Number 247 - December 2003

Identity Theft Rampant
by Ira Wilsker Golden Triangle PC Club From the November 2003 issue of the I/O Port Newsletter
Imagine that you are excited because you found that new car of your dreams. You know that you have always paid your bills on time, and credit has never been a problem. You fill out the credit application with the confidence that there is no way that you will not get financing. Imagine the shock when the lender denies your application because of unpaid credit card balances and loan defaults. Chances are that you have been the victim of the number one federal crime against individuals, identity theft.    Unfortunately, you are not alone. According to a report recently released by the Federal Trade Commission (www.ftc.gov) you are but one of an estimated 10 million victims of identity theft. In the Federal Trade Commission Identity Theft Survey Report (www.ftc.gov/os/2003/09/synovatereport.pdf), 4.6% of the respondents reported that they had found that they had been a victim in the past year. An astounding 12.7% said that they had been victimized at sometime over the preceding five years. The report indicated that in the past year 1.5% of us had new credit cards or other accounts issued to others in our names. While 1.5% may not sound like a large number, imaging how many people in our area would be affected at that 1.5% rate. Another 0.7% of us were the victims of having our existing non-credit card account numbers abused, and 2.4% of us had our existing credit card accounts used nefariously. Triple these numbers and you get approximately the number of victims over the past five years.    The dollar cost of this crime is staggering. In 2002 it is estimated that the amount of money or goods stolen by the false creation of new credit accounts in the name of each victim was $10,200, resulting in a total loss to businesses from this type of theft amounting to $33 billion. If the amount of losses includes the abuse of existing accounts, the loss swells to about $50 billion. The loss per victim of an existing compromised account is about $4800. The average victim of identity theft spent about $500 to deal with the experience of victimization, with victims where credit cards had been issued to crooks bore an average personal expense of about $1200. According to the FTC, total personal expenses of dealing with the consequences of identity theft were about $5 billion, with $3.8 billion being the cost of dealing with fraudulent new accounts. It is not just a matter of cost in dollars, but also a cost in time and aggravation. The average victim whose personal information was misused spent about 30 hours of time to clear up the mess, while it took an average of 60 hours of time for victims who had illicit credit cards issued in their name. This costs us collectively, as individuals, about 300 million hours of personal time to clear our names.	What may be possibly even more nefarious than being the victim of financial shenanigans is to be a victim of criminal misidentification. About 15% of identity theft victims had their name and identification used for nonfinancial reasons. About 4% of the victims had their name used by the perpetrator of a crime. There are anecdotal stories circulating in law enforcement circles of the innocent victims of identity theft being taken down in a felony traffic stop after being identified as "outstanding felony warrants" and "armed and dangerous", after the perpetrator used the victim's name in prior arrests. Imagine applying for a job that requires a criminal background check, knowing that you are "squeaky clean", only to be turned down because someone else has wracked up a record in your name.    If you feel that you may have been a victim of identity theft, contact your local police. In July, all law enforcement agencies in the country were provided training materials on identity theft by the Secret Service, along with brochures and other information for victims. According to the FTC report only about one in four victims reported the incident to law enforcement. Only about 22% of those who were victimized reported the incident to the credit bureaus. It should be noted here that all of the credit bureaus will post a "fraud alert" upon the request of the victim, making it more difficult for credit to be utilized by the perpetrator.    In about 25% of the cases the victim's identity was stolen along with their purse or wallet. About one-half of the victims have no idea how they became victims. While not in the FTC report, many of the new viruses and Trojans attacking our computers have the explicit ability to steal our usernames, passwords, credit card numbers, PIN numbers, banking information, and other highly personal and sensitive data. Fortunately for me, the firewall on my computer caught a Trojan attempting to send out some of my personal information, and alerted me to the attempt and allowed me to stop it. It was a new Trojan that had slipped by my just updated antivirus software, and was not listed by any of the major antivirus companies until the following day. There is always a risk that a new virus or Trojan can slip through even the best antivirus software, which is another reason that a firewall has become a necessity on our computers.    There is a comprehensive government website with identity theft and other consumer protection information at www.consumer.gov.    In a future column I will explain the steps in dealing with and preventing identity theft.
Number 247 - December 2003