SCHLANGER LAW GROUP

Chapter 1: Understanding Identity Theft and Credit Reporting Errors

What is Identity Theft?

Identity theft happens when someone steals your personal information—like your Social Security number, name, or debit and credit card numbers—and uses it without your permission. They might open new credit card accounts, run up debts on existing credit cards, take out loans or drain your bank account. This fraudulent activity often leads to a significant drop in your credit score and can cause immense financial and emotional distress.

Modern Threats: AI-Powered Identity Theft

• •Voice Cloning: Scammers can use a small sample of your voice from social media to create a clone, which they can use to authorize transactions or trick your family members.
• •Deepfakes: Criminals combine voice cloning with AI-generated video to impersonate you in what is known as ‘identity hijacking’.
• •Synthetic Identity Theft: This complex fraud involves combining real information (like a stolen Social Security number) with fabricated details to create a brand new, fake identity.

Common Types of Credit Report Errors

• •Accounts that aren’t yours: A major red flag for identity theft.
• •Incorrect personal information: Wrong name, address, or Social Security number.
• •Duplicate accounts: The same debt listed more than once.
• •Outdated negative information: Items that should have disappeared from your report.
• •Mixed files: Information from another person on your report.

Financial Abuse by Family Members and Partners

A significant portion of identity theft and unauthorized charge cases involve people close to the victim: domestic partners, ex-spouses, and family members. These individuals often have access to your mail, devices, personal identifying information, usernames and passwords—making them particularly dangerous. Victims are often reluctant to report this type of fraud, but it’s important to know that the same legal protections apply. In fact, several states (including New York) have Coerced Debt statutes that provide additional protections in these situations (see Chapter 9).

Chapter 2: Your Immediate Action Plan: The First 72 Hours

Chapter 3: Fixing Damage To Your Credit – How to Dispute Credit Reporting Errors

Once you’ve identified errors, you need to formally dispute them. Calling is a good start but leaves you vulnerable. To protect your rights and document your dispute, we strongly advise consumers to always follow up promptly in writing.

Step 1: Dispute with the Credit Bureaus

While there is no legal requirement that your dispute be in writing or sent by certified mail, we strongly recommend sending a dispute letter via certified mail with a return receipt requested. This creates a clear paper trail that can be invaluable if litigation becomes necessary.

Your letter should include:

• Your full name and address.
• A copy of your credit report with errors highlighted.
• A clear explanation of each disputed item.
• A request for removal or correction.
• Copies of supporting documents (see below).
• Proof of identity (copy of driver’s license & Social Security card).
• Proof of address (copy of a utility bill).

Always keep copies of everything you send, as well as proof that you sent it and that it was received.

Step 2: Dispute with The Creditor (The “Furnisher”)

While disputing with the credit bureaus is essential, it’s also a good idea to send a copy of your dispute letter directly to the company that furnished the incorrect information.

However, it’s important to understand a critical distinction: sending a dispute directly to the furnisher does not trigger the FCRA’s most relevant protections. To get the full benefit of the FCRA dispute process, you must dispute through the credit bureau.

Supporting Documentation to Consider Including

• Police Report: Creates an official record of the fraud.
• FTC Identity Theft Report: From IdentityTheft.gov.
• Consumer Affidavit: A sworn statement describing the fraud.
• Proof of Payment: If disputing that you already paid a debt.
• Proof of Location: If charges were made when you were elsewhere.

Chapter 4: Know Your Rights: The Fair Credit Reporting Act (FCRA)

We’ve discussed how to submit a valid FCRA dispute. Now let’s turn to your rights under the FCRA—particularly when your dispute doesn’t resolve the issue.

Right to Reasonable Accuracy Procedures

The FCRA does not guarantee you a perfectly accurate credit report. Instead, it requires credit bureaus to implement policies and procedures that are “reasonably designed to assure maximum possible accuracy” of the information they report.

Right to Dispute

You have the right to dispute any information on your credit report that you believe is inaccurate or incomplete. Once you submit a dispute, the credit bureau must conduct a “reasonable investigation.”

FCRA Remedies: What You Can Recover

If a credit bureau or furnisher violates the FCRA, you may be entitled to:

• For Negligent Violations: Actual damages, plus attorney’s fees and costs.
• For Willful Violations: Actual damages OR statutory damages ($100-$1,000), PLUS punitive damages, plus attorney’s fees and costs.

Chapter 5: Protecting Your Bank Account: The Electronic Fund Transfer Act (EFTA)

While the FCRA protects your credit report, the EFTA protects the actual money in your bank account from fraudulent electronic transfers.

