Defend Against Identity Theft

In a report released this month, the Federal Trade Commission estimated that almost 10 million Americans were victims of identity and account theft last year, at a cost of more than $50 billion.

Identity theft is the fastest-growing white-collar crime in the United States. Its effect is devastatingly intrusive, deeply personal and long-lasting. Its victims often struggle for years with apathetic creditors and uncaring police to clear their names.

Identity theft is a crime in which someone steals a victim’s name and personal information, including Social Security number, credit card numbers or digital identification keys used to make ATM withdrawals and purchases on the Internet. The information is used to gain access to the victim’s bank accounts, write bad checks, obtain loans, make unauthorized purchases, apply for credit cards and open utility accounts. Once these accounts become delinquent, creditors transfer them to collection agencies. Collection agencies go after the victim. The victims’ loan applications are denied; they cannot rent an apartment because of their poor credit record. In some egregious cases, victims have been arrested for crimes committed by the identity thief.

Identity theft has become rampant for several reasons. First, personal information is floating in the public domain with negligible consumer protection. Identity thieves steal mail, sift through trash and scavenge information from the Internet. Technology and porous privacy laws have made buying personal information ridiculously easy. For as little as $65, one can purchase personal information, including Social Security numbers, on the Internet.

Second, the crime is very lucrative with negligible risk of getting caught. Fewer than two out of 100 cases of identity theft are solved. In the rare case when an identity thief is caught, penalties are minimal.

Third, police remain focused on violent and “traditional” crime and do not have the resources to combat identity theft. Furthermore, the cases are complex, time-consuming and require considerable skills and cooperation between law enforcement agencies.

In the Information Age, it is almost impossible to prevent identity theft. However, by using common sense one can reasonably guard against it. Carry a minimum number of credit and identification cards. Do not carry your Social Security card. Shred all the documents containing personal information before discarding them. Order a copy of your credit report from the three major credit-reporting agencies every year; check that it contains only accounts that belong to you.

Don’t leave your mail for the letter carrier to pick up. If you have not received your bills for a month or so, immediately call your creditors and verify that no one has changed the billing address. If you spend a lot of time on the Internet, invest in firewall software. If you become a victim of identity theft, immediately contact the banks and credit card issuers and have the accounts closed. Report the crime to law enforcement and insist that credit issuers also take action.

Even if you close the affected credit card accounts, it does not stop the thief from opening new accounts in your name. Call the fraud prevention department of each of the three major credit bureaus and tell it to flag your file as one belonging to a possible fraud victim. Do not pay any bill that is the result of identity theft.

If the creditors and credit bureaus do not cooperate with you, you should consult an attorney specializing in consumer law. Above all, be persistent.