Disputing Unauthorized Use of Credit Card

Reader Question: "I have always had an excellent credit history except for a time in 2004 when my nephew used my information and used my credit card. I disputed this with the credit card company and they worked with me for awhile, but I did not file a police report in the city where it occurred and they finally just told wrote it off as bad debt. Problem is it still appears on my credit report and the amount keeps increasing. What are my options?"

When you say that "the amount keeps increasing," I'm not sure what you mean. If the credit card company charged off the account, then they should not be adding penalty fees to the balance at this point. If the amount due is increasing, then you need to ask the credit card company about it. It sounds like they're piling out late fees.

In most cases, the card company will turn the account over to a debt collection agency. This usually happens after a few weeks of missed payments. This is typically when the card issuer will "charge off" the debt, meaning they are taking it as a loss. So the first thing you need to do is find out the current status of your account. Has it been sold to a collection agency? Why is the amount due increasing? Etc.

As far as the negative item being on your credit report, there's probably not much you can do about that. If you can somehow prove that the balance is the result of credit fraud, then you can also dispute the negative entry with the credit reporting companies. Aside from that, it's probably on there to stay.

Keep in mind that negative entries such as this can only stay on your credit report for a period of seven years. After that, it has to come off your report. It's a federal law.

Related Q&A sessions:

• Disputing a Collection Item on Your Credit Report
• How to Clear Up a Bad Credit History

I hope that helps you some. Good luck!