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Identity thieves: let's catch them if we can: nearly 10 million Americans had their identity stolen in the last year, making it the fastest growing white-collar crime.

Sheila's nightmare began 11 years ago when she was only 19. A co-worker stole her Social Security number from her personnel file and used it to get a Mexican relative into this country. Using Sheila's name and Social Security number, the Mexican woman applied for welfare, opened credit card accounts, filed tax returns and got traffic tickets.

Sheila didn't know about the theft until she was 23 and tried to buy a car. Warrants were issued for her arrest because her identity clone had committed welfare fraud and child abuse.

If Sheila had been pulled over for a traffic ticket, she would have been hauled off to jail. So she lived in fear, essentially as a fugitive, because at that time, it was extremely difficult to get the warrants quashed. Through a lot of effort, Sheila cleaned up her credit as best she could.

But the nightmare didn't end. A 1999 credit report showed that new credit cards had been issued again to the other woman. Many of them were re-issued despite earlier defaults on the accounts.

Today, the woman continues to use Sheila's name and identity. But Sheila has a new Social Security number. It was granted because her identity theft case involved too many state, federal and local jurisdictions to investigate. Now, Sheila is working to get her records--high school and college degrees, driver's license, work history--transferred to her new SS number.

State legislators have heard Sheila's story and many more like it. To combat the growing crime, legislatures have enacted specific identity theft laws or expanded existing statutes. Penalties vary from misdemeanor to felony depending on the economic damage, the age of the identity theft victim and the number of times the perpetrator has committed the crime.

Congress in late November passed new legislation that protects consumers from identity theft, but which also pre-empts state laws in certain areas. Despite state and federal laws, ID theft continues to grow.


Prosecute more cases: "Banks and corporations have found it is easier to write off a loss than to prosecute it," says Frank Abagnale, a reformed identity thief who wrote Catch Me if You Can, which was made into a Leonardo DiCaprio movie. "Most district attorneys don't prosecute forged checks under $5,000. Most white collar crimes aren't prosecuted unless they top $250,000. The FBI doesn't investigate crimes under $100,000."

New Jersey, however, now prosecutes cases involving people who assume five or more identities, steal more than $75,000, and sell, produce or possess a fraudulent driver's license or government document. They are second degree crimes, with penalties of up to 10 years in prison and a $150,000 fine.

Increase penalties: Identity theft is a serious crime and offenders should be punished. "Stiffer penalties underscore the serious nature of this crime and the devastating impact identity thieves have on their victims," says New Jersey Assemblyman Nell Cohen. "The average loss from one identity theft is now about $18,000. The gravity justifies harsher penalties."

Let victims sue: In New Jersey, victims may recover up to three times the damages they suffered in a civil suit, plus attorneys' fees, court costs and any out-of-pocket expenses--such as copying expenses and postage while cleaning up their credit reports. Pennsylvania also allows victims to recover up to three times the actual amount of damages.

Inform people of the new federal protections to help victims clear their names: "People who are victims of this crime don't need the hassle of spending years and thousands of dollars trying to clear their records," says Michigan Senator Mike Bishop.

To help with this, the new federal law ensures improved accuracy of credit reporting procedures and sets up a one-call system for consumers to alert all the credit bureaus about identity theft. "Fraud victims should not have to jump through hoops or fight bureaucratic red tape just to clear up bad debts created by an identity thief," says New Jersey Assemblywoman Linda Greenstein.

Make it easy to report the crime: Identity theft often occurs across many different jurisdictions, and victims may not know which law enforcement agency will help them. They need a way to file reports either with their local police department, the state department of justice or the state attorney general. Illinois, Louisiana, Minnesota, Mississippi and Utah have authorized additional law enforcement agencies to take victim reports and begin investigating the crimes.

Limit the availability of personal information: Restrict government agencies, including public colleges and universities, from posting or displaying Social Security numbers on information sent in the mail or used on identification cards.

"If you don't want your home broken into, you lock the doors and get an alarm system. You don't leave the key in the lock and post directions to your home on the Internet. This is basically what people who have to carry their Social Security number around on their employee, student or MediCal ID card are forced to do," says California Senator Debra Bowen. "Eliminating identity theft isn't easy, but taking Social Security numbers and other sensitive personal information out of circulation will reduce the odds that people will have their lives turned upside down by an identity thief."


Identity theft ruins lives. People whose identities are stolen may be denied loans, housing, education, job opportunities and even get arrested for crimes they did not commit.

Identity theft is pervasive. Consumers and businesses need to be proactive in protecting personal information. The fight against ID theft will require policymakers, businesses and consumers working together to combat it through prevention and prosecution.


1. Prosecute more cases.

2. Increase penalties.

3. Let victims sue.

4. Inform people of the new federal protections to help victims clear their names.

5. Make it easy to report the crime.

6. Limit the availability of personal information.


1. Monitor the balances of your financial accounts.

2. Track what mail you receive or do not.

3. Order credit reports from the three major credit reporting bureaus.

4. Guard the use of your Social Security number.

5. Invest in a cross-cutting paper shredder.


Consumers can be proactive in protecting their identities. There are five important steps to take:

* Monitor the balances of your financial accounts. Look for unexplained charges or withdrawals.

* Track what mail you receive or do not. Failing to receive bills or other mail may signal an address change by an identity thief, as does receiving credit cards for which you did not apply.

* Order credit reports from the three major credit reporting bureaus. The new federal law allows consumers to get one free credit report a year and to purchase their credit score for a reasonable price.

* Guard the use of your Social Security number. When asked for it, ask why you need to provide it, how it will be used. Don't give it out if you don't have to.

* Invest in a cross-cutting paper shredder. Destroy credit card applications, checks, receipts and insurance documents. Shred any document that lists any identifying information about you. Cross-cutting shredders are best because they make confetti as opposed to straight shredders which make strings that can be easily pieced back together.


The Federal Trade Commission and Synovate surveyed more than 4,000 people in 2003 to estimate the incidence and measure the effects of identity theft on victims. This is what they found:

* 4.6 percent discovered they were identity theft victims in the past year. This suggests that nearly 10 million Americans found out they were victims of identity theft in the last year. Nearly 13 percent were victims of ID theft in the past five years.

Copies of the report are available from the Federal Trade Commission at: os/2003/09/synovatereport.pdf.

The Identity Theft Resource Center surveyed identity theft victims to quantify the time, dollar and emotional costs of the crime. They discovered:

* Victims spend an average of 600 hours to resolve identity theft problems.

* Only 15 percent of survey respondents uncovered the theft through a creditor reporting unusual activity or verifying an address.

The study, "Identity Theft: The Aftermath 2003," is available at

ID Analytics reviewed more than 200 million credit records and found:

* The total direct financial business loss from identity theft to date is $1.07 billion.

* Identity theft occurs at least eight times more than what is reported by businesses.

* Most lenders catch a portion of attempted identity fraud applications with the current fraud detection methods used in their credit decision making process.

The study can be purchased from ID Analytics at

Heather Morton tracks identity theft and credit fraud for NCSL.
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Author:Morton, Heather
Publication:State Legislatures
Geographic Code:1USA
Date:Jan 1, 2004
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