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True Name Fraud, A Serious Threat To Consumer Credit Scores

By Sally Maison
Published: Monday, March 8th, 2010

At a time when consumers are keeping a careful watch on their credit scores, the threats against it seem to be increasing daily. Credit card companies dealing with the new Credit CARD Act are adding more pitfalls in their credit card terms which can potentially ruin the credit score of the unfortunate consumer who falls for these traps. Building up a good credit history is getting more difficult as credit card application approvals continue to be stricter. And, of course, the threat of credit fraud has always been an ever present risk on the credit score of consumers, along with their entire financial life.

True Name Fraud, A Serious Threat To Consumer Credit ScoresAmong identity theft schemes, true name fraud is one of the most difficult ones to discover and to recover from. A true name fraud is when a fraudulent account is opened based on a stolen identity. True name frauds usually involve stealing a whole host of personal information from the victim. Once the account has been opened, the scammer who opened the fraudulent account can then charge purchases on the account without the victim knowing what is happening.

Victims of this kind of fraud are numerous across the country. According to a report from Javelin Strategy & Research, there were more than 11 million victims of identity theft in America just last year. On a positive note, the report also indicated that the time it took for consumers to report cases of identity fraud showed a drop during the past year. This indicates that there is a growing awareness of identity fraud detection among consumers and the financial industry.

For victims of true name fraud, signs that they may have become a victim may be receiving bills for chargers that they never made but were instead made using fraudulent accounts. Another indicator is when their credit score drops significantly even though they have kept up with their debt payments and have avoided actions which could cause their scores to go down.

The impact on credit scores may be one of the most vexing problems that come up when a consumer gets victimized by fraud. A low credit score these days basically guarantee that the consumer cannot get access to credit or loans. They will also get more oppressive debt payment terms and may even have their employment opportunities ruined.

Recovering from identity fraud can also take a considerable amount of time, effort and finances. In some cases, consumers may have to resort to legal measures to persuade bill collection agencies to correct fraudulent records.

The most effective way for consumers to avoid being victimized by fraud is to monitor their credit closely and to take immediate action should they come across something questionable. Consumers can request a free credit report from each one of the three major credit reporting bureaus for a single 12 month period.

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