There’s a mixture of activities that should not be mixed. Would you want your bank selling your name and good reputation to retailers? Would you want the same institutions that track personal credit histories to
market personal information
to other companies?
Probably not. But that’s what they do. The lines between e-commerce, Internet-based financial services, banking, selling and buying have all blurred. Everything is computer-based, and everything is streamlined to a nine-digit number that puts you in a vulnerable center. It’s no wonder that banks, credit bureaus and credit card companies don’t like to talk about ID
theft. They’ve been part of the problem.
Credit bureaus should be required to notify people
when someone accesses their file or they receive a
bad credit report. But few states have adopted such
needed reforms.
Only Colorado requires credit agencies to advise consumers of new bad-credit ratings. California lets people freeze their credit reports, preventing access to their files without permission. And only six states have taken the modest step of letting individuals get one free
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copy of their credit report a year. Congress has failed to enact any of these measures.
W H A T C O N G R E S S I S D O I N G
So, what
is
Congress doing? Federal legislators have been slow to react to the problem. New legislation, which, among other things, would impose limits on the misuse of personal information and prohibit the unauthorized sale or display of Social Security numbers to the public, have been introduced but not passed. Combating identity theft will require a
multi-pronged approach
at the local, state and federal level, including the FTC, the Secret Service, the Postal Inspection Service, the FBI, the Office of the Inspector General of the Social Security Administration, the IRS’s Criminal Investigation Division, as well as a range of other state and local agencies.
Congress passed the first federal law dealing with ID
theft in 1998 called the
Identity Theft and Assumption Deterrence Act
, which we’ll go over in more detail in Chapter 6. This statute has a sweeping substantive breadth that reaches all identity thefts that have a federal interest—even those involving state law felonies. But it still lacks the punch consumers really need.
Violations of the Identity Theft and Assumption Deterrence Act are investigated by federal agencies
(e.g., Secret Service, the FBI, etc.). The Department
of Justice prosecutes the cases, usually through one
of the U.S. Attorneys’ offices.
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W H Y I D T H E F T H A S B E C O M E S U C H A P R O B L E M
California passed the first law to thwart identity theft in 1999. It prohibits businesses from printing more than the last five digits of an account number. The law applies to any new cash register. Existing registers must be in compliance by January 1, 2004. The law provides an exception for transactions in which the sole means of recording a person’s credit card number is by handwriting or photocopying the card. Other states are following, but the U.S. government is considering legislation on the federal level.
Laws take time to get introduced as bills, passed into law and then enacted. One problem related to ID
theft involves the
statute of limitations
, which is often based on the date of the criminal occurrence rather than date of discovery. ID theft takes a long time to emerge…and a long time to investigate. The gap between the criminal act and its discovery also allows offenders to cover tracks and destroy information that may otherwise prove invaluable to the investigative efforts.
In addition to a
lack of resources
as it relates to unraveling the complex underpinnings of an investment or securities fraud, criminal cases are not being brought because state and local law enforcement and prosecutorial agencies lack the technology and training to investigate and prosecute them effectively.
The U.S. Attorney General has announced that combatting the problem is a two-pronged step: 1)
instigate a coordinated, nationwide sweep to prosecute cases involving ID theft; and 2)
develop new legislation to enhance the penalties for ID theft.
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C H A P T E R 1
In Chapters 6 and 7, we’ll detail the
laws and agencies
available to protect you. You’ll get a better understanding of the Fair Credit and Reporting Act, the 1998 federal Act, as well as a list of agencies that will respond to you in a case of ID theft.
P R E V E N T I O N S T A R T S W I T H Y O U
There are many ways to prevent ID theft, and it’s important to incorporate as many theft-prevention tactics into your life as possible. It requires a level of
lifestyle alteration
. You can’t simply run to Staples, buy a shredder and start shredding all of your junk mail and bank statements. You can’t remove your Social Security card from your wallet and assume that keeps your number safe.
Protecting your identity is much more than that.
Preventing ID theft today—in the age of the Internet
and digitization—requires an array of changes at
home, in the workplace and even among friends in
large gatherings.
Later on you’ll learn the mechanics of ID theft, the specific ways to prevent ID theft as well as how to incorporate those practices in your daily life. The key is to
prevent the theft
from happening in the first place, rather than dealing with it once it has occurred.
The most important tool you can have to prevent ID
theft is
common sense
. Until government catches
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W H Y I D T H E F T H A S B E C O M E S U C H A P R O B L E M
up with laws to prevent theft, aid victims and prosecute thieves, you need to rely on your own tactics first. You have to hope that the minimum-wage input clerk who processes your application for a grocery store check cashing card doesn’t get greedy. Or that the minor federal functionary who files your son’ application for college financial aid doesn’t get too interested in the data on your form. Or that the person working the Help Desk at an office superstore doesn’t decide to sell a crook the codes to access consumer credit reports that contain the information needed to assume your identity and destroy your finances.
Later in this book (Chapter 10), you’ll find a chapter on lifestyle changes that you should follow and checklists (in Chapter 11) for everyday living.
I N T H I S B O O K
In the next chapter, you’ll learn that no one is immune to identity theft. It can happen to you.
This book gives you the tools for
making lifestyle
changes
in your daily routines in order to prevent identity theft. It also give you the tools you need to tackle an identity theft problem should you face one in the future. You’ll find real-life examples of people like you who’ve become victims…as well as profiles of the most pernicious thieves.
Also included in this book is information about how IDs work, from your Social Security card to your military discharge papers and driver’s license. The mechanics of ID theft will be explained in detail; as well as the effects of immigration on identities and the horrific role terrorists have played in the growing prob-2 2
C H A P T E R 1
lem; and the laws and agencies available to protect you.
In the end, you should feel better equipped to go about your daily transactions without too much worry.
Getting
peace of mind
when it comes to any hassle in life—like identity theft—is about being a smart and aggressive consumer.
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W H Y I D T H E F T H A S B E C O M E S U C H A P R O B L E M
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C H A P T E R 2
2
YOU…NO MATTER
WHO YOU ARE
You can be rich, famous, a struggling middle-class unknown with major debts to pay off or a college student who has had a credit card for only a few weeks and be a victim of identity theft. You can be a two-year-old in diapers or an 86-year-old with false teeth and no memory. You could even be dead.
Because the world has become so electronic and automated, identity theft has become a crime that’s enabled by computers, databases and the
impersonal
nature of transactions
these days. Consider: •
The increased
availability of goods or
services
that can be obtained on credit; and
•
The
proliferation of computer technology
in our society that provides easy access to the information needed to commit many financial crimes, as well as a means for committing them remotely.
The personal identifiers most often sought by criminals are those generally required to obtain goods and services on credit. These are primarily Social Security numbers, names and dates of birth.
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I T C A N H A P P E N T O Y O U … N O M A T T E R W H O Y O U A R E
When you enter a bank, post office, grocery or corner five-and-dime store,
no one knows you
. You’re a stranger whose ability to make transactions and purchases is often tied to a number—a credit card or bank card (if not cold hard cash). You are identified by the plastic cards you carry—your driver’s license, club cards, credit cards and passports…instead of your recognizable face, reputation and family name.
Too many people think that they are too poor or in too much debt to ever become a victim of identity theft.
Why would someone want to impersonate me? I don’t
have any money. I don’t own a home or a fancy car. I can
hardly afford to make the minimum payments on my credit
cards….
When an Ohio college student applied for her first credit card upon starting school, the woman was surprised when she got turned down. Someone had already opened four credit cards in her name and racked up $50,000 in debt. That someone was her own father.
Parents who’ve botched their own finances are increasingly tempted to dip into their children’s credit.
As co-signers, all they need is a birth date and
Social Security number. Some parents put bills—
cable, TV, utilities—in their kids’ names.
The student knew her father was struggling financially after his divorce from her mother and the failure of his restaurant. And, typical of many victims of identity
fraud by family members
, she didn’t want
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C H A P T E R 2
to file a complaint against her father. So she persuaded him to consolidate the $50,000 credit card debt and pay it off by having his wages garnished.
Meanwhile, she had $30,000 in student loans of her own. She worried about her future—her ability to buy a car, get an apartment and meet a man who’d want to be with someone with $80,000 debt.
People between the ages of 20 and 40 are most
vulnerable due to their relatively high usage of electronic payment channels.
A L L I N T H E F A M I L Y
Family members are an
attractive target
for identity thieves. Spouses have extensive access to each other’s documents and personal information, and family members are frequently in each other’s homes unsupervised. In-house thieves, however, rely on another element: that they won’t get caught. These thieves hope that their family ties will protect them from law-enforcement. They assume, often correctly, that their victims won’t press charges or avoid a confrontation with others in the family.
In Morena Valley, California, Judi Woodward was devastated to learn that her sister, Janet Goodpastor, had stolen her identity and that of their Alzheimer’s-afflicted mother and used them to open fake credit card and utility accounts and forge checks. Woodward’s credit was ruined and her mother paid the steepest cost: She was
evicted from her house
, was unable
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I T C A N H A P P E N T O Y O U … N O M A T T E R W H O Y O U A R E
to pass a credit check needed to get into a nearby assisted-living home and had a warrant out for her arrest over the bad checks written in her name.
In the U.S., about 6 percent of identity theft victims
who contacted the FTC in 2001 indicated that the
person who had stolen their identity was a family
member.
Although you’re more likely to have your identity stolen by an opportunistic stranger, it’s not out of the question for a
family member to impersonate you
.
The hard part about being victimized by a family member is prosecuting. Do you sue your sister, brother or father for helping themselves to your good name and credit?
When it comes to
defining your family
, you need to be aware of people close to your family that might be able to access critical information about you. It’s not just about your family, either. Your home is full of paperwork and documents that anyone can use to retrieve the information for committing identity theft.
And they don’t have to be blood relatives.
Controlling access to your home includes controlling who enters and leaves on a regular basis
with your
permission
. An unscrupulous character might get to know you, get invited into your home or work in your home for a given amount of time…then later steal from you when you’re not looking. Think about:
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C H A P T E R 2
•
housekeepers;
•
security patrollers; •
gardeners;
•
repairmen (cable, phone, utilities, appliances, computer, plumbing, etc.); •
contractors
; •
decorators, landscapers; •
caregivers,
babysitters
; •
everyday deliverers (supermarket, drug-store, food, etc.); •
movers, installers; •
large item
deliverers
(appliances, TVs, furniture, etc.); •