| Entities | |
| Topics and Issues | Credit repair (34) FOIA (11) Identity theft (12) |
In September 2021, the FTC’s Office of the Inspector General issued a report that noted several concerns with the FTC’s identity theft report and how it can be a tool to perpetuate fraud. Among the findings are the following:
- “[T]he FTC faces challenges in addressing an increasing number of potentially fraudulent complaints submitted to [the FTC].”
- “As the number of all complaints in Sentinel rise, so does the number of fraudulent ones; the FTC’s challenge is in determining the legitimacy of these identity theft complaints. Deliberately false identity theft complaints are submitted for various reasons—including to elude payments on purchases, sell bogus credit repair services to unwitting consumers, or otherwise leverage the effects that a report can have on their credit scores.”
- “This [fraudulent reporting] exploits features of the Fair Credit Reporting Act [FCRA], which…require credit reporting agencies to remove negative information from the credit reports of consumers victimized by identity theft.
- “Users of consumer credit information (e.g., for credit, insurance, or employment purposes) must notify the consumer when an adverse action is taken on the basis of such reports.”
- “An FTC analysis of the complaints received during the first 6 months of calendar year 2021 revealed significant patterns that suggest a possible fraudulent use of [the identity theft reporting system]. These patterns foretell a risk to the credibility of a high number of complaints within the system.”
- “In addition to raising concerns about violations of federal criminal law, a high volume of fraudulent complaints could require considerable FTC resources in identifying and implementing countermeasures—and, more broadly, could affect the FTC’s data and reputational integrity.”
- “This [fraudulent reporting] exploits features of the Fair Credit Reporting Act [FCRA], which…require credit reporting agencies to remove negative information from the credit reports of consumers victimized by identity theft.
- “Users of consumer credit information (e.g., for credit, insurance, or employment purposes) must notify the consumer when an adverse action is taken on the basis of such reports.”
Following the release of the Inspector General’s 2021 report that noted several concerns with the FTC’s identity theft report and how it can be a tool to perpetuate fraud, CDIA filed a FOIA request seeking documents that relate to the subject of misuse of FTC identity theft reports or block requests sent to credit bureaus based on such reports, including the misuse of such reports or block requests by credit repair organizations or fraudsters. This FOIA request also includes, but is not limited to, records relating to the fifth issue identified in the FTC’s IG’s FY 2021 Report on the FTC’s Top Management and Performance Challenges,1 that is, the issue of fraudulent identity theft complaints.