Understanding the EFTA Liability Timeline

Your potential liability for unauthorized debit card or electronic fund transfers depends on how quickly you report.

The Rules Explained

• Report within 2 business days of learning your card is lost or stolen: Your maximum loss is $50.
• Report after 2 business days, but within 60 days: Your maximum loss can be up to $500.
• Report after 60 days: You could potentially face liability for unauthorized transfers that occur after the 60-day period.

EFTA Remedies

If a financial institution violates the EFTA, you may recover:

• Actual damages (the money you lost)
• Statutory damages ($100-$1,000 per violation)
• Attorney’s fees and costs
• Treble damages (three times actual damages) for certain violations

Chapter 6: Protecting Your Credit Card: The Fair Credit Billing Act and TILA § 1643

If fraudulent charges appear on your credit card (not your debit card), different laws apply: the Fair Credit Billing Act (FCBA) and the Truth in Lending Act (TILA) § 1643.

Your Maximum Liability: $50

Under TILA § 1643, your liability for unauthorized credit card use is capped at $50—period. There’s no tiered system based on how quickly you report like with debit cards.

The Fair Credit Billing Act: Disputing Billing Errors

Your dispute must:

• Be sent within 60 days of the statement date
• Be sent in writing to the address specified for billing inquiries
• Include your name and account number
• Indicate your belief that the statement contains a billing error

FCBA and TILA Remedies

If a credit card issuer violates these laws, you may recover:

• Actual damages
• Statutory damages: Up to twice the finance charge ($500 min, $5,000 max)
• Attorney’s fees and costs

Chapter 7: Payment App Fraud: Zelle, Venmo, CashApp, and More

Person-to-person (P2P) payment platforms have become hugely popular—and so has fraud targeting their users.

The “Authorized Push Payment” Problem

One of the most common scams involves tricking you into sending money yourself. Banks often deny these claims, arguing that because you initiated the transfer, it was “authorized.”

However, if a thief obtained your login credentials through fraud, transfers they initiate are still unauthorized under the EFTA.

If You’re a Victim of P2P Fraud

1. Report immediately to both the payment platform AND your linked bank
2. Document everything—screenshots, transaction records, communications
3. File a police report
4. Submit written disputes to both the platform and your bank
5. File complaints with the CFPB and FTC

Chapter 8: When Debt Collectors Come Calling: The FDCPA

If an identity thief opened accounts in your name, you may eventually hear from debt collectors trying to collect debts you don’t owe.

Your Right to Dispute the Debt

Under the FDCPA, a consumer who disputes within 30 days of receiving an initial collection notice receives important procedural protections: the collector must stop collection efforts and verify the debt before resuming.

Prohibited Conduct Under the FDCPA

Debt collectors are prohibited from:

• False representations: Misrepresenting the character, amount, or legal status of a debt
• Deceptive practices: Using any false representation or deceptive means
• Threatening illegal action: Threatening to take any action that cannot legally be taken
• Harassment: Using threats of violence, obscene language, or repeatedly calling to annoy

FDCPA Remedies

• Actual damages you suffered as a result of the violation
• Statutory damages up to $1,000 per case
• Attorney’s fees and costs

Chapter 9: State Law Protections

In addition to federal protections, many states have enacted their own consumer protection laws that can provide additional remedies.

State UDAP Statutes

Every state has some form of Unfair and Deceptive Acts and Practices (UDAP) statute. Many state UDAP statutes provide for:

• Actual damages
• Statutory or minimum damages
• Treble (triple) damages for willful violations
• Attorney’s fees and costs

Special Protections for Seniors

Many states have enacted enhanced protections for elderly consumers, recognizing that seniors are disproportionately targeted by scammers.

Chapter 10: When You Need a Professional

If your dispute is unreasonably rejected or ignored, you should contact a lawyer with deep expertise in this specific field.

Consider consulting a lawyer if:

• Your dispute with a bank, payment platform, credit card company, or credit bureau is wrongfully denied.
• Credit bureaus or your bank ignore your disputes entirely.
• A debt collector is harassing you for a debt that isn’t yours.
• You’ve suffered significant financial harm.
• Substantial amounts have been stolen or charged to your accounts.

How Fee-Shifting Works

Congress designed consumer protection statutes with “fee-shifting” provisions. This means that when consumers prevail, the defendant—not the consumer—pays the consumer’s attorney’s fees.

Glossary of Legal Terms