Mike:
This is a great way to handle this type of situation -- provided that you require the victim to file an identity theft report with his/her local law enforcement agency before you initiate your process. The victim should provide a copy of this report to you for your files regarding any crime (e.g., forgery) or related event (e.g., lost wallet) before you begin processing a claim.
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Dana Turner
Security Education Systems
danaturner@bankersonline.com
830-535-6500