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identity theft

Identity Theft

The Better Business Bureau of Metropolitan New York defines identity theft as occurring ". . . when someone uses your name, Social Security number, credit card number or some other piece of your personal information to apply for a credit card, make unauthorized purchases, gain access to your bank accounts or obtain loans under your name."

People's identities are being fraudulently stolen from them every day. The television networks are continuously running special reports alerting people about identity theft. Unfortunately, a large portion of the public remains naive as to how to monitor and protect their credit and identity. To help make sure you're not the next victim, protect your personal information, reconcile your monthly charge account statements and search for fraudulent charges. Most importantly, it's imperative to obtain a copy of your credit report on a regular basis to monitor for unauthorized address changes and fraudulent account information. To make things easier for you, you can also simply subsribe to a credit report monitoring service that will keep you informed of any credit activity.

New research shows that identity theft is more prevalent offline with paper than online. Victims of identity theft don't normally know they've been victimized until:

  • They are contacted by a collection agency over past due accounts they never knew they had;
  • Significant charges show up on a credit card bill for purchases they never made;
  • A lender tries to repossess a car they didn't know they owned;
    They are contacted by the police after a crime is committed in their name.
Identity theft is no longer an unusual occurrence. According to a September 2003 survey by the Federal Trade Commission, 27.3 million Americans have been victims of some form of identity theft within the past five years, including 9.9 million people in 2002 alone. According to the survey, 2003's identity theft losses to businesses and financial institutions totaled nearly $48 billion and consumer victims reported $5 billion in out-of-pocket expenses.

One surprising finding - in half of the cases where the perpetrator is known, identity fraud is committed by someone close to the victim. The 2005 Javelin Identity Fraud Survey Report - released by the Better Business Bureau and Javelin Strategy & Research as an update of the Federal Trade Commission's 2003 Identity Theft Survey Report and Javelin's 2003 Identity Theft Report - shows that despite growing fears about identity theft and online fraud, of the victims that know the identity and method used by the criminal, these crimes are more frequently committed offline than online. Internet-related fraud problems are actually less severe, less costly and not as widespread as previously thought.

The Federal Trade Commission 2002 annual report detailing consumer complaints about identity theft and listing the top 10 fraud complaint categories reported by consumers. As in 2000 and 2001, identity theft topped the list, accounting for 43 percent of the complaints lodged in the FTC's Consumer Sentinel database. The number of fraud complaints jumped from 220,000 in 2001 to 380,000 in 2002, and the dollar loss consumers attributed to the fraud they reported grew from $160 million in 2001 to $343 million in 2002.

According to the Director of the FTC's Bureau of Consumer Protection, J. Howard Beales III, the increased numbers of complaints from 2001 to 2002 had several possible explanations. "One of them has to do with the success of our outreach efforts - that is, more people know where to complain about fraud and ID theft. That's important because more complaints give us a more complete picture of the types of fraud that are occurring, the characteristics of fraud victims, and the companies that are appropriate targets for law enforcement," he said.

Identity Fraud - Identity Theft Complaints in 2002

"Another explanation - or another part of the explanation - has to do with the increase in the number of partners to Consumer Sentinel who contribute and use data for enforcement purposes," Beales said. Forty percent of the complaints in the Sentinel database come through data contributors like the Social Security Administration's Office of Inspector General, the Internet Fraud Complaint Center, the National Consumers League's National Fraud Information Center, and many, many Better Business Bureaus around the country, Beales said.

The FTC recommends certain measures for consumers, such as shredding financial documents and giving out Social Security numbers judiciously. But law enforcement officials say the most serious identity theft is driven by insiders who have privileged access to the personal information - full name, date of birth and Social Security numbers - necessary to assume someone's identity.


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