Addressing the Consequences of Fraud with Bankruptcy
The majority of card fraud occurs in the United States. In fact, research conducted by Barclays indicates that 47% of worldwide card fraud occurs in the U.S. even though we only claim 24% of the worldwide card volume. In 2014, 31.8 million U.S. consumers had their credit cards breached. That is three times the number that were similarly affected in 2013 indicating a drastic rise in the number of consumers being affected by card fraud. Card fraud comes in a number of forms: card-not-present fraud or online card fraud (accounting for 45% of fraud in 2014), counterfeit card fraud (coming in at 37% of the overall total of card fraud), and lost/stolen cards (14%).
In many cases, it doesn’t stop with card fraud. It evolves into identity theft. Identity theft is a billion dollar problem in the United States. Thieves are becoming ever more sophisticated and completely ruthless. Many who fall victim to card fraud and identity theft find the most effective solution to be filing for bankruptcy.
The process for disputing fraudulent card used to be extremely difficult and annoying. It usually begins with a (very long) Fraud Affidavit report form. This form needs to be completed, notarized and then sent to the creditor. A few months later, the creditor replies after conducting an on site investigation into the activities.
The process has since been streamlined (no doubt in response to the sheer number of people falling victim to card fraud and identity theft). After much trial and error, creditors seemed to have concluded that in the vast majority of cases, it is more cost effective for their business to simply write off the account as fraud rather than fight with someone over the validity of the charges.
The process has changed as well – making it easier to manage for consumers. In the typical case, the consumer calls each creditor affected to report fraudulent activity. The creditor sends out a form (fairly short, usually one or two pages). The consumer doesn’t usually even need to notarize the form. It just requires a signature and an indication of which charges are fraudulent before they send the form back in. It’s important that this occur in a timely manner, as there are deadlines to claiming fraud. Consumers who are handling a fraud claim on their own behalf should be sure to confirm the receipt of their paperwork with the creditor to avoid timeliness issues due to mail error, etc.
The most difficult cases are typically those that had fraud occurring in the past (years ago) and the consumer doesn’t notice until much later. In these cases, the account has typically been sold off to a collection agency. This type of collection agency seeking payment on old debts can be extremely aggressive. They assume the debt is valid because it was sold to them by the original creditor or assigned to them for collection by the original creditor. This is a good reason to monitor your credit report regularly. It is much easier to address fraud if you catch it quickly.
If you have been a victim of fraud or identity theft and other solutions have not worked, please get in touch to discuss the potential benefits of filing for bankruptcy. The experienced bankruptcy attorneys at southern California’s Westgate Law are ready to assist you.