In identity theft restoration, a service offered by some security companies, personnel will work with a victim of identity theft to clear his or her name. This process can be quite lengthy and may take weeks or months as individual issues on a credit report and with individual creditors are involved. Victims of identity theft may be offered this service as an extra feature on a bank account or credit card or they may need to purchase it separately.
The first step in the identity theft restoration process is recognizing that someone's identity is being used by someone else for fraudulent purposes. Monitoring credit reports is usually the easiest way to do this, as unusual activity in someone's name will show up on reports from credit bureaus. The next stage involves providing proof that the activity was fraudulent. This can involve contacting a supposed creditor to get documentation of a transaction, such as opening a new credit card account, demonstrating that a product was mailed to an address that is not used by the victim, and taking other steps to trace the origins of the fraudulent activity.
While evidence is being obtained, notifications are sent out to credit bureaus that there are disputed items on the victim's credit report and establishing fraud alerts, and a police report is filed. This part of the identity theft restoration process is designed to prevent further fraud and to lay the groundwork for challenging items on a credit report. The next stage involves clearing individual items by contacting supposed creditors, providing them with the evidence that the activity was fraudulent, and resolving the issue.
Companies that offer identity theft restoration usually require limited power of attorney so that they can act on the victim's behalf. They may provide counseling services, legal advice, and other assistance to their clients, in addition to doing the bulk of the work involved in notifying agencies, contacting creditors, and working to clear up a victim's credit report. Because these companies usually have established relationships with credit bureaus and financial institutions, they can often accomplish this work much more quickly than an individual consumer.
As the identity theft restoration proceeds, victims may find that their interest rates and insurance are higher due to the disputed items on their credit reports. Once the problem is resolved, people can apply for lower rates, using their newly cleaned credit records to demonstrate that they are reliable.