By going directly to payday lenders, identity thieves know they can evade consumer protections
Walnut Creek, California (PRWEB) January 31, 2013
The Identity Theft Council is warning of a troubling increase in the exploitation of payday lending loopholes by identity thieves. According to the Council, because many payday lenders don’t run credit checks with the three main consumer credit bureaus – Equifax, Experian, and Transunion – before granting credit, identity thieves are increasingly turning to these lenders to bypass the few security precautions available to consumers to protect themselves.
“I would estimate that more than a third of the identity theft cases we’ve worked on in the last six months have involved payday lenders,” according to Neal O’Farrell, founder and Executive Director of the Identity Theft Council. “It’s a triple whammy for victims. Not only do they have to fight a potentially serious case of identity theft, one that can last for months and even years, they’re often also faced with endless harassment and intimidation from unscrupulous payday lenders who deliberately ignore consumer rights. And those same lenders often refuse to cooperate with the credit bureaus to remove fraudulent or incorrect information from the victim’s credit report.”
While consumers can use fraud alerts, credit monitoring, and security freezes to help protect themselves against the most serious types of identity theft, these tools are of little value if the thieves avoid the traditional lending routes and opt to apply for fraudulent payday loans instead.
In one recent case, according to Mr. O’Farrell, a victim of identity theft reported receiving more than 100 harassing calls from payday lenders over a 48-hour period. In a second case, the victim reported receiving harassing and threatening phone calls from the same payday lender more than 300 times over a three-week period.
It’s a national trend, according to Mr. O’Farrell “While we were working on a case on the west coast involving a group of more than 300 victims of payday-related identity theft, the media was reporting that thieves who had accessed the personal information of more than 300,000 victims of a data breach at a Florida university had taken that stolen information directly to the same payday lenders we were dealing with.”
The Council is working with a number of partners to find ways to close this lending and security loophole and provide better protection for consumers and victims.
In the meantime, the Council offers the following tips to prevent and respond to this type of identity theft:
- Don’t be intimidated by payday lenders. Know your rights and demand the lender or collections agency comply with the Fair Debt Collections Practices Act.
- Request that the lender send you, by mail, complete information on the alleged loan.
- If you think you have been a victim of identity theft, obtain a police report in the city where you live or work (not where you think the crime took place). If the loan is not yours, inform the lender, by certified mail, that you are a victim, the loan is not yours, and to cease any calls or actions. Enclose a copy of your police report.
- Don’t provide any personal information over the phone to payday lenders. Many times they will ask the victim for their Social Security Number in order to verify their identity. Do not provide your Social Security Number under any circumstances.
- Consider placing a security freeze on all your credit reports, including Experian, Equifax, and Transunion, as a general precaution against identity theft.
About the Identity Theft Council
the Identity Theft Council (ITC) is an award-winning non-profit, grassroots organization that provides hands-on support for victims of identity theft, helps law enforcement provide a more coordinated response, and promotes identity theft education and awareness at a community level. The Council was founded by security expert Neal O’Farrell with the support of local law enforcement. For more information or to become involved in the Identity Theft Council, please visit: http://www.identitytheftcouncil.org/.