Chairman & Managing Director
Here are four scenarios involving identity
theft that mortgage originators encounter from time to time. Read them and then
keep them in mind as I discuss how to ask for additional information in order
to prevent identity theft.
1.
A law enforcement report containing detailed
information about the identity theft and the signature, badge number, or other
identification information of the individual law enforcement official taking
the report should be sufficient on face value to support a victim’s request.
Question: Without an identifiable concern, such as an indication
that the report was fraudulent, would it be reasonable for an information
furnisher or Consumer Reporting Agency (CRA) to request additional information
or documentation?
Answer: It would not be reasonable.
2.
A consumer might provide a law enforcement report
similar to the above report, but certain important information such as the
consumer’s date of birth or Social Security number may be missing because the
consumer chose not to provide it.
Question: The information furnisher or CRA could accept this
report, but would it be reasonable to require that the consumer provide the
missing information?
Answer:
It would be reasonable.
3.
A consumer might provide a law enforcement report
generated by an automated system with a simple allegation that an identity
theft occurred to support a request for a tradeline block or cessation of
information furnishing.
Question: Would it be reasonable for an information furnisher or
CRA to ask that the consumer fill out and have notarized the Commission’s ID
Theft Affidavit or a similar form and provide some form of identification
documentation?
Answer: It would be reasonable.
4.
A consumer might provide a law enforcement report
generated by an automated system with a simple allegation that an identity
theft occurred to support a request for an extended fraud alert.
Question: Would it be reasonable for a consumer reporting agency
to require additional documentation or information, such as a notarized affidavit?
Answer: It would not be reasonable.
In these scenarios, a
financial institution should be responsive in accordance with certain
guidelines. Specificity of action must be appropriate, reasonable and
proportional to the challenge. However, total reliance on the CRA is inappropriate.
