Last year 9.9 million Americans were identity theft victims. That's an increase of 22 percent over 2007, according to the 2009 Identity Fraud Survey Report released by Javelin Strategy & Research, which specializes in financial services topics. The report notes one significant factor likely contributing to the rise in economic misfortune - historically higher fraud rates occur when the economy worsens.
The average time it takes to restore an identity once it's been compromised is 264 hours, says Tom Stone, the executive director of the FBI Law Enforcement Executive Development Association (FBI-LEEDA). Identity theft also is expensive. Financial institutions and businesses lost more than $48 billion last year while individuals lost $5 billion.
There are other costs as well. One woman became a victim of identity theft 10 years ago and did everything she could to straighten out "her" bad credit scores. When she finally was able to get a loan to purchase a new home, her mortgage interest rate was higher because of her low credit score. Every month she writes a check for her mortgage she's paying the price of identity theft. With identity theft, victimization doesn't seem to end.
Investigators are now seeing many victims, who after getting their credit straightened out and recovering their good name, are targeted again.
Identity theft summits
Taking a proactive approach to the problem, FBI-LEEDA along with LifeLock, an identity theft protection company, is hosting identity theft summits with a 6-hour session for law enforcement followed by a town hall meeting open to the public. The summitshelp educate law enforcement both as consumers and officers taking on this rapidly increasing problem.
Stone, a retired police chief and officer with 33 years of experience, advises, "You must be acutely aware that this crime is going to have a huge effect on your community. You need to train your personnel and try to come up with the resources to address it when it takes place … and when people in their community become victims."
Local, state and federal law enforcement professionals (often from fraud units) have attended these summits throughout the country. More are on the calendar this year, at least one per month, and Stone anticipates about 20 will be scheduled for 2010. (See "Training" at www.leedafbi.org.)
Gregory Smith, chief of investigations for the Nevada Attorney General's Office, notes networking was one of the biggest benefits of the Las Vegas summit, where 20 agencies were able to exchange ideas.
LifeLock CEO Todd Davis is enthusiastic about private and public enterprise working together to help end identity theft.
"We have the chance to win this war," he says. "If we collectively work together, these criminals are going to understand that not only are we making the crime more difficult to commit, they're going to have a better chance of getting caught, and as we work with legislatures there will be greater penalties."
It can happen to anyone
Fully understanding identity theft means understanding that it could happen to you. Everyone with a Social Security number can become a victim - even children. It doesn't matter what your credit rating is. It doesn't matter if you're a law enforcement officer.
Harris County Sheriff's Office Capt. Debra Schmidt, who helped host a recent summit in Humble, Texas, was a victim of identity theft two years ago. She received an e-mail congratulating her on buying a new watch. The e-mail text said, "If you didn't buy a watch, 'click here,'" so she did. That's all it took for her personal and bank account information to be stolen.
"Fortunately, when I told a friend about it the next morning, she told me I had been robbed of my identity," she says. "I immediately took steps to secure my bank accounts and identity. Here I was a veteran officer and just a click away from being a victim."
It also happened to summit keynote speaker and Resident Agent in Charge Robert "Wayne" Ivey (who does not disclose which agency he works for while speaking on behalf of LifeLock). A 27-year veteran of law enforcement, Ivey has coordinated a statewide identity theft task force and has spoken before Congress on the topic. But none of his experiences could have prevented him from becoming a victim. After using a debit card to purchase a golf bag, Ivey discovered his card had been used to fund $500 worth of 900-number phone calls. Because Ivey made the discovery a couple of days later when he was at the bank, he had a good idea who had been using his card number. Later, when the young man who had sold Ivey his golf bag was arrested by Ivey's partner, they learned the young man was responsible for $20,000 in credit card fraud and ID theft - but no other victims had reported their losses to law enforcement. The victims had each seen a transaction on their credit cards that they didn't make and reported it to the financial institutions, which just got rid of the charge. Because they weren't hurt, they didn't report it to police.
A simple crime
Identity theft today is both a high-tech and low-tech crime.
Waiters are still stealing credit and debit card numbers by using skimmers (special storage devices that copy data from the magnetic strip on the back of a card). More skimmers are being found on ATMs and gas pumps. Phishing scams (fraudsters e-mail spam or create a pop-up message to try to get information) and data breaches are also prevalent.
