Updated - September 10,2003 -
Identity theft is rising at an alarming rate. A survey released last week by the Federal Trade Commission (FTC), the government's consumer protection agency, found that 27.3 million Americans have had their identity stolen or used fraudulentlyâmore than 9 million last year alone.
The cost of identity theft to businesses and financial organizations is staggering â $48 billion last year alone and another $5 billion in reported losses to individual victims.
"These numbers are the real thing," said Howard Beales, Director of the FTC's Bureau of Consumer Protection. "For several years we have been seeing anecdotal evidence that identity theft is a significant problem that is on the rise. Now we know. It is affecting millions of consumers and costing billions of dollars. This information can serve to galvanize federal, state, and local law enforcers, the business community, and consumers to work together to combat this menace."
The good news is that federal, state and local government cooperation is helping to mitigate some of the losses. Information sharing among multiple jurisdictions is now commonplace and all three major credit bureaus now share information about suspected identity theft. Five years ago, the FTC launched an Identity Theft Program to assist identity theft victims and provide guidance on how to resolve the problems, provide law enforcement training, maintain a nationwide database of ID theft complaints available to law enforcement and refer complaints to criminal law enforcement agencies, and provide business and consumer education, an FTC press release stated. In addition, the FTC provides a nationwide website of resources for anyone affected by identity theft as well as the law enforcement personnel who are working on these cases. The site can be found at http://www.consumer.gov/idtheft
The survey found that victims of identity theft discover the fraud a number of ways. Some discover it by monitoring accounts (52 percent or 5 million); some find out by an alert of suspicious activity from credit card companies (26 percent or 2.5 million) and still others learn of the fraud when they are denied credit (8 percent).
On Wednesday, the House of Representatives voted to add provisions to the Fair Credit Reporting Act that would give Americans access to their credit report at no charge and would enact a single call "fraud alert" system to prevent identity thieves from opening accounts in names other than their own. The Senate has not voted to approve this legislation. The Senate Banking Committee is expected to address the issue soon.
Representative E. Clay Shaw (R-FL), Chairman of the House Ways and Means Subcommittee on Social Security has introduced legislation that would restrict the use of Social Security numbers and would levy fines on businesses that