Identity theft tops list of consumer troubles
WASHINGTON -- The government received twice as many complaints about identity theft last year as it did in 2001, with victims reporting hijacked credit cards, drained bank accounts and tarnished reputations.
"This is a crime that is almost solely on the shoulders of the victim to resolve," said Beth Givens, director of the Privacy Rights Clearinghouse, a San Diego-based consumer group. "They're beleaguered, they're tired, they're angry, and it takes them a good deal of time to recover."
The number of identity theft complaints rose from about 86,000 in 2001 to about 162,000 last year, the Federal Trade Commission said Wednesday. The figures come from a government database of 380,000 fraud complaints collected by the FTC, the FBI and scores of law enforcement and consumer groups.
Identity theft accounted for 43 percent of the complaints, topping the government's list of consumer frauds for a third consecutive year. Gripes about fraud in Internet auctions ranked a distant second.
Up to 700,000 people in the United States may be victimized by identity bandits each year, the Justice Department says. It costs the average victim more than $1,000 to cope with the damage to their accounts and reputations, according to the FTC.
For 40-year-old Alexandra May of Cupertino, Calif., recovery has taken about five years.
The office equipment saleswoman said that in 1997 a woman who looked nothing like her obtained a duplicate of her driver's license from a department of motor vehicles office. With the license, the woman stole $4,000 from May's bank account and sullied her records with an accident and the theft of a rental car.
"I went to rent a car a few months later and was almost arrested," May said. She said she expects to receive a new license this month that finally severs her record from the ID thief's actions.
Howard Beales, chief of the FTC's Bureau of Consumer Protection, said complaints about identity theft have increased, along with greater public awareness of the problem, prompted by the agency's efforts and recent high-profile identity theft cases.
"What we're seeing increasingly is identity theft because some insider steals information and sells it," Beales said at a news conference.
In November, federal authorities in New York broke up what they called the biggest identity theft case in U.S. history and charged three men with stealing credit information for 30,000 people. Prosecutors said the scheme began with passwords and records stolen from a software company.
Sen. Charles Schumer, D-N.Y., said he has asked the FTC to issue and enforce security guidelines for businesses that collect sensitive financial information. The guidelines would include employee background checks and restricting access to customer information.
"We must now take companies to task when identity theft occurs under their watch and the company is at fault," Schumer said in a telephone interview. He said he would propose legislation to tighten corporate security if the FTC does not address the issue.
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