Identity theft and bank account freezes

Eyewitness News Exclusive
February 4, 2009 6:13:04 PM PST
The figures are staggering. It is estimated that someone's identity in this country is stolen every two minutes. But what's worse is how collection agencies and law firms can get legal orders against identity theft victims for debts they don't owe.The problem is that it is up to the victim to try and undo the mess after the fact, to prove he or she is not the person who racked up a debt and defaulted. In the meantime, victims like Joann Charles end up totally cut off from their funds with no warning.

"I can't even cry anymore," Charles said. "I've cried days into night."

Charles lives in Mamaroneck, in Westchester County, and has for 16 years. She showed us her lease.

The Investigators' Sarah Wallace: "You've never lived in Brooklyn."
Charles: "Never did. Never did...I've never had an account which they said was a Citibank account. Never had that account."

But according to court papers, someone living in Brooklyn with the name Joann Charles and the same social security number did have a Citibank account and failed to make payments. And now, the Westchester Joann Charles is paying the price.

"I tried to use my card, and it said unauthorized," she said.

Charles says her financial life started unraveling when she tried to buy a present with her bank card and was denied. She says she has money in the account, but now she can't get to it because Washington Mutual and Chase have frozen both her checking accounts.

Wallace: "You have no access to any of your money?"
Charles: "None whatsoever. My accounts are still frozen."

The banks notified her they had no choice after receiving a legal notice from the law firm Rubin and Rothman, who'd filed a judgment in Brooklyn on behalf of Citibank.

"There was a judgment linked to that address there that was served to someone in Brooklyn," Charles said. "With my same name using my social, but they have a Brooklyn address."

We went to the Brooklyn address, where court papers say a woman named Joann Charles was served. She has since moved to a different apartment, where we found her outside.

Wallace: "Looking at this here, is this your social security number?"
Joann Charles: "No. I don't have one."
Wallace: "You don't have one. Why wouldn't you have a social security number?"
Charles: "Because I am not from this country."

She did confirm she was served by the law firm at her former Brooklyn address. She says she didn't answer because she didn't know she had to.

She wouldn't answer whether she ever had a Citibank credit card debt and claimed she's a victim too. Then she promised to have her lawyer call us. No one did.

So how is it that law firm like Rubin and Rothman can file court papers and judgments against debtors, in this case in a different county, without confirming they have the right person?

We tried to speak to the people responsible at the law firm's office in Suffolk County. But they didn't want to talk about the situation.

"It is clear that the law should be changed," New York Congressman Anthony Weiner said. "You've got to do some due diligence if you're a debt collector to make reasonably sure that you've got the right person."

Weiner says that the case of Joann Charles case isn't isolated.

"The system is completely broken," he said. "We need to have a process that lets someone, very quickly, notify someone that their identity has been stolen, to get out from under some of these burdens. The kind of cases that Channel 7 has uncovered are not that uncommon around the country."

On Wednesday, Joann Charles, an X-ray technician at Westchester County Medical Center, has to take another day off from work and go to court in Brooklyn to prove she's not the person responsible for the Citibank debt. In the meantime, she's desperate.

Wallace: "You've had to borrow money?"
Charles: "My dad, unfortunately, it's so sad. He's a senior citizen. He had to give me his money which he got for Father's Day, which he got for Father's Day from relatives...It's very scary. Words cannot express how I feel. It makes you wonder how someone can just produce a letter and go to the bank and have your entire bank account shut down."

The banks say they sent letters to Charles as soon as they were notified about the legal hold. That is all they can do until the judgement is lifted, which will hopefully happen Wednesday.

One mistake Charles made was not checking her credit report in the past year.

Tips on avoiding identity theft:

Order your credit report at least once a year. Federal law gives you the right to one free credit report each year from the three credit bureaus: Equifax, Experian, and TransUnion.

For more information on your free credit reports, visit the Federal Trade Commission by CLICKING HERE.

To order your annual free credit report:

  • By telephone: 877-322-8228
  • Online:

    Residents in New Jersey can also obtain free annual credit reports under state law, in addition to the free reports available under federal law.

    As of November, 2007, people nationwide can "freeze" their credit reports with the three credit bureaus. By freezing your credit reports, you can prevent credit card issuers from accessing your credit files except when you give permission. That effectively prevents thieves from opening up new credit card loan accounts. In most states, security freezes are available at no charge to identity theft victims and for a relatively small fee for non-victims.

    For state-by-state information on security freezes, visit this Consumers Union web page by CLICKING HERE.


    STORY BY: The Investigators' Sarah Wallace

    WEB PRODUCED BY: Bill King