New Law to Assist Victims in Fight Against Identity Fraud

A new law signed Friday by President Clinton promises to crack down on the growing crime of identity fraud.

The law helps bring closure to Laguna Niguel attorney Mari Frank’s two-year ordeal. Designed to stem one of the biggest and fastest-growing financial frauds in America, the law could benefit hundreds of thousands of people who, like Frank, suddenly wake up to learn that somebody else has been living their life.

The Identity Theft and Assumption Deterrence Act of 1998 recognizes people such as Frank as victims of a crime and, for the first time, gives them the right to file police reports and recoup their damages. It also stiffens prison sentences for impostors, making the crime of posing as another person for economic gain--as well as to hide criminal activity--a felony punishable with prison sentences ranging from three to 25 years.

And it appoints a federal agency--the Federal Trade Commission--to serve as an advocate for victims, helping them find the right law enforcement agency to prosecute their case and aiding their quest to fix the devastation that ID theft can wreak.

The law comes at a pivotal time, experts say. Although no one has precise statistics, everyone seems to agree that identity theft has become an epidemic.

The Secret Service, which tracks major ID theft cases, says the dollar value of cases it follows has nearly doubled in the last year. In fiscal 1997, identity fraud cost $745 million, versus $450 million in 1996. The Social Security Administration reported a threefold increase in improper use of Social Security numbers. Credit reporting firms say fraud inquiries have soared from less than 12,000 a year in 1992 to more than 500,000 today. Officials say the statistics are unscientific--based on anecdotal rather than systematic data gathering--and probably understate the problem, mainly because identity fraud can go for years before it’s detected.

Frank’s nightmare began late one night in 1996, when she got a call from the Bank of New York asking why she hadn’t made the monthly payment on her credit card. Frank didn’t have a credit card with Bank of New York. But her double--who looks nothing like her, yet took Frank’s background, her credit and even some of her business cards--did. The impostor also bought $50,000 in clothing and luxury items, plus a Mustang convertible, and charged it on Frank’s tab. The impostor, living in Ventura County 200 miles to the north, had been enjoying the high life for more than a year before the fraud was detected.

Fixing the damage required about 500 hours of time and cost $10,000, Frank says. Yet law enforcement officials, judges and others shrugged off her complaints.

Indeed, until the new act was signed into law, companies--not individuals--were considered the victims of ID theft. That’s because individuals were not held personally liable for the massive bills impostors ring up. Federal law states that consumers are liable for no more than $50 in fraudulent credit card charges if the fraud is reported promptly. In most cases, credit card companies absorb even the $50.

“The local police were nice, but they told me that I was not the victim--that the credit grantors would have to make the report,” Frank said. “Then I called the FBI and they said it wasn’t their jurisdiction; then the Secret Service, which said they only handled cases worth $200,000 or that were connected to a fraud ring. Finally, I called the Ventura police [in whose jurisdiction the impostor was located]. They only helped me because the watch commander had been victimized himself.”

Individuals whose identities are stolen suffer in many ways--the least of which is their ruined credit ratings. Some have lost jobs and promotions; some run up thousands of dollars in phone expenses trying to erase fraudulent charges and stop new ones; some end up with criminal records created by their impostors; others have even been jailed, according to Sen. Jon Kyl (R-Ariz.), sponsor of the bill.

Consider what happened to Bob Hartle, a Phoenix-based aerospace worker who was victimized by his mother’s next-door neighbor. Hartle’s impostor rang up $100,000 in debt, filed bankruptcy, had automobile accidents and speeding tickets, got hired and fired, and ran up tax bills, all in Hartle’s name. The impostor taunted Hartle, saying he would continue to impersonate Hartle--there was no law to stop him.

“He actually called me on the phone and told me that he was going to use my identity until he decided he didn’t want to anymore,” Hartle said. “He came out and told me that there was no law enforcement agency that was interested in his kind of crime and so I could never get him arrested. I hate to say it, but he was right.”

After calling virtually every law enforcement agency in the four states where the impostor was operating--and spending an average of $400 a month on long-distance calls--Hartle and his wife left their home in Iowa so they could be nearer the criminal and, consequently, be more effective fighting him. They finally got him arrested for falsifying documents.

The new law should make it easier to get police to take identity theft seriously and to get erroneous items eliminated from credit and police records.

Still, both Hartle and Frank, who have since written books to try to help people negotiate the maze of restoring their credit and erasing the impact of an impostor, believe that victims of ID fraud will continue to have a difficult time regaining their lives. And until U.S. privacy laws are tightened, more victims will emerge, Frank says.

“Identity theft occurs because of our lack of control over our personal information,” she said. “We don’t have any central place to go where we can view and correct our personal information, and yet it can be shot all over the Internet in a matter of seconds. Until we clean up our act and pass some privacy protections, this is going to continue. Even a thumbprint can be corrupted by a hacker, if it’s sent electronically.”