What Every Consumer Needs to Know—and How Credo Legal Can Help

Identity theft isn’t just an inconvenience—it’s a legal and financial nightmare. When someone uses your personal information to open credit accounts or take out loans in your name, the damage can quickly spiral. Suddenly, you’re being harassed by debt collectors, your credit score plummets, and you may even face lawsuits over debts that aren’t yours.

If this has happened to you—or someone you love—there’s good news: you have powerful legal rights, and you don’t have to navigate this alone. This blog will walk you through how to identify identity theft, dispute fraudulent debt, and remove it from your credit and collection history legally and effectively.

Step 1: Recognize the Signs of Identity Theft

Most people don’t discover identity theft until the damage is already done. Be on the lookout for warning signs like:

• Debt collection calls or letters for accounts you never opened
  
   
• Accounts or credit inquiries on your credit report that you don’t recognize
  
   
• Denied applications for credit you expected to be approved
  
   
• Unexpected drops in your credit score
  
   
• Bills or statements for unfamiliar accounts
  
   

If anything looks suspicious—act immediately. The longer false information lingers, the harder it becomes to remove.

Step 2: File an Identity Theft Report

The first legal step to disputing identity theft is documenting it. You’ll need to create an official Identity Theft Report, which includes:

1. A police report
   
   Visit your local police station and report the crime. Be sure to get a copy of the police report—it’s a key piece of evidence when disputing fraudulent debt.
   
    
2. A report with the FTC
   
   Go to identitytheft.gov and submit an identity theft report. The FTC will guide you through a recovery plan and generate a personalized affidavit.
   
    

Keep these documents in a secure place. You’ll need to send them to creditors, debt collectors, credit bureaus, and possibly even a court if legal action is involved.

Step 3: Review and Dispute Your Credit Reports

Under the Fair Credit Reporting Act (FCRA), you have the right to access your credit reports for free at annualcreditreport.com from the three major bureaus—Equifax, Experian, and TransUnion.

Look for:

• Accounts you didn’t open
  
   
• Inquiries you didn’t authorize
  
   
• Balances or delinquencies on unknown debts
  
   

Once identified, you can send dispute letters to each bureau. Be sure to include:

• A copy of your Identity Theft Report
  
   
• A statement explaining the error
  
   
• Any supporting documentation (police reports, FTC reports, etc.)
  
   

The bureaus are required to investigate your dispute within 30 days and must remove unverifiable or inaccurate information.

Step 4: Send a Written Dispute and Cease Collection Letter

If you’re being contacted by a debt collector for a fraudulent debt, you have specific rights under the Fair Debt Collection Practices Act (FDCPA).

You should send a debt dispute letter that includes:

• A clear statement that the debt resulted from identity theft
  
   
• A request for validation of the debt
  
   
• A copy of your FTC report and police report
  
   
• A demand to cease further communication until the debt is verified
  
   

Debt collectors must stop all collection activity until they provide proper validation. If they cannot prove the debt is legitimate and belongs to you, they must close the account and stop reporting it.

Step 5: Place Fraud Alerts and Security Freezes

While cleaning up existing damage, it’s also crucial to prevent future fraud.

• Fraud Alert: This tells creditors to take extra steps to verify your identity before opening new accounts. You can place one by contacting any one of the three bureaus—by law, they must notify the others.
  
   
• Security Freeze: This blocks any access to your credit report unless you lift the freeze yourself. It’s the most secure way to prevent new fraudulent accounts.
  
   

These tools don’t affect your credit score and can be removed or adjusted at any time.

Step 6: Notify the Original Creditor

Don’t forget to inform the original creditor or lender about the identity theft. Sometimes, debts are still listed under your name even after a collection agency has taken over.

Send a letter with:

• Your Identity Theft Report
  
   
• A copy of your government-issued ID
  
   
• A brief summary of the fraudulent activity
  
   

Request that the creditor permanently close the account and remove it from your records. Also ask for written confirmation that the debt is no longer associated with you.

Step 7: Consider Legal Action If the Debt Remains

If a collector or credit bureau continues to report or pursue a fraudulent debt after receiving proof of identity theft, you may have grounds for a lawsuit. Under the FDCPA and FCRA, you could be entitled to:

• Removal of the debt and damage from your credit report
  
   
• Statutory damages (up to $1,000)
  
   
• Emotional distress damages
  
   
• Attorney’s fees
  
   

This is where a law firm like Credo Legal steps in. We don’t just send letters—we go to court if needed to make sure your rights are protected and you’re not held accountable for someone else’s crime.

Real Example: $9,400 Debt Removed Due to Identity Theft

A Credo Legal client came to us after receiving a lawsuit notice for a $9,400 personal loan they never took out. After investigating, we discovered the account had been opened online using a stolen social security number. We filed an identity theft affidavit, challenged the case in court, and submitted evidence to the credit bureaus. The lawsuit was dismissed, the debt removed, and the client’s credit score began to recover.

Final Thoughts: You Have Legal Options—Don’t Settle for Less

Identity theft is stressful, but it doesn’t have to define your financial future. You are not responsible for fraudulent debts—and you shouldn’t let collectors or credit bureaus convince you otherwise. The law is on your side.

With the right legal strategy and an experienced team, it’s possible to:

• Remove fraudulent accounts
  
   
• Stop harassing collection calls
  
   
• Restore your credit
  
   
• Hold bad actors accountable
  
   

At Credo Legal, we help clients dispute identity theft debts every day. If you believe you’re being held responsible for something that isn’t yours, contact us. We’ll guide you through every step, from documentation to full resolution.

Freedom is our guiding belief—and that includes freedom from debts that don’t belong to you.