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New Account Fraud: The Cost of Remediation

By a NortonLifeLock employee

Congratulations, You’ve Been Approved

There’s a major difference in receiving a pre-approved credit card in the mail and receiving an actual credit card in the mail. The former implies a creditor wants your business. You can shred the card, remove yourself from the pre-approved credit card mailing list and get on with your life.

But receiving an actual, approved credit card in the mail is not the same thing. In fact, this could mean that an identity thief has opened credit in your name. By the time that card lands in your mailbox, it may already be maxed out and accumulating interest. Merely cutting up the card and throwing it away isn’t going to fix the problem.

In the event that you do receive a credit card in the mail—say from a credit union or popular retailer—it’s important to quickly jump into action. Similar to any identity theft resolution process, the steps to clean your name can cost you a lot of time and a lot of cash.

The Most Expensive Type of Fraud

When it comes to identity theft, the resolution path can be tedious and expensive no matter what type of fraud has occurred. But new account fraud—including new credit cards—is the most expensive type of identity fraud for victims to resolve.1

In a 2011 study done by Javelin Strategy & Research, victims were asked to provide a few details regarding the cost of resolution in their identity theft experiences. Here’s what the numbers show:1

Average resolution time for victims of all types of identity theft: 12 hours

Average consumer cost of identity theft resolution: $354

Average resolution time in new account fraud: 26 hours

Average consumer cost of identity theft resolution in new account fraud: $1,205

The Recovery Expense Report

The victims surveyed were not given specific examples of common resolution costs or tasks, but there are several steps to resolution that are crucial—no matter what the expense. Here are a few of these steps:

(These numbers are an approximate representation. Actual costs will vary.)

Step 1: Contact the retailer where the fraudulent account was opened

If you receive a fraudulent credit card in the mail, immediately call the fraud department number on the back of the card. Have your information ready. In most cases, you will be asked to verify that the account is linked to your name and Social Security number.

After you have verified that the card is indeed fraudulent, you must specifically ask the company to start a fraud investigation. This often requires some paperwork. To speed up the process as much as possible, comply with the creditors requirements and requests.

It’s also important to specifically insist that the company removes the credit application from your credit report. This type of transaction affects your credit score, so this step is critical.

Once the company has all the information they need, they will give you a fraud investigation case number. Be sure to keep this number, and any other related information, in a safe place.

Possible Costs:

- Printing costs: 4 pages for $.252

- Certified mail: $8.103

- Lost 5 hours of work: $36.254

Possible Time:

- 1-3 hours on the phone

- 60 minutes of paperwork


Step 2: File a police report with your local police department

Next, head to your local police department. You must file a report with the department located in the city where you lived when the fraud occurred.

Unfortunately, identity theft is still a widely unknown crime. Be prepared to be persistence and do some studying before you go. The Identity Theft and Assumption Deterrence Act states that as an identity theft victim, you have a right to file a police report. In many cases, there is a police report fee.

Possible Costs:

- Gas Money: $2.045

- Lost hour of work: $10.864

- Police report fee: $7.586

Possible Time:

- Driving: 30 minutes

- Filing report: 60 minutes


Step 3: Make an FTC complaint

Head to and fill out the complaint form. The complaint form will also serve as an Affidavit form. Keep a copy of the Affidavit in a secure place.

Possible Costs:

- Print Affidavit: 7 cents2

Possible Time:

- 15 minutes


Step 4: Put a seven-year alert on your credit reports

In order to set a seven-year credit freeze, you will need to contact each of the three credit bureaus separately and mail them the requested information. These requests usually include a copy of your Social Security number, Driver’s license and proof of residence.

You will also need to send a copy of your police report and/or your Affidavit, plus any other information that the credit bureaus request. We recommend sending these confidential documents over certified mail rather than standard so that you have proof of delivery. With so much private information in one envelope, the more safety precautions you take, the better.

Possible Costs:

- 3 packets certified mail: $24.303

- Copies- 31 pages: $2.002

Possible Time:

- 60 minutes on phone

- 60 minutes for 3 packets


Step 5: Order credit reports

You will want to verify that there is no other fraudulent information on your credit reports, so you will need to request a credit report separately from each of the three bureaus. If this is the first time you are requesting reports within a year, then the service will be free. You can request your free credit reports by heading to Otherwise, you will have to pay full price.

Possible Costs:

- $40* to order 3 from Experian7

Possible Time:

- 15 minutes to order

- 30 minutes to review each


Step 6: Request credit reports again, 90 days after resolution

Once the investigation is over, you should receive a letter from the card issuer stating that the crime has been resolved and your identity has been removed from the debt. Ninety days after you receive this letter, you should request your credit reports again to ensure that this information has actually been removed from your credit reports.

Possible Costs:

- $40* to order 3 from Experian7

Possible Time:

- 15 minutes to order

- 30 minutes to review each


By the end of this hypothetical situation, your total cost is $171.63 and the total time spent to resolve the issue is 9.25 hours. But if an identity thief was able to open one account, it’s likely the crook may have opened another—meaning you’re repeating many of these steps all over again. And these numbers only reflect some common expenses at national averages.

The Fine Print

Identity theft is a complex crime, and a victim’s busy lifestyle only adds more obstacles. That means there’s a long list of potential expenses and time-consuming tasks involved in resolving the crime. When considering an identity theft protection service, try to remember all the small costs and tasks that might add up if you don't have protection, such as:

  • Time off work
  • Babysitters
  • Time spent on the phone
  • Mail expenses
  • Driving time (post office, police department, etc.)
  • Gas money
  • Faxing, scanning and/or copying
  • Additional fraudulent accounts
  • Complications due to credit deadlines and legality
  • Delays due to holiday hours and scheduling


The Right Protection Offers Remediation

An identity theft alert system is a great feature for peace of mind. It can help consumers stay ahead of an identity thief. But what happens after the alert? What happens if an identity thief does cause damage to a member’s identity?

Most identity theft services offer both an alert system and remediation services. And those remediation services may cover some or all of the above expenses, as well as facilitate the process.

Before you buy, be sure to ask what happens if you do become a victim. Comprehensive protection should come with comprehensive remediation.

For more information about recovery steps, click here.

* Consumers can order free credit reports once a year

1 “2012 Identity Fraud Survey Report.” Javelin Strategy & Research. February 2012.
2 Average 6.37 cents a page. Dover-Sherborn Technology. Accessed 11/19/2012.
3 “Postal Price Calculator.” United States Postal Service. Standard Priority envelope from LifeLock to Best Buy headquarters in Minneapolis.
4 National average for minimum wage: $7.25. “Wage and Hour Division.” United States Department of Labor. Accessed 11/19/12.
5 Based off of the “Fuel Calculator” at Chevy Malibu is most popular car in US: National gas price average is $3.416.
6 Hartley, Eric. “Fees for court and police records vary—and L.A. city and county agencies charge far more than most.” 07/2/2012. Daily News Los Angeles. Accessed 11/19/2012.
7 3-Bureau Credit Report and Score. Accessed 11/19/12.

Federal Trade Commission. “Consumer Sentinel Network Data Book For January – December 2011.” February 2012.
Javelin Strategy & Research. "2012 Identity Fraud Report: Social Media and Mobile Forming the New Fraud Frontier." February 2012.

Editorial note: Our articles provide educational information for you. Norton LifeLock offerings may not cover or protect against every type of crime, fraud, or threat we write about. Our goal is to increase awareness about cyber safety. Please review complete Terms during enrollment or setup. Remember that no one can prevent all identity theft or cybercrime, and that LifeLock does not monitor all transactions at all businesses.

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