Identity Theft: Not Dead Yet

Posted by Mark Brousseau

An interesting article from Fairfax Connection on the resiliency of identity theft crooks:

What’s in a Name?

Though national statistics are trending downward, millions of Americans still at risk for identity theft.

By Derek B. Johnson/The Connection
Wednesday, October 08, 2008

In nature, the early bird gets the worm.

Residents going through their bills one day and finding thousands of dollars worth of mystery purchases would be wise to follow a similar mantra: the early bird gets his identity back.

That is, at least, according to retired investigator Tom Polhemus of the financial crimes section of the Fairfax County Police Department. The sooner you act once you know your identity has been stolen, the more hours you save down the road dealing with police, banks, credit unions and bill collectors.

"The main thing that we advocate is you have a personal responsibility to keep on top of your own identity," said Polhemus. "You can’t expect the government, police or financial institutions to help you. If you don’t know, you don’t know."

Though national statistics are trending downward, identity theft remains one of the most prevalent crimes in the country. According to surveys conducted by the Federal Trade Commission and Javelin Strategy and Research, 8.4 million Americans reported being a victim of identity theft in 2007, with just over $50 billion being stolen. Those numbers were down significantly from previous years, with 10.1 million Americans in 2003 and 9.3 million Americans in 2005 reporting the same crime. However those statistics do not take into account victims who are unaware their identity has been stolen, and many cases may go unreported for months or even years until a victim hears from an out-of-state bill collector or a business looking for payment. Tammy Nealy is the director of public affairs for Lifelock, an Arizona-based personal fraud protection company. For those people still carrying their Social Security card in their wallet or purse, she has a message.

"Stop. You’re going to get pick-pocketed," said Nealy. "You never think your wallet or your purse is going to be stolen, but it happens."

In addition to providing information and education on keeping personal information safe, her company charges a monthly fee to contact each of the three major credit bureaus and put a fraud alert on a client’s account. Nealy said a victim of identity theft could spend up to hundreds of hours talking with police, creditors and other institutions in order to restore their credit back to its original state. The mean resolution time per victim, according to the 2007 FTC/Javelin survey, was 40 hours.

THE PROBLEM has become so prevalent because thieves have so many ways that they can use just a few pieces of personal information to impersonate their victim. Polhemus named writing personal checks was as one of the worst practices a person can do if they want to protect their identity.

"Paper checks are terrible. It’s too easy once you write a paper check, now I’ve got your routing and account number," he said.

Those numbers combined with a cellular phone number or other pieces of information are usually enough to rack up thousands of dollars in online gaming or purchases. Seniors and children are at a higher risk for fraud or identity theft than others, according to Nealy. Because most young children lack any pre-existing forms of identification and parents rarely check up on their children’s credit report, their identities are ripe for use. A child’s age does not matter, she said, because most children have no previously established credit.

As long as a thief uses the information to beat them to it, most children won’t discover they were victims until years later, while they’re applying for their first loan or checking account. If parents begin receiving catalogs or magazines in their child’s name, that’s usually a red flag signaling that identity is being used by someone else.

"It may be cute, but it can be damaging. That means there’s a credit report for that child and bank has sold that information to a marketing company," Nealy said.

Seniors, she said, tend to be more susceptible to phone or e-mail scams, giving out personal information to people impersonating police or government officials. While she called a person’s Social Security number the "key" to all other information pertaining to a person, the truth is very little information is required to steal an identity. E. Hunt Burke, president of Burke and Herbert Bank and Trust Company, said his bank deals regularly with such cases.

"The thing we see the most is people taking advantage of the elderly customers" Burke said. He also cited phone and e-mail scams as the preferred method thieves use when dealing with seniors.

In the case of a customer who has become a recent victim of identity theft, Burke and Herbert Bank has a 24-hour phone line to call into and will immediately freeze an account when identity theft is reported. The bank also provides secure e-mail accounts to their customers for sensitive information.

There is very little in the way of "too much" when it comes to protecting your identity, said Burke.

"Every week there’s a new technology or scam. I saw stainless steel wallets the other day and thought that was silly, but people really do have devices in their pockets that can read the [credit] cards in your wallet," he said.

Polhemus said as long as a victim is diligent in keeping track of their credit reports and notify the police and creditors within 60 days of the theft, the amount of damage and liability will be drastically curbed. Wait too long, and a person may double or triple the amount of time spent clearing his or her name. Victims may even be on the hook for some of the costs.

"If you open up a bank statement, look at it and see fraud, call the bank. They will take care of you," said Polhemus. "If you know you’re busy or the statement is depressing you and you throw it in the drawer, you are responsible for paying for it. You’re on the hook for that money."

Because fraud and identity crimes rely heavily on rapidly changing technology, state and federal laws are still catching up to the practices being put in place by the criminals they’re hunting.

Using information taken from a mailbox in Virginia, a thief can run up bills in Georgia, Wisconsin, California or any other state. That severely hampers the ability of investigators at the county level, like Polhemus, from pursuing all but the most serious and costly identity crimes.

"Our criteria, the things that we look at before we investigate a case of identity theft, is, first off, do we have a Fairfax County resident without money? Then we look at likelihood of successful prosecution," he said. "We could subpoena records and find out who was making those calls, but we’re not going to extradite him from Georgia."

Nealy said credit agencies should face tougher fines and regulations when their databanks of personal information are lost or stolen. "If there was a requirement for third-parties to have certain protocols in place, that’s really going to hold these companies accountable for information," she said.