Indiana radio station WIBC FM 93.1 is focusing on identity theft this week on their Morning News Program. I was interviewed this morning for the program and had a great time speaking with Terri and Jake about my experiences assisting victims of identity theft. I appreciate them taking the time to highlight this issue. Unfortunately, I did not have an opportunity to express my opinion that the identity theft victims I come into contact with have trouble recovering from this crime primarily because the credit reporting agencies do not take the dispute process seriously. They don’t take it seriously because the dispute process doesn’t make them money. But I guess that’s for another day…
Indiana’s new security freeze law goes into effect September 1, 2007. Here’s what the Indiana Attorney General’s Office says about the new law:
What is a security freeze?
A ‘security freeze’ is a new consumer right provided by Indiana law. Placing a security freeze on your credit reports can block an identity thief from opening a new account or obtaining credit in your name. A security freeze, also known as a credit freeze or a file freeze, keeps new creditors from accessing your credit report without your say so. If you activate a security freeze, an identity thief cannot take out new credit in your name, even if the thief has your Social Security number or other personal information, because creditors cannot access your credit report.
I received a mailer recently from Equifax. The mailer was selling Equifax’s credit monitoring tool called Credit Watch Gold. It had a couple of “Identifact(s)” listed which contained a few statements that made me go “Hmmmm?”:
* identity theft is now surpassing drug trafficking as the nations’s #1 crime * there are over 10 million victims of identity theft annually * the average victim of identity theft spends 28 hours and $5,686 to resolve the case
The mailer cites the U.S. Department of Justice Statistics and the Federal Trade Commission for this information.
I recently came across a survey conducted by the California Public Interest Research Group and the Privacy Rights Clearinghouse. The survey was conducted in the spring of 2000 and included 66 identity fraud victims who were selected because they had contacted these agencies. Since millions of people have been victims of identity theft, the survey can in no way be considered representative. In fact, it is probably representative of victims who were most adversely impacted. Even so, and even though the survey is several years old, I think it is some great anecdotal evidence of the devastation that identity theft can sometimes cause.
Here is a summary of the survey’s findings:
§ Forty-five (45%) of the victims consider their cases to be solved; and it took them an average of nearly two years, or 23 months, to resolve them. Victims (55%) in the survey whose cases were open, or unsolved, reported that their cases have already been open an average of 44 months, or almost 4 years.
§ Three-fourths, or 76%, of respondents were victims of “true name fraud.” Victims reported that thieves opened an average of six new fraudulent accounts; the number ranged from 1 to 30 new accounts.
§ The average total fraudulent charges made on the new and existing accounts of those surveyed was $18,000, with reported charges ranging from $250 up to $200,000. The most common amount of fraudulent charges reported was $6,000.
Many people don’t realize that the biggest problem with identity theft is not usually liability for the fraudulently incurred debt. Victims of identity theft seldom are saddled with any significant debt as a result of the fraud. The credit card companies and other businesses who deal with the perpetrators usually eat most or all of these losses.
In the meantime, however, the victim’s credit report often ends up in shambles. This can be very difficult to clean up. If you want to see for yourself just how difficult, here are some tips:
1. Don’t shred or tear up your financial documents – just throw them in the trash.