to provide proof of the divorce, as well as the police identity theft report, to show that she was not married to your father at the time of the account opening and fraudulent activity.

4.  Once you and your mother have reviewed her three credit reports, she will want to carefully follow the credit bureaus' instructions for disputing the Chase balance and any other unauthorized accounts, which may include providing documentation from Chase and the identity theft police reports. Additionally, to prevent the chance of future abuse, she should close any open credit accounts she doesn't use.

5.  Write to the collection agency explaining the situation and, as with the credit bureau disputes, providing any documentation that will help support your mother's case. Any communication with collection agencies should always be in writing and sent via certified mail with return receipt requested. Under no circumstances should you or your mother speak with a collection agency representative, either by phone or in person.

Taking these actions should have you and your mother well on your way toward putting this most unfortunate experience behind you. I wish you and your mother the best of luck!

See related: Familiar fraud: When family and friends steal your identity, Feds fine Chase, order $309 million refund, Mom illegally adds daughter to joint card

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Published: November 13, 2014

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Updated: 10-26-2016

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