We have discussed various ways to protect ourselves from identity theft or to correct it once it happens (click here to see all the identity theft posts). This post is designed to talk specifically about how we can fight back and whom we can sue for the harmful effects of identity theft.
First, as we previously discussed in a post, we need to dispute the fraudulent accounts on our credit reports. If the credit reporting agencies (Equifax, Experian, TransUnion, and others) do not correct our credit reports, then we can potentially sue the credit reporting agencies for several items. First, the failure to maintain maximum accuracy in our credit reports. Second is the failure to do a proper investigation (or "a re-investigation," as it is known under the law). Finally, state law offers remedies as well, particularly defamation (as the agency has reported false information about you), invasion of privacy and negligence. There are legal issues involved with state law claims in that certain types of claims are preempted (or set aside) by federal law.
The second set of possible defendants includes the furnishers or the creditors. These creditors have furnished information to the credit reporting agencies that we owe them money or that we are late or that we have failed to pay. When this involves an account opened by identity theft, then it is not only inaccurate, but it is also false. If we have properly disputed the accounts, then we have a claim under the Fair Credit Reporting Act for the failure to conduct a reasonable investigation or re-investigation. Normally, the furnishers limit their investigation to comparing their computer screen to see if the Social Security number and name match. Strangely enough, this is exactly how an account is opened by identity theft -- the thief has your Social Security number and date of birth. Thus, the investigation by the furnisher is usually worthless. Another option that exists before a dispute is made and in some cases after a dispute is made is to sue under state law as we discussed above. This includes defamation, invasion of privacy, and negligence. In most circumstances, we do need to let the furnisher know that the account is one opened by identity theft before we sue under either state or federal law.
The third possible set of defendants includes the actual identity thieves. Most of the time, we will not know who these people are, but in the context of identity theft in a divorce, we may know who has stolen our identity. Alabama has a specific statute 13A-8-199 that allows us to sue the identity thief and recover our actual damages, attorney's fees, and, in the appropriate situation, up to $5,000 in statutory damages. As we mentioned, this may be rare to know who the thief is; if we do, then it may be appropriate to sue the identity thief.
We do want to make this point clear with respect to identity thieves. Oftentimes, the credit reporting agencies and the furnishers will say that they are not at fault but that it is only the fault of the identity thief. It is true that the identity thief is the one who stole our identity, but once that has occurred and we let the credit reporting agency and the furnisher know about the fact that it has occurred, then it is no longer the fault of the identity thief for Equifax or for Capitol One to continue to report this false information. They have their own responsibility under federal and state law to have accurate credit reports, and if they have failed in that, then they can hardly blame somebody else.
The bottom line is that we have options on suing the responsible parties who refuse to correct our credit reports and who refuse to stop reporting false and defamatory information about us. Contact us if you have any questions about a possible suit that may be appropriate for you if you have been the victim of an identity theft.
