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Federal Trade Commission warns against 'growing tide of identity theft'

Identity theft complaints are soaring.

And a surprising number of the people being ripped off know the people who are doing it to them.

The Federal Trade Commission received over 160,000 identity theft complaints, accounting for 43 percent of all consumer complaints in 2002. The Federal Trade Commission's Consumer Sentinel, a complaint database, collects information about identity theft and consumer fraud from the FTC and other sources, including the Internet Fraud Complaint Center, the National Consumers League and the Social Security Administration.

The FTC warns that there is a "growing tide of identity theft."

The fear of identity theft has gripped the public as few consumer issues have. Consumers fear the long-lasting impact on their lives that results from the denial of a mortgage, employment, credit or an apartment lease when credit reports are littered with the fraudulently incurred debts of an identity thief.

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An FTC breakdown of the calls from the past year shows that approximately:

  • 42 percent reported credit card fraud, i.e. a credit card account opened in their names or a "takeover" of their existing credit card accounts;
  • 22 percent complained that the identity thief opened up telephone, cellular or other utility services in their name;
  • 17 percent reported that fraudulent checks had been written on their accounts, a checking or savings account had been opened in their names, and/or unauthorized electronic fund transfers occurred;
  • 9 percent reported employment-related fraud;
  • 8 percent reported forged government documents and/or benefits paid out;
  • 6 percent claimed that the identity thief obtained a loan, such as a car loan, in their names.

It's not just strangers
The FTC's 2001 data also reveals information about the perpetrators. Although 87 percent of the caller-complainants did not personally know the identity thief, 68 percent provided some identifying information about the identity thief, such as a name, address or phone number.

The remaining 13 percent of the victims reported that they personally knew the suspect. They were either family members, friends, neighbors, roommates or co-workers.

But, an increasing number of identity theft is coming from inside sources, says Mari Frank, privacy advocate and lawyer who wrote The Identity Theft Survival Guide. "Disgruntled employees are obtaining sensitive customer information and either using it themselves or selling it," she says. "In these situations, victims can do nothing to protect themselves. The burden is on the financial industry and businesses to review their privacy policies."

Help from Washington
In addition to its toll-free consumer hotline (1-877-ID-THEFT), the FTC also provides an ID Theft Web site that includes tips on how to guard against identity theft and warns about some of the latest ID theft scams.

Callers who reach the hotline are advised to file a police report with their local law enforcement agency. "While filing a police report is a reactive response to identity theft, only a fraction of identity theft reports are investigated," says Frank.

But, she adds, "It's still an important step in restoring your good name and cleaning your credit report."

Victims are then advised to contact each of the three consumer reporting agencies to obtain copies of their credit reports. They are also briefed on their rights to have credit report errors corrected, limits on their liability for unauthorized charges and restrictions on the collection of debts they did not authorize.

"Not only will the creditor request a police report when a victim disputes a fraudulent charge on their credit card," says Joanna Crane, program manager of the FTC's Identity Theft program, "but credit reporting agencies will give the victim the benefit of the doubt and block the disputed information from their credit report while under investigation if they provide a police report."

Complaints received from victims of identity theft via the hotline or online complaint form are entered into the FTC's Identity Theft Data Clearinghouse, the federal government's database for tracking identity theft complaints. The data is available to law enforcement agencies across our nation.

"Typically identity thieves don't work only one area," says Naomi Lefkovitz, an attorney with the FTC's Identity Theft program. "The ID Theft Data Clearinghouse is a tool for law enforcement agencies to search for identity theft patterns and new schemes, coordinating their efforts with law enforcers in different jurisdictions."

 

-- Updated: Feb. 21, 2003
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See Also
One slip (of paper) for an ID thief to strike
A clean-your-credit worksheet
What to do if your identity is stolen
Personal and family finance glossary
More personal loan stories

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