Myths and Realities

MYTH 1: Banks and credit card companies will tell you that they are the real victims of identity theft–they will be responsible for the damages suffered.

REALITY: You are responsible for cleaning up the mess–yourself –and that can take years! You are the one who must prove that you didn’t make the purchases under dispute. Victims of identity theft often spend years and thousands of dollars clearing their names and cleaning up their credit. They may lose job opportunities, be refused loans for education, housing, or cars, and even get arrested for crimes that are committed under their names.

MYTH 2: Credit monitoring services are proactive in helping to prevent identity theft.

REALITY: No, credit monitoring is reactive–it sometimes alerts you to problems after the damage has been done. If a thief opens a new account in your name, that creditor may not report it to the bureaus right away and credit reports are not in real time so erroneously reported credit data can go undetected for some time.

MYTH 3: I have a high credit score and pay my bills on time. I don’t need to review my credit reports.

REALITY: Credit reports are notoriously contaminated with dirty data–data that is used to calculate your credit score. These scores determine your credit worthiness, the interest rates you will pay on loans and the amount you will pay for auto and homeowners insurance. The recipe used to determine your credit score is based on the contents of your credit report, whether accurate or not. Your credit report can indicate that you did not pay your bills on time or it may include a myriad of mistakes of which you weren’t even aware. These credit reporting errors may include: having someone else’s data mixed with yours, closed accounts that don’t belong to you, ancient debts that were paid but are reportedly still owed, erroneous 30, 60 or 90 day late payments that were actually paid on time, or debts belonging to an ex-spouse, relative or someone other than you!

MYTH 4: Foreclosures only happen when you don’t pay your mortgage payments.

REALITY: Even when you pay your mortgage on time, there is no guarantee that you’ll be safe from foreclosure and no guarantee that the payments you made to the original lender were in fact transferred properly to the new mortgage company. People who have blindly sent their mortgage payments without the aid of a monthly statement to confirm these transactions can suddenly find themselves facing enormous penalties, forced foreclosures and years of battles trying to prove they paid on time.

MYTH 5: It doesn’t matter where you get your free credit reports. If it says “Free” it’s free.

REALITY: It does matter. Don’t believe everything you see and hear on TV. In many cases, consumers who sign up for these “free” reports often don’t realize that they are also signing up for a credit bureau’s credit monitoring services. The automated toll free number and website to order your officially mandated free credit reports is 877-322-8228 and annualcreditreport.com. There are website domains that appear to be authentic, but in reality are imposter sites. A study by The World Privacy Forum study stresses the importance of requesting copies by telephone as opposed to using websites. Their report “Call Don’t Click: Why It’s Smarter to Order a Federally Mandated Credit Report via Phone Instead of the Internet,” documents at least 96 known “imposter” domains and reports that consumers end up unintentionally waiving rights and ordering credit monitoring services. If you mistype the URL in your browser, you will be taken to an impostor site.Read the full report here. [link www.privacyrights.org] And for a closer look at the not-so-free credit reports advertised on TV, read the article, “Marketer of ‘Free Credit Reports’ Settles FTC Charges.” [link www.ftc.gov]

MYTH 6: Lenders, creditors and mortgage servicing companies have procedures in place to deter fraud and ensure the accuracy of their accounting calculations. Our payments must me correct and our accounts error and fraud free.

REALITY:

MYTH 7: If you are notified that you owe money for an old medical bill that was recently placed in collection, then you must be responsible for paying for it. And if I don’t owe it, it’s still best to pay it to make it go away.

REALITY: Not true. Why? Because sometimes old “zombie” debts are bought for pennies on the dollar by collection agencies even though they were once paid, and these debts can eventually end up on a consumer’s credit report, without their knowledge. It can be many years old and suddenly appear out of nowhere. Do not pay a bill that you have no knowledge of simply to make it go away because it can come back to haunt your credit report! Instead, contact the company that claims you owe money and ask them to verify the debt. If it’s a medical debt, find out the date of service and call your insurance company to find out if they paid this debt and determine if this is a medical identity theft, and/or debt you don’t owe.

MYTH 8: If I can’t fix my credit problems caused by someone else’s error, I can turn to the courts to hold them accountable.

REALITY: Not always! You may have waived your rights without knowing it. Binding Mandatory Arbitration clauses are finding their way into countless contracts (including credit card agreements) which means if you have a problem, you can’t sue them. You must settle your disputes in arbitration and the arbitrator’s decision is final. If you signed any agreement or contract that carries a binding arbitration clause, you gave away your constitutional right to use the American court system to solve a disagreement, no matter how important the disagreement. (See Binding Arbitration)

MYTH 9: Since I don’t know any experienced consumer attorneys in my area, I will have to handle my own legal case myself or hire someone that isn’t experienced.

REALITY: Because the consumer protection laws are Federal laws, you can search for an experienced attorney nationwide. He or she doesn’t have to reside in your area. If you have documented your case and/or want an opinion as to whether or not your situation requires legal representation, this website link www.NACA.net is a great starting point. An attorney who chooses to take on your case often takes it on a contingency basis, which means they only get paid when and if you do. Additionally, they can hire an attorney licensed in your state to assist them in your area.

MYTH 10: The credit bureaus are doing the best they can to prevent their product from causing harm to innocent consumers.

REALITY: NOT! See: Top 10 Things you will never hear from the credit bureaus.