Can You Sue If you are a victim of Identity Theft?

Can You Sue If you are a victim of Identity Theft?

by Monica Sanders, December 2009

Someone stole your identity, ruined your credit, and forced you to spend months or even years trying to prove who you are. If you haven't lost enough, you find out that their bad deeds have cost you a job. Now, you want to take your fight into the courtroom. The problem facing many identity theft victims who want to file suit is: Whom do you sue? While it may be an old problem to you, identity theft is still a relatively new problem for states and the federal government. Getting your case before a judge can be tough, but there are ways to sue the credit bureaus and even the thief.

If you'd like to go after the thief, state legislatures may be the first place to look for relief. Many have passed laws allowing identity theft victims to sue. Both California and North Carolina have such a law. North Carolina made financial identity fraud a felony under state law allowing victims to sue for up to triple the actual damages, or $5,000, whichever is greater. Contact your state legislator and find out if there is similar law where you live.

If you are trying to sue the Credit Bureau or a business for damages, the road gets a bit rockier. One way to file suit against the bureaus or other entities that disclose your credit information is to use the Fair Credit Reporting Act. In order to do so, you have to establish actual damages. The FRCA does not have a minimum recovery amount for damages. If proving actual damage isn't tricky enough, a Supreme Court decision made it a bit harder.

In TRW v. Adelaide Andrews, Andrews sued the bureau for breach of privacy after another woman got access to her credit information and used it to set up accounts in her (Andrews') name. Her problem was in the timing of the suit. It fell outside of the state's two-year statute of limitations. The high court upheld a ruling that her case couldn't proceed because the statute had run out. This is bad news for the average identity theft victim. A Privacy Rights Clearinghouse study estimates that most victims spend 23 months resolving the issues directly related to the fraud, some have spent up to four years. So, is easy to see how Andrews ran out of time.

However, you shouldn't be discouraged. As soon as you think you may want to sue, find out what the statute of limitations is in your state and file. To have a chance at successfully filing suit under federal law, you need to make sure you have time to file. You also need to keep track of every step of your case. Anytime you can assign a monetary value to what you have suffered as an identity theft victim, do it. That can help you prove actual damages under the FRCA.

Getting justice or at least a little help as an identity theft victim is difficult. There is progress on the horizon. Two bills that were introduced in Congress this session are aimed at helping victims get some kind of recourse. The first is the "Comprehensive Identity Theft Prevention Act," in the Senate right now. For the most part, it calls for more regulation and tougher penalties on the actual thieves. It also provides another way for victims to sue for damages. The other bill is in the House. While it does not help victims sue, it does call for an amendment of the tax code that will allow victims to deduct 100% of the expenses related to identity theft. It is not the same as a lawsuit, but it will provide a way to get back some of the money you lost while trying to regain yourself.