Identity Theft & Fraudulent Accounts 

What this is

Identity theft occurs when someone uses your personal information - name, Social Security number, date of birth, or address - to open new accounts, take over existing accounts, create a synthetic identity, or obtain credit or services in your name without your authorization.

Why it hurts your credit

Fraudulent accounts report late payments, charge-offs, and collections - none of which you caused. Every derogatory mark tanks your score and can haunt you for years unless properly removed. Without the right dispute strategy, bureaus often return identity-theft disputes as "verified," leaving the fraud on your file.

The 4-business-day block - FCRA § 605B

If you have an FTC Identity Theft Report, you can request a block of fraudulent information under FCRA § 605B. The bureau must block the item within four business days of receiving your complete request - not the standard 30-day reinvestigation timeline. This is the most powerful identity-theft remedy in the law.

What your dispute letter must say

Your letter must identify the fraudulent account, state that you never opened or authorized it, request a block under § 605B (if you have an FTC report), and ask the bureau to notify the furnisher. Attach your FTC Identity Theft Report and proof of identity.

If the fraud keeps coming back

Reinserted items - fraud that was removed and reappears - are a separate violation. The bureau must notify you before reinserting and must have certified accuracy from the furnisher. If a removed item comes back without that process, it's an independent FCRA violation.

Getting the thief's application under section 609(e)

Most consumers never learn this right exists. Once you provide a business with an Identity Theft Report and proof of your identity, the FCRA entitles you to copies of the application and business transaction records the thief submitted in your name, at no charge, generally within 30 days. That means the signed application, the identification used, the transaction records and the address the thief supplied. Those documents do two things. They frequently show on their face that the signature and identifiers were not yours, which makes the dispute much harder to brush aside, and they occasionally identify the person who did it. Send the request to the creditor in writing and keep the certified mail record.

When a blocked account comes back or was never blocked

Section 605B requires a bureau to block fraudulent information within four business days of receiving your Identity Theft Report, proof of identity and identification of the specific information. A bureau may decline or rescind a block in narrow circumstances, but it must notify you when it does. Two failures are common and both matter: the block never happens within the statutory window, or the account is blocked and then quietly reappears because the furnisher kept reporting it. Track the four-business-day clock from your return receipt, pull all three reports 30 and 90 days later, and keep every notice. Those dates are the case.

Why you should not pay the fraudulent debt

Paying or settling an account you did not open can undercut the claim that it was never yours, and collectors sometimes suggest a small payment to make the problem go away. It does not make it go away. A payment can restart aging on the tradeline, can be treated as an acknowledgment of the debt, and gives the furnisher a reason to keep reporting. If a collector is pressuring you, send the written identity theft notice with your Identity Theft Report instead. Under the FCRA, a collector that receives that notice may not sell or transfer the debt and must notify the original creditor that the information may be fraudulent.

Your key rights

• 4-business-day block under FCRA § 605B when FTC Identity Theft Report is provided
• Free copies of fraudulent applications and records under FCRA § 609(e)
• Bureau must notify the furnisher of the block
• Bureau must not re-report blocked information without your consent
• FCRA violations entitle you to actual damages - lost credit, damaged reputation, time wasted, emotional distress - plus punitive damages; the losing defendant pays your attorneys' fees. Results depend on the facts of each case.

Common questions

How fast must the bureau block fraudulent accounts?

Four business days from receiving your Identity Theft Report, proof of your identity, and identification of the specific information to block. That is much faster than the ordinary 30-day dispute timeline, which is why assembling a proper Identity Theft Report first is worth the extra effort.

Can I get the application the thief filled out?

Yes. Once you give the business an Identity Theft Report and proof of identity, the FCRA entitles you to copies of the application and transaction records submitted in your name, free, generally within 30 days. Those documents often show on their face that the signature and identifiers were not yours.

Should I just pay a small fraudulent account to make it go away?

No. Paying can be treated as acknowledging the debt, can restart aging on the tradeline, and gives the furnisher a reason to keep reporting it. Send the written identity theft notice with your Identity Theft Report instead. A collector who receives it may not sell or transfer the debt and must notify the original creditor that the information may be fraudulent.