Back to top

Safeguarding Your Identity from Bogus Debts

Published: September 2014

Receiving a bill for something you never purchased is certainly unsettling. Whether it’s an honest error or a purposeful theft, it can have a negative impact on your financial records and your credit score, according to the Insurance Information Institute. It may also mean your identity has been stolen or compromised.

Man sitting on floor reading papers.

Identity Protection, Reinvented

Your data is valuable. Time to treat it that way. Allstate Identity Protection helps you secure your data.

Learn more Find an agent

How Can Bogus Debts Happen?

False charges or debts on your account may signify that your identity has been compromised, but it also may be a result of an error on a debt collector's part in thinking you are someone else. According to IDT911, when a debtor makes this mistake and assigns you another person's debt, it is "tagged" to your credit history. If you do not resolve the issue properly and the debt goes unpaid, it will be reported to the three major credit bureaus, thus putting a mark on your credit score. These cases can take a toll on victims by damaging credit and often take months to resolve.

How ID Restoration Coverage Can Help

With identity restoration coverage, you don’t have to endure the hassle and frustration of resolving wrongful debts and credit card charges on your own. The National Association of Insurance Commissioners states that many insurers offer resolution services and will provide someone who will contact your credit agencies for you and assist in requesting that incorrect information be removed from your credit files.

The NAIC also states that identity restoration coverage may offer reimbursement for expenses you may incur as a result of disputes with creditors over incorrect charges on your account. These costs could include legal fees, lost wages or postage costs in mailing documents. You can learn more about your coverage amount by speaking with your insurance agent about your specific policy.

According to IDT911, there are also some ways you can proactively work to keep your personal information safe, including:

  • Use a debit card that requires you to enter a personal identification number when using it.
  • Check your credit card statements and bank account activity frequently.
  • Tell your bank about upcoming travel.

It’s also important to know what your credit card issuer is required to do if a thief does rack up bogus debts on your accounts. According to the Consumer Financial Protection Bureau, you are not required to pay any charges that are in dispute. If your credit company refuses to cooperate, the CFPB suggests you file a complaint through its consumer assistance website.

Remember, breaches of your credit card information and debt tagging are very serious issues and can have long-term negative consequences. If not handled properly, it can take significant time and effort to resolve with creditors. Identity restoration coverage can be a great way to protect yourself in case an unexpected bill shows up in your mailbox.

Related Resources:

This content is for informational purposes only and may not be applicable to all situations.

Coverage subject to terms, conditions, and availability. Policy issuance is subject to qualifications. Allstate Insurance Company, Allstate Indemnity Company, Allstate Fire and Casualty Insurance Company, Allstate Property and Casualty Insurance Company, Northbrook, IL. © 2020 Allstate Insurance Company, Northbrook, IL.
ECC Monitor: OK