An identity theft every 79 seconds

Boom: Thieves victimized 3.2 million people last year by stealing credit card numbers and other key data.

Your Money

January 18, 2004|By Lorene Yue | Lorene Yue,YOUR MONEY STAFF WRITER

When an errant item showed up on Chantal Perreault's banking statement in October, she thought it was simply a misdirected payment. But as the Las Vegas resident delved into the details of the $700 deposit, she found that she had become another casualty of identity fraud.

First there was the disputed banking deposit, then there were letters thanking her boyfriend for opening up credit accounts with J.C. Penney and Wal-Mart. A salesperson from Cingular called to find out why Perreault's boyfriend wanted to open two more accounts when he already had one with the cellular phone carrier.

"I now have fraud alerts on all three of my credit reports, and I filed `a complaint' with the Federal Trade Commission," she said. "It's very inconvenient."

Identity fraud is one of the fastest-growing crimes in the nation; one study claims there's a victim every 79 seconds. Experts say one out of eight Americans has been a victim in the past five years.

"It's bad, bad, bad," said Edmund Mierzwinski, consumer program director for U.S. Public Interest Research Group, a consumer advocacy organization in Washington.

Those stung by an identity thief usually get tangled up in trying to clear their name. Individual victims can spend up to 60 hours trying to undo the damage, according to Your Credit Card Companies, an ad hoc group of some of the largest credit card issuers.

"It's a nightmare," Perreault said. "I'm still cleaning it up."

Perreault isn't sure how thieves got her checking and savings account numbers, her Social Security number and driver's license information, or how they managed to ferret out the maiden name of her boyfriend's mother. She suspects information used to fill out a mortgage application found its way into dishonest hands since the fraudulent activity began the day after she and her boyfriend closed on their house.

Experts warn against crying foul over slip-ups. An errant credit card or banking account charge is not always identity theft. Identity theft occurs when someone poses as you by using your name, address, Social Security number and other personal information to obtain items such as credit cards, loans, driver's license and phone service.

Just how did roughly 3.23 million Americans become identity theft victims last year?

"It's not rocket science," Mierzwinski said. "It can be done with sophisticated gangs and it can be done by a high school dropout."

Thieves can get their hands on your personal information though advanced methods that include hacking into computer databases or by simply digging through your trash or stealing your wallet for personal information.

"Now when I go shopping, I don't even leave my receipts in the bags," Perreault said. "I ask the clerks to give them to me, and I put them in my wallet."

How to prevent identity theft

Protect your personal information such as credit card numbers and your Social Security number. Don't carry your Social Security card with you and keep the number off your checks and driver's license.

Review your credit reports at least once a year and check monthly financial statements for suspicious activity.

When paying your credit-card bill, put only the last four digits of your account on your check.

If you are a victim of identity theft

Contact your financial institutions and credit card companies and notify them of the situation. Close any accounts that have been opened fraudulently.

Call the credit-reporting bureaus and ask them to place a fraud alert on your credit report.

File a police report and contact the Federal Trade Commission at 877-438-4338 or at www.consumer.gov/idtheft.

-- Lorene Yue

A new law may help

Federal lawmakers are hoping the latest version of the Fair Credit Reporting Act provides a better shield in the war on identity theft, but the jury is still out.

Among some of the provisions in the new law:

Businesses must truncate credit card numbers on receipts.

Consumers are allowed to request a free credit report every year and have access to their credit scores.

A fraud-alert tag must be prominently placed on all credit reports of individuals who have been victims of identity theft.

Credit-rating agencies will be prevented from including fraudulent transactions when selling your credit report to other entities.

Medical information will be coded on credit reports and cannot be used for credit decisions.

Consumers will have only one number to call when reporting identity fraud or fraudulent activity instead of having to call all three major credit-reporting bureaus.

- Lorene Yue

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