All it takes is one
slip (of paper) for an identity thief to strike
You'll never see it coming.
An impostor steals your name and Social Security
number, opens bank accounts, rents apartments, buys cars, charges
up numerous credit cards to the hilt and disappears.
If you are one of the millions of people who
will be a victim this year of the growing crime of identity fraud,
the first clue will likely come in an embarrassing form. The grocer
will refuse your check. Your credit card will be declined. An angry
creditor will call.
Then begins the painful, time-consuming task
of clearing your name and convincing credit card companies, banks,
credit bureaus and collection agencies that you are indeed whom
you say you are.
"I carry the first page of the police report
at all times because I've been accused of being the impostor," says
Mari Frank, who learned she was an identity theft victim in August
An impostor ran up debts of more than $50,000
in her name. After 500 hours of phone calls, letters and not backing
down, Frank's credit was clean again by spring 1997. She has since
made fighting identity theft her crusade. As a privacy advocate,
Frank is on the advisory board to the Office
of Privacy Protection for California's Department of Consumer
"I'm pretty tenacious and I was very, very upset,"
says Frank. "It's really hard fighting the bureaucracies and trying
to prove who you are."
case a minute
It's a growing problem: Based on credit industry figures, there
are at least 500,000 new cases of identity theft each year. That's
about one a minute, estimates Beth Givens, director of the Privacy
Rights Clearinghouse in San Diego, Calif.
You do have some federal protections if a thief
gets hold of your credit card or debit card and goes shopping. Fortunately,
the immediate financial damage is limited to $50 per creditor if
a credit card is stolen. In most cases, creditors waive this sum.
Different laws surround your debit card. It's not
so bad if you act fast. Under the Electronic Fund Transfer Act,
your liability is capped at $50 if you notify your bank within two
days of finding out your debit card is missing. Wait more than two
days and you could lose as much as $500.
If you habitually stack bank statements and reconcile
at a later date, failing to report an unauthorized transaction within
60 days after if appears on a statement, your liability for the
loss is unlimited. You could lose everything in your checking and
So when it comes to fraud it's important to realize
don't have the same legal protections with a debit card as you
do with a credit card.
"If you own a deferred debit card, that's a signature-based
debit card with a Visa or MasterCard logo, get rid of it today,"
says Frank. Too many clients have been left with emptied accounts
trying unsuccessfully to have their bank cover the unauthorized
Clean-up is still a chore
Removing an impostor's misdeeds from your credit report is not any
easier today, even with increased awareness.
"It can take anywhere from eight months to several
years, depending on the complexity of your situation, the number
of credit accounts obtained by the impostor and the type of accounts,"
And checking your credit report once, emphasizes Givens,
is not enough. We tell victims that they must continue to monitor
their credit reports on a regular basis for years to come. Many
victims have told us that even though they thought they had their
credit report back to normal, fraudulent accounts reappeared because
the credit issuers sometimes re-reported them. Even though this
is a violation of federal law, it is still a common event.
It's a long, tough battle and until it's won,
victims often cannot qualify for mortgages or car loans. One victim
couldn't even rent a car. There's also the stress of dealing with
aggressive collection agencies.
"I've heard so many horrendous cases. They harass.
They do not believe the individual is a victim of identity theft.
They think the individual is lying," Givens says. "I've heard cases
where the collection agency threatens to take a person's house or
threatens to file a lawsuit."
Frank was helped greatly in her quest to clear
her name when police caught her impostor. Even though there was
no identity theft statute in California at the time, a police officer
was sympathetic to Frank's case. The reason? His wife was a victim
of identity theft and their credit was in ruins.
Frank was allowed to file a police report -- a
rarity then, because California law at the time decreed that the credit
card companies and banks to be the only victims, not the individual.
An officer sent to the address the impostor had given credit card
companies was able to search her home because she was already on probation.
Among the items found were a handgun and Frank's credit report, Frank's
business cards and a letter from a rental car agency demanding payment
for a damaged car.
Frank later figured out what had happened to
her. The identity thief worked as a paralegal in a Ventura, Calif.,
law office. Posing as a private detective, she had been able to
pull credit reports, including Frank's, from a small credit reporting
The impostor's punishment was two months in
a work furlough program and five years probation.
"I was very lucky," says Frank, a lawyer who
has written The
Identity Theft Survival Kit. "Only 10 percent of cases ever
find the impostor."
Because there are so many ways to swipe someone's
private information, such as a Social Security number, driver's license
number, credit card and bank account numbers, it's tough to find
the thief or even determine how it happened.
"It's an opportunistic crime rather than a targeted
crime, which means the thief grabs information from whatever source
they can," Givens says.
Here are some of the ways it can happen:
- Sticky Fingers: The most
obvious way to steal someone's identity is to snatch their purse
or wallet. Identity thieves also steal mail, swiping everything
from bills to pre-approved credit card offers.