Years ago identity theft was more opportunistic and isolated, Davis says. Now people target thousands of victims at once and don't even use your ID - they sell your data to other identity thieves. Organized crime and even terrorist organizations have gotten involved, and the crimes span internationally.
Since September of last year, Davis says, identity thieves are more likely to be people who lost their jobs and feel desperate. Just from September to the end of 2008, the number of people searching the Internet for personal information jumped 38 percent, he says. By comparison, the number of people searching for personal information had been steadily climbing year after year by 8 percent.
Smith points out a lot of people don't realize how close to home an identity thief can be. He's not always a stranger sitting behind a computer hacking away. It's often someone you know, maybe a neighbor using a wireless connection to see what's on your computer or a family member taking your identity.
"We've seen the gamut," he says, "We've seen fathers take their child's ID because they've got warrants."
However you look at it, identity theft is an easy crime. Davis envisions the wording of a fictitious identity theft recruitment poster: "'Only 1 in 700 of us ever get convicted.' You can sit at home with free software, start stealing identities and turn them into money from the convenience of your couch."
How do we stop it?
The question is, "How do I protect myself from being a victim?"
"Some people will say, 'It sounds like I should just carry cash.' If you carry cash, now you're exposing yourself to potential armed robbery or theft, or losing your money with no way to recover it," Ivey says.
A lot of crimes impact us, but none at the rate that identity theft can when you compare the rate of acceleration and the volume of people it's impacting. It is affecting retailers and financial institutions, and being passed along at many levels.
"People have to be cautious," Ivey says. "We take precautions to protect our material possessions; we have alarm systems on our homes or our cars, or we ask the neighbor to watch our house while we are on vacation. What steps are we taking to protect our good name and/or good credit, which is how most of us got our house and car? There is no 100 percent guarantee that you're not going to be a victim. But, we try to encourage everyone to take the preventative measures that put a step between them and the identity thief."
One such step is fraud alert. Also, businesses, including doctor's offices, need to be responsible with our information.
"You can probably tell me right now where your Social Security card is," Ivey says. "But can you tell me everywhere your Social Security number is? It's everywhere."
People aren't shredding the documents they should be, they're not using locked filing cabinets, and they have no breach protection on their computers, Ivey says. That lack of responsibility with information is causing an acceleration of identity theft, he says.
Steps that the Federal Trade Commission suggests taking to make identity theft more difficult include:
- Protect Social Security numbers
- Treat trash and mail carefully
- Be on guard when using the Internet
- Select intricate passwords
- Verify sources before sharing information
- Safeguard purses and wallets
- Store information in secure locations
"We have to make it difficult to turn identities into money," says Davis. "Law enforcement shouldn't feel like they're fighting this crime alone; if everyone took the necessary precautions, he says the crime would go away as there would be nothing to steal.
Davis is a case in point. He puts his Social Security number front and center at LifeLock.com. The tactic sounds crazy until you understand the measures he's taken to protect his identity. Using LifeLock, he protects himself by establishing fraud alerts, monitoring his credit reports, freezing his credit and blocking pre-approved credit offers. Thousands of people try to set up accounts using Davis' Social Security number. Most fail, however one person was able to obtain a payday loan. Last year, about 800,000 people were so impressed that they signed up for LifeLock's protective service.
"You don't have to purchase identity theft protection to take action, but you do need to do something," Davis explains.
Awareness is key. As Schmidt says, "If we can educate our officers who, in turn, can educate the public, we can make a difference."
Smith frequently addresses the senior community. Being proactive and educating the public is essential among senior communities, he says, because they often have money, great credit and are trusting.
"Protect yourself and your community," Ivey says. "It's not a matter of if this could happen to you. It's a matter of when - especially if you don't take steps to prevent identity theft."
"The FTC’s Web site is a one-stop national resource to learn about the crime of identity theft. It provides detailed information to help deter, detect and defend against identity theft. Visit ftc.gov/bcp/edu/microsites/idtheft to access this resource.
"LifeLock, a proactive identity theft protection agency, has a free speaker series to educate consumers (including senior citizens, college and high school students, businesses and law enforcement) on the threats of identity theft and their individual points of vulnerability. E-mail email@example.com for more information.
Rebecca Kanable is a freelance writer specializing in law enforcement topics. She can be reached at firstname.lastname@example.org.