News & Resources

Using credit reports and recognizing victims of identity theft

Jan 24, 2012 Karen Umpierre

Identity theft is one of the leading problems the Federal Trade Commission deals with on a yearly basis. With the use of a social security card, driver's license or bank account details, a criminal or hacker can write stolen checks, open fraudulent credit card or banking accounts and ultimately cost both the consumer and financial institution thousands of dollars. According to the FTC, during 2010, more than $345 million was lost due through fraudulent transactions, including debit cards, cash advances, checks, credit cards, money orders, telephone bills and wire transfers. Although the losses were over $100 million less than the previous year, it remains a concern for all financial institutions and debt collection agencies. Spotting a fraudulent acquisition of funds or transfer can be difficult, but with the use of a credit report and knowledge of a consumer's financial habits, you can make a proper assessment. For instance, if a consumer regularly transfers a sum of money to a friend or relative on a scheduled basis, but one specific day it so happens that a random transfer was made to an unknown party, this may be reason to raise suspicion. One phone call could resolve the issue. Contact the consumer immediately and notify them that your agency found strange activity linked to the account. The consumer may inform you they did, in fact, make that transfer. However, if they claim to have no clue about that transfer, you may need to put a hold on the account and investigate the issue further.  For a short-term financing solutions agency, you may want to keep a keen eye out for consumers that have recently been affected by identity theft. If a consumer was a victim of identity theft once, it's not out of the realm of possibility that it could happen again. While some consumers are victims at random, others may be targeted by schemes after giving out personal information to untrustworthy institutions. Always use credit reports to your advantage when dealing with a consumer, as their history may give you a good idea of what future payments you can expect from them. In addition, be wary of those affected recently by identity theft, as their information may still be out in the public somewhere, even if the original identity thief was arraigned.