- Dumpster Diving: Thieves
comb the dumpsters of banks, mortgage companies, auto dealerships,
restaurants and other businesses for credit slips and applications.
Many businesses fail to shred these documents.
"That just infuriates me," Givens says. "Lawsuits
are expensive. Shredders are cheap."
- Inside Job: Dishonest employees
tap into a company's personnel records, copying Social Security
numbers and other information.
- Skimming: Retail employees
who handle customer credit cards swipe a card twice -- once for
the purchase and once into another card-reading device. They take
the encoded information on the magnetic stripes and create new
- Shoulder-surfing: At ATMs
and phone booths, thieves will stand close enough to see PIN numbers
punched in by users.
- Application Fraud: An impostor
fills out a credit application in a victim's name and has it sent
to another address.
- The Grudge: Roommates, friends,
relatives and others with access to personal information ruin
someone's credit for revenge.
- The Internet: The thieves
set up phony Web sites with enticing offers for consumers.
Be careful about giving information to sites
you don't know. It's one thing if you know Land's End. It's another
thing if someone says, 'We'll give you a free vacation. Just give
us your credit card number and Social Security number.'
While the vast information available online
makes all our lives easier, it also helps thieves. There's
certainly more information and access to information than there
was -- even things like public records. Now you can sit at your
computer and pull all that up.
Identity theft is growing rapidly, says Frank, because
it is too easy to access consumers' sensitive information. The burden
for reducing identity theft falls back on the financial industry
-- the banks and credit issurers -- and businesses to change their
inside practices. They need to examine how they store and access
it happens to you
What should you do if someone has stolen your identity?
- Contact any one of the three
major credit-reporting agencies. The agency you call will
automatically notify the other two agencies. This will trigger
an automatic "fraud alert" to be placed in each of your
credit reports. This alert notifies creditors to call you for
permission before any new accounts are opened in your name. Not
all creditors pay attention to these alerts. You need to stay
vigilant for new account openings.
- Contact creditors for any accounts that have
been tampered with or opened without your knowledge. Be sure to
put complaints in writing.
- File a police report. Document as much as
possible. Send copies to creditors and credit bureaus as proof
of the crime.
- Report the fraud to the Office of the Inspector
The Identity Theft and Assumption Deterrence
Act of 1998 makes identity theft a federal crime with penalties
of as much as 15 years in prison. Using
the information itself is now a crime.
In addition, nearly all states have now passed identity
theft statutes, except Colorado, Vermont and the District of Columbia.
These state laws, however, vary widely, explains Beth Givens. Some
are felonies with fairly strong penalties, a few are misdemeanors
and some, like California's, take the "wobbler" approach
- it's a misdemeanor or felony depending on the extent of the crime.
- Contact the FTC.
While federal investigators only tend to pursue larger, more sophisticated
fraud cases, they do monitor identity theft crimes of all levels
in the hopes of discovering patterns and breaking up larger rings.
Fill out the ID
make copies and send to all the creditors and the credit-reporting
- Change account passwords. Avoid using your
mother's maiden name or the last four digits of your Social Security
number as a personal identification number.
"If someone's committing identity theft against
you, they may well already have your mother's maiden name," Givens
says. "Pick something they can't find out."
In extreme cases, you also may be able to obtain
a new Social Security number. The federal government will, grudgingly,
issue a new Social Security number in circumstances when the old
number has been obtained by someone else, resulting in either harassment
or persistent cases of fraud. Contact your local Social Security
field office for details, or read
the rules from the Office of the Inspector General.
More tips for fighting back against identity
theft are available from the FTC's Consumer
Alerts bulletin, Privacy
Rights Clearinghouse, Public
Interest Research Group, California
Public Interest Research Group and from Frank's Web site, Identity
Theft Prevention and Survival.
The FTC has extensive identity theft information on
for Consumers Web site.
To minimize your chances of becoming a victim of identity fraud,
consumer experts recommend the following actions:
- Get a credit report at least once a year and clean
up any errors. Here's how
to read and understand your credit report.
- Buy a shredder and destroy bills, pre-approved
credit offers and other documents with personal information before
throwing them out.
- Stay on top of your finances, especially bill due
dates, so you'll know if a bill's missing.
- Carefully monitor your bank accounts and reconcile
your checkbook regularly.
- Know your bank's policies regarding account errors
and loss. Read the fine print.
If you miss a credit card bill, rather than
simply celebrating, check to see if it was mailed out. Monitor your
your Social Security number. Only give your Social Security
number when absolutely necessary. Avoid using it as your account
number whenever possible. If merchants demand it, ask for an alternate
number -- and take your business elsewhere if they insist on writing
it on your check. Don't carry your Social Security number and
driver's license together in your wallet.
"I don't think it's paranoia. It's cautiousness.
Once it happens to you really have to be on the alert," says
Frank. "It becomes a lifelong vigil in protecting your good
name and credit."
-- Updated: April 25, 2003