Identity theft threatens
millions of Americans
By Kirk Noonan (5/23/04)
Phil Baker became
a victim of identity theft, one of America’s fastest-growing
crimes, and he didn’t even know it — until a creditor
from a jewelry store called him at work to question why he was
delinquent on nearly $5,000 in purchases.
my identity went on a one-month, nonstop spending spree,”
says Baker, 31, who attends Portland Christian Center, an Assemblies
of God church in Oregon. “I don’t even know how
the person stole my identity.”
The thief rang up
nearly $40,000 worth of merchandise by using Baker’s identity.
Doing as experts recommend, Baker immediately took action. He
contacted the three national credit-reporting organizations
(Equifax, Experian and TransUnion) to place a fraud alert on
his name and Social Security number. He also filed a police
report. But the real work lay ahead of him.
Baker, who was in
the process of buying a house, spent much of his time during
the next month calling creditors, writing them letters and sending
them documentation in order to clear his name and clean up his
“You work hard
to maintain good credit and it gets ruined in the span of two
months,” says Baker. “Having to deal with all of
that while trying to buy a house was a hassle.”
one of an estimated 10 million people who have identities stolen
in the United States each year. Besides the time people spend
clearing their name, the financial costs of identity theft are
Businesses and financial
institutions lose an estimated $50 billion and consumers lose
$5 billion annually as a result of the problem. But there are
other costs, too. Some people have missed out on employment
opportunities or have been arrested for crimes they did not
commit. Others have been denied loans for cars, houses and education
because their credit was in shambles.
“This is truly
the crime of the century, and it is devastating,” says
Mari J. Frank, an attorney, consultant and author of The
Identity Theft Survival Kit.
“If it can happen to Oprah Winfrey, lawyers and doctors,
it can happen to you.”
According to Frank
and other experts, thieves rely on many strategies to lift identities.
It ranges from stealing a person’s wallet or purse to
skimming (using an electronic device to record data off of the
magnetic strips on credit cards) to complex telemarketing and
Internet scams that dupe people out of confidential information
such as passwords, addresses, Social Security numbers, and credit
card and bank account numbers.
Recently, an identity
thief pulled an elaborate scam known as “phishing”
by sending e-mails that appeared to originate from America Online.
In the scam, receivers of the e-mail were warned that their
account would be canceled if they didn’t respond. The
scammer went so far as to include links in the e-mail that led
to a fake AOL billing center where customers were asked for
While a truly determined
identity thief is difficult to stop, there are steps consumers
can take to minimize their risk. Frank advocates identity-theft
protection because many people have their personal data lifted
because the confidential information was within easy reach of
criminals. To make identity theft more difficult, Frank recommends:
Review your credit report at least twice a year.
Shred all important papers containing personal and financial
information, including preapproved credit applications in a
cross-cut type shredder.
Make sure not to throw anything away that someone could use
to “become” you.
Remove your name from telemarketing lists and preapproved offers.
Get personal checks delivered to your financial institution
— not to your home.
Do not put checks in the mail from your home mailbox.
Cancel all credit cards that you do not use or have not used
in six months.
Put passwords on all your accounts and do not use your mother’s
Don’t carry your birth certificate, Social Security card
or passport unless necessary.
Never give out personal information to a person you don’t
know who calls you at home or at work.
Do not put your Social Security or telephone number on your
Do not give your credit card account number on the Internet
(unless it is encrypted on a secured site).
Take your name off all promotional lists.
If you believe your
identity has been stolen, the Federal Trade Commission recommends
that you call the three major credit card bureaus and have them
place a fraud alert on your credit line. Victims also should
close all accounts that have been tampered with or opened fraudulently.
A police report should be filed, as should a complaint with
it would never happen to me,” says Baker. He was able
to buy his house, though identity theft made the process more
complicated than it would have been otherwise. “People
need to safeguard their information, because once they’ve
been victimized it’s too late.”