What do you do when an identity thief steals your money?

Question

Well, obviously, you lose it. But I mean, what happens bank wise? Does the government/bank give your money back? I was watching a Dateline NBC special on how computer hackers steal various things like credit information, sell the information over the internet, thieves buy the information to use our credit cards to buy things from various places, emptying the credit card within minutes. Also, the show focused on a Nigerian scammer/hacker guy, and how he could not be arrested despite the fact the he has stolen thousands, if not millions of dollars from other peoples credit cards. So basically, if this happens to us, do we simply lose our money forever or do we get it back?

Answer 1

This is an important topic that EVERYONE needs to be self educated about because it is the fastest growing white collar crime in the western world. I have seen statistics by the FTC (Federal Trade Commission) and other government agencies that we can expect that ONE in SEVEN people sometime in their lives will be victimized by this.

It is really critical that you learn IN ADVANCE what to do to AVOID becoming a victim of this. Here is some guidance on that http://www.identitytheft.org/

The place to post questions about that is not really in Law & Ethics, but either Consumer Credit or Computers & Internet. You can also find a lot of resources via search engines and from the links I give in this answer.

Here is FTC web site with info that everyone should know about Identity Theft http://www.ftc.gov/bcp/edu/microsites/idtheft/

other government agencies are also helpful
http://www.usdoj.gov/criminal/fraud/websites/idtheft.html
http://www.ssa.gov/pubs/idtheft.htm

Here is what to do if you are now a victim of this
http://www.privacyrights.org/identity.htm

If you report credit card theft PROMPTLY to your bank, then legally you are only responsible for the first $ 50.00 or so that is stolen. The bank sucks up the rest of the loss, issues you a replacement credit card account. With a debit card, like an ATM, you have no such protection ... the crooks can take all your money, clean out your account, no one refunds you.

That is the situation in the USA ... I do not know about other nations. It may be smart to have one account for ATM usage, another for credit card usage, a 3rd for checking account. I know it is very convenient to have one account that does it all, but if you get hit by a crook, they can clean you out completely.

This is very helpful if what they stole is the ACCOUNT # by having a skimmer in the ATM machine, or in the gasoline credit card machine, a camera in ceiling over ATM machine at shopping center, or some Internet fraud.

So basically there are trade-offs ... what is convenient for you is also convenient for the crooks.

You still have the card in your possession, but the crook is stealing on that account. Thus, you need to check all bank statements, and get new balance when use ATM card, so the MOMENT you see something wrong, IMMEDIATELY report that to the bank ... you have like 30-60 days to complain about some wrongful charge on your account, then after that it is your responsibility to pay.

This also is not very helpful in the case of dumpster divers.
Some bank offers you a credit card. You not interested, pitch in trash. Some crook goes thru your trash before the garbage truck does pickup, uses the bank advertisement to apply for card in your name, and at the same time tells the bank "I have a change of address." so the bank mails the credit card to the crook address, the crook uses it to buy thousands of dollars of stuff, then disappears. The bank finds you and demands that you pay up. You are stuck because you failed to report there was a problem within the 60 days because the bills were going to the crook. You never saw them.

Or the crook goes to hospital, uses your name, gets expensive surgery, is all better, then you get the bill.

Are all victims stuck like this?

No, I have a rider on my property insurance to cover identity theft. If I am victimized like this, I turn it over to my insurance company (Allstate). They have a private detective agency on retainer to look into these things on behalf of their customers, and get as much as possible straightened out.

If you have homeowner insurance, renter's insurance, some other kind of property insurance, ask your insurance company about this. Many different insurance companies have similar offerings.

I pay like $ 40.00 a year for this peace of mind.

Answer 2

Typically, the credit card company eats most of it. You should be liable for little or nothing, as long as you report the fraudulent charges promptly.

Answer 3

Yes, if they are asking for personal info.