Identity Theft Has the State’s Number

Lawmakers sought advice Wednesday on how to prevent what experts called the fastest-growing crime in California and the nation -- an epidemic of identity theft.

The pervasiveness of the fraud was perhaps best illustrated by a San Francisco prosecutor whose credit card numbers were taken twice -- each time as he traveled to give speeches about preventing identity theft.

“Ironic, huh?” said Jerry P. Coleman, a San Francisco deputy district attorney who testified at a hearing of the Assembly Banking and Finance Committee. Coleman’s credit card numbers -- stolen at a hotel in 1997 and a restaurant in 1998 -- were used by a woman trying to buy $200 worth of cologne and a man who purchased a $3,000 case of cognac.

California has become a national leader in trying to stamp out identity theft, in which a thief uses a person’s Social Security number, date of birth or other forms of identification to open credit card accounts, charge purchases, take out loans or drain bank accounts. Last year, a law by Sen. Debra Bowen (D-Marina del Rey) made it illegal for businesses to display customers’ Social Security numbers. Another let Californians freeze access to their credit reports, effectively blocking banks and stores from issuing new credit to anyone who might try to use their name.

But identity theft appears rampant nonetheless. California ranks second in the nation behind the District of Columbia in the number of identity theft victims per 100,000 population, according to 2002 statistics compiled by the Federal Trade Commission. Nationwide, reports of identity fraud nearly doubled between 2001 and 2002, according to the FTC.

In Los Angeles County, where 11 local investigators work on identify theft, 12,600 cases were reported between 1999 and the end of 2002, said Sgt. Robert Berardi of the Los Angeles County Identity Theft Task Force.

Victims described agonizing months of dealing with police, banks and credit reporting agencies to try to restore their good credit.

Tracey Thomas, an Oakland computer programmer whose Social Security number was taken by a hospital worker in 1999, said she feels less anger toward the woman who racked up $15,000 in debt on her credit card than she does toward the banks that flood consumers with easy-approval credit card applications and the credit reporting agencies that make consumers fight for information about their own accounts.

“Why are they not taking even the simplest precautions that would prevent so much crime?” asked Thomas. She said she missed weeks of work and gave up hope of buying a home as she tried to restore her credit and help police catch the woman she called “my impostor.”

Thomas said credit card companies and retailers kept giving the “impostor” new credit even after Thomas had put a fraud alert on her credit report. The companies told her they are under no obligation to honor her warning of possible fraud.

That could change under a bill introduced by Bowen in December. The bill, SB 25, would require lenders to take extra steps to verify an applicant’s identity if a fraud alert appears on a credit report. It would also restrict how government agencies use the Social Security numbers that are a key to getting new credit cards or loans.

Lawmakers at the hearing expressed a willingness to draft bills to carry out other suggested changes in the law. That includes making the possession of various forms of another person’s identification a felony. Such a law, said Coleman, would help prosecutors target the waiter or hotel clerk who secretly records the electronic information on patrons’ credit cards, then sells it to someone who makes fake credit cards.

“What we need is a statute to get the traffickers,” he said.

Others suggested that the banks stop mailing consumers so many pre-approved credit card applications and do a better job of verifying that applicants are truly who they claim to be.

But officials with credit reporting agencies and banks put the onus elsewhere. They testified that the best way to stop identity theft is to teach consumers to safeguard their privacy and to boost law enforcement. They also touted various products, costing about $60 to $80, that notify consumers when an account is opened in their name or an inquiry is made about their credit.

“We’re investing heavily in consumer education,” said Tony Hadley, vice president of state government relations for Experian, one of three national repositories for consumer credit information.