By Donya Parrish, MCU VP Risk Management

Q: If a consumer contacts us to say they are a victim of ID theft and there is a loan from our credit union on their credit report fraudulently, are we required to do anything about it?

A: Yes! Under the FACT Act Section 151, your credit union has obligations to victims of identity theft if they notify you of being a victim and your credit union may have opened a fraudulent loan or account.

The victim is allowed to request records from you and that is a process that the FACT Act 151 lays out. The credit union can verify the identity of the person making the request through reasonable means and can also request any of the following to confirm they are an ID theft victim:

• A copy of the police report evidencing the victims claim;
• A properly completed copy of the FTC’s standardized affidavit of ID theft; or
• An affidavit of fact that the credit union considers acceptable for that purpose.

The credit union would then have 30 days to provide records to the victim at no charge to the consumer. That might include copies of loan applications, ID used in the transaction, or any other documents to assist the consumer in recovering from the fraud.

If the credit union is unable to verify the consumer making the request or is not able to confirm they are a victim of ID theft, the credit union can deny the request. It might be worthwhile to work with any law enforcement agency involved to ensure the consumer is not facing additional barriers to restoring their credit and name.

The credit union should also notify any credit reporting agency a loan has been reported to that it is fraudulent and opened under false pretenses. The credit union may have additional obligations to assist the consumer with removal of liens or unpaid balances, depending on the situation. You can read more about the consumer rights here in this FTC consumer blog.