Using someone else’s name, address or any other personal details in the effort to be someone else and engage in unauthorised activities is fraudulent and known as identity theft.
Some examples include:
- Using someone else’s credit card to make unauthorised purchases on or offline
- Using someone else’s identification to find out more private information (financial or otherwise) about that person
- Pretending to be someone else and conducting business with the motive to make a financial gain at that person’s expense.
The Wallis Consulting Group reported in 2007 that every year, one in ten Australians are affected by identity theft. (source: "Identity fraud and theft in Australia" Crime facts info no. 164, ISSN 1445-7288 Canberra: Australian Institute of Criminology, February 2008)
Fair debt collection is should be practiced by all debt collectors. So how should a victim deal with a debt collector if they are accused of owing a debt as a result of identity theft?
Debt Collectors are Ruthless
Debt collectors chase hard with the full force of the law behind them.
There are few places to turn to in the financial system, but fortunately, most countries have a financial ombudsman and financial institutions have intelligence departments for dealing with fraud cases, so report the incident to the financial institution immediately. Quite often, victims have no other business with the financial institutions who originally incurred the debt.
Both the finanical ombudsman and the financial institution should be contacted and do not provide the debt collector with any information even if asked. Consumers have rights.
Consumers’ Rights,Identity Theft and Debt Collectors
Consumers have rights when it comes to dealing with debt collectors. So until the fraud investigation confirms that this case is actually identity theft, debt collectors may continue to keep chasing the victim. Consumers and identity theft victims should be wary of telling the debt collectors any further information which may incriminate them.
In Australia, the Australian Securities and Investments Commission (ASIC) outline the following guidelines when dealing with debt collectors:
1. Debt collectors should contact consumers no more than three times per week either by phone or letter only and no more than 10 contacts per month.
2. Any contact outside the hours 7:30am-9pm on weekdays and 9am-9pm on weekends is unacceptable.
3. Personal visits by debt collectors at home, at work or any other location should only occur if the debt collector is unable to communicate with the consumer or if the consumer agrees to a visit. Face to face is unnecessary as most arrangements can be made over the phone or by letter. If visits are necessary, they should occur only once per fortnight at an agreed time between the hours of 9am and 9pm.
4. Keep a record of all contact made with the debt collector including the name of person who made contact, dates, times, type of communication, what was said.
5. When disputing a debt, a notice of default should not be made on a consumer’s credit report until the debt is confirmed to belong to that consumer. Consumers should obtain a copy of their credit report.
6. Consumers and victims should request copies of all account information and contracts in their name and have a right to this by law. The debt collector should be prepared to provide all this.
7. Do not provide any additional information to a debt collector that they do not already have. In other words, consumers should not confirm any identification details if that debt is not theirs and should not provide dates of birth, addresses or any other piece of information just because the debt collector asks for it.
8. Finally, get some legal advice, particularly if proceedings are being taken to court by receipt of a summons or statement of claim. Unfortunately, the victims may have to outlay some funds to clear their name, but this outlay should be substantially smaller than the outstanding debt tarnishing their reputation.
Get a Credit Report ASAP
Consumers should get an updated credit report from a credit agency as soon as possible. These are easy to obtain online for a small fee. The financial ombudsman of each country should be able to provide details of reputable credit agencies. A credit report is required to ensure that no other outstanding debts have been applied to the report without the knowledge of the consumer.
Consumers should take as many precautionary steps as possible to prevent identity theft.
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