What to Do If Someone Opens a Credit Card in Your Name
Getting a new credit card in the mail can seem like a big win. You’ve studied the cards, picked the one that suits your needs, and gotten approval – and your new card validates your financial impact. But what if you’ve never asked to open that credit card that just showed up in the mail?
Reddit user suicidal_whs recently shared his experience with the r / personalfinance subreddit, explaining that he visited a motorcycle dealer in the fall when he was considering buying a new bike. The seller mentioned the brand’s credit card program, but a potential buyer said they don’t need a credit card unless they decide to buy a bike. They filled out an application for the card, assuming it would be used to verify their credit, and the merchant assured them that they would not issue a credit card if the purchase did not go through. (This is not true.)
Surprise! A few months later, the motorcycle buyer received a payment card in the mail. They canceled the card but wondered if that was enough to protect their credit. I asked Matt Schultz, chief industry analyst at CompareCards , what to do if a card opens with your name, but without your permission.
Pause before filling out any forms
If you’ve gotten to the point of reviewing an online application or credit card application, never assume that it will only be used to verify your credit and eligibility for interest rates. “Never fill out an application for a credit card if you don’t really need it,” Schultz said. “This is true for most other financial products as well.”
The Consumer Financial Protection Bureau advises you never to write down your Social Security number or type it on the keyboard unless you are sure you need a credit card.
There is only one exception known to us: Apple Card allows you to review the terms of your card before choosing whether you want to open an account.
Report Fraud
If you’ve deflected the seller’s pressure to apply for a credit card but still get it, it’s a scam, simple and straightforward.
Your first step should be to call your card issuer, Schultz said, to inform them that the account was opened without your consent. He then recommends filing an identity theft report with the FTC and filing a report with the police. “These two things can serve as proof that you are a victim,” he said.
You can also file a complaint with the Consumer Financial Protection Bureau and the Bureau of Business Improvement to alert others and draw attention to this practice. For example, the CFPB database has over 1,800 complaints from consumers who were issued an unsolicited credit card.
If you really want to criticize the company, you can leave negative reviews online.
Protect your credit
Your next step is to block your loan so that the situation cannot happen again, and the person who ordered your card could no longer open accounts in your name.
Put an annual fraud alert on your credit report at each of the three credit bureaus, but don’t stop there. After you file your report with the FTC, send a copy of this report to each credit bureau so that your credit report has an extended fraud warning . This warning lasts seven years and requires lenders to contact you before issuing a loan in your name.
It’s also a good idea to freeze your loan to prevent new accounts from opening without your knowledge. It’s free , so there’s no reason not to.
Think twice before canceling a card
CFPB recommends that you void your card when you call the issuer to report a fraud. But Schultz says keeping the map can be beneficial for you.
“Opening a new card lowers your credit a little, but only for a short time,” Schultz said. “After that, it can really help your credit history by improving your utilization rate.” According to him, the card with annual payment will be an exception. “There is no point in paying an annual fee for a credit card that you never intend to use.”
If the card issued to you is for a store only and you know you will not use it, it will most likely be closed by the issuer after several years of disuse. But co-branded cards (those that can be used in retail stores and elsewhere) can be useful for your loan portfolio, Schultz said. “It might make sense to keep the card, put recurring, predictable expenses on it, such as signing up for Netflix, and then set up auto-pay to pay the exact amount each month,” he recommended. “This way, you create a positive history of payments with the card, without the fear of a large number of purchases.”