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Victims of identity theft suffer greatly from the stress and emotional trauma the experience brings. But when it comes to resolving their cases and repairing the damage, progress is made by being assertive, organized, and knowledgeable about their legal rights. Time and accuracy are paramount to every step of this journey. What vary are the best steps to take when resolving specific, distinct ID theft problems. This article outlines the steps you should take if funds have been fraudulently taken from your account using checks or other “paper” transactions. In general, if an identity thief steals your checks or counterfeits checks for use with your existing bank account, stop payment on all items that may be presented for payment, close the account, and ask your bank to notify Chex Systems, Inc. or the check verification service with which it does business. As a result, retailers are alerted not to accept these checks. While no federal law limits your losses if someone uses your checks with a forged signature, or uses another type of “paper” transaction such as a demand draft, state laws may protect you. Most states hold the bank responsible for losses from such transactions. At the same time, most states require you to maintain reasonable care and control of your account. For example, you may be held responsible for the forgery if you fail to notify the bank in a timely manner that a check was lost or stolen. Contact your bank, or your state banking or consumer protection agency for more information. You can contact major check verification companies directly for the following:
If a check you write from your own account is rejected by a merchant, it may be your first indicator that an identity thief has been using the Magnetic Information Character Recognition (MICR) code (the numbers at the bottom of checks), your driver’s license number, or another identifier linked to you. The merchant who rejects your check should give you its check verification company contact information so you can confirm the reason for the rejection, and if identity theft is the cause, to find out what information the thief is using. If you find that the thief is using your MICR code, ask your bank to close your checking account, and open a new one. If you discover that the thief is using your driver’s license number or some other identification number, work with your department of motor vehicles or other identification issuing agency to get new identification with new numbers. Once you have taken the appropriate steps, your checks should be accepted. If the checks are being passed on a new account, contact the bank to close the account. Also contact Chex Systems, Inc., to review your consumer report to make sure that no other bank accounts have been opened in your name. Dispute any bad checks passed in your name with merchants so they don’t start any collection actions against you. The check verification company may or may not remove the information about the MICR code or the driver’s license/identification number from its database because this information may help prevent the thief from continuing to commit fraud.
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