SouthernWorldwide.com – In a concerning trend for consumers, a significant majority of identity crimes now originate from the opening of new accounts, rather than the compromise of existing ones. This shift highlights a critical vulnerability in how personal information is used and protected.
For years, two women in Bremerton, Washington, engaged in a sophisticated scheme. They opened credit cards and lines of credit using the identities of others. Their method involved intercepting documents from stolen mail. By redirecting new account statements to an address they controlled, they ensured victims remained unaware of the fraudulent activity.
This elaborate plan resulted in prosecutors alleging nearly $229,000 was stolen from banks and their customers. The women pleaded guilty to bank fraud and aggravated identity theft in federal court this month, underscoring the severity of their actions.
This case serves as a stark reminder of how quickly stolen mail can escalate into a major identity theft problem. The Identity Theft Resource Center (ITRC) reports that opening a new account is now the leading form of identity misuse.
According to the ITRC’s latest data, a substantial 62.1% of attempted misuse cases began with a new account application. This is in contrast to the takeover of accounts that victims already held.
When people consider an account opened in their name without their knowledge, they might envision a checking account at an unfamiliar bank. However, credit cards are a far more common target for these fraudsters.
Last year, credit cards accounted for 41% of attempted account misuse reported to the ITRC. Checking accounts followed at 17.7%, and personal loans at 8.5%.
A credit card is considered one of the easier accounts for criminals to open in someone else’s name. This ease stems from the automated approval process used by many lenders.
Lenders typically match the submitted name, date of birth, address, and Social Security number (SSN) against existing bureau files. If these details align with a record already on file, an automated system can approve the application without human verification.
With enough of an individual’s information, often obtained through data breaches or stolen mail, this automated check can be successfully passed.
The scheme by Vranic and Marquis was not limited to a single fraudulent account per victim. Once they had established control over someone’s identity, they proceeded to activate existing cards, open new credit lines, and even move money from bank accounts linked to the same name.
This multi-faceted approach is not uncommon. The ITRC found that 25.6% of victims are currently dealing with two or more identity incidents simultaneously, an increase from 23.5% the previous year.
The same stolen details – name, date of birth, address, and SSN – can be used just as easily to open subsequent accounts as they were for the first.
A newly opened fraudulent account does not typically announce its existence immediately. It only appears on a victim’s credit report after the first statement cycle closes.
This delay means the first record of the fraudulent account is 30 to 60 days behind the actual opening date. Banks report to credit bureaus monthly, and the bureaus then take up to two additional weeks to process and post these changes.
The initial paper notice for the fraudulent account is sent to the address provided on the application. In the case of Vranic and Marquis, they had the statements mailed directly to their own address, effectively intercepting any communication meant for the victims.
When these statements arrive at the correct house, they might be mistaken for routine offers or unsolicited card applications, leading them to be easily disregarded.
By the time a denied loan application or a collections call makes the fraudulent account impossible to ignore, it has often been open and accumulating charges for weeks.
It is crucial to act quickly once a fraudulent account is discovered. Every day an account remains open provides a thief with more time to spend money, damage credit scores, or attempt to use the same stolen information elsewhere.
The first step is to contact the credit card company or lender that opened the fraudulent account. Inform them that the account is fraudulent and request that it be closed or frozen. Also, ask them to stop any pending charges and provide written confirmation that you are not liable for the debt.
Next, visit IdentityTheft.gov. This Federal Trade Commission (FTC) website provides an Identity Theft Report and a recovery plan. These resources are designed to assist you in reporting identity theft, minimizing damage, and repairing your credit.
The FTC Identity Theft Report is generally the primary document required for disputing fraudulent accounts. Some lenders, banks, or debt collectors may also request a police report.
If a police report is required, file one with your local police department and retain a copy for your records. This documentation can be vital in resolving the issue.
It is essential to maintain meticulous records. Keep copies of all account statements, collection letters, emails, dispute letters, FTC reports, police reports, and confirmation numbers.
A clear paper trail can significantly ease the process of proving an account was fraudulent, especially if a creditor, credit bureau, or debt collector questions your claim.
Dispute the fraudulent account directly with the lender that opened it, in writing. Additionally, dispute the account with Equifax, Experian, and TransUnion if it appears on your credit reports.
Under the Fair Credit Reporting Act, companies that provide information to credit bureaus have a legal obligation to investigate disputed information.
Consider placing a credit freeze with Equifax, Experian, and TransUnion. This measure helps block future applications for credit in your name. Freezes have been free of charge since 2018 and can be easily lifted online when you need to apply for credit yourself.
A credit freeze effectively blocks access to your credit file. Alternatively, a fraud alert can be placed, which notifies lenders to take extra steps to verify your identity before opening new credit in your name.
To place a fraud alert, you only need to contact one of the three major credit bureaus. That bureau is then required to notify the other two.
If you suspect that stolen mail was instrumental in the opening of a fraudulent account, report it to the U.S. Postal Inspection Service. This is the law enforcement arm of the Postal Service.
You can report mail theft, identity theft, fraudulent change-of-address requests, fraudulent mail holds, and fake Informed Delivery accounts at mailtheft.uspis.gov.
If your Social Security number was compromised and used in the fraud, request an IRS Identity Protection PIN at irs.gov/ippin. This PIN helps prevent a thief from filing a fraudulent tax return in your name.
It is crucial to change the passwords on your bank, credit card, and email accounts, especially if your email address was involved in the fraud. Utilizing a password manager can help create and securely store strong, unique passwords for each account.
This practice ensures that a compromise of one password does not grant access to your entire financial life. Furthermore, enable two-factor authentication (2FA) wherever it is available.
Review recent transactions, saved payment methods, and automatic payments for any activity you do not recognize. Promptly address any discrepancies.
Resolving identity theft can be a complex and time-consuming process. It often involves extensive communication with creditors, credit bureaus, debt collectors, and persistent follow-ups.
Maintaining copies of every report, dispute letter, confirmation number, and account closure notice is vital. This creates a clear paper trail that can be invaluable if the fraud resurfaces.
While no service can definitively prevent every instance of identity theft, continuous three-bureau credit monitoring can provide an early warning system.
This monitoring may alert you to new accounts as they are reported, rather than weeks later when you are denied credit or receive a collections notice.
A stolen credit card account can quietly escalate into a significant identity theft crisis before any bills are received. This is precisely what makes the Washington case so alarming.
The victims in this case were not ignoring warning signs; rather, the fraudulent statements were being redirected. The most effective proactive measure is to make it more difficult for thieves to open new accounts.
Consider freezing your credit at Equifax, Experian, and TransUnion. Monitor for hard inquiries and regularly check your credit reports for any accounts you do not recognize.
If you discover a fraudulent account, proceed directly to IdentityTheft.gov, file a report, and dispute the account in writing with the lender. Credit monitoring services can also provide a faster alert when a new account or inquiry appears on your file.
While these measures may not stop every scam, they can significantly reduce the time between when the fraud begins and when you become aware of it, allowing for quicker intervention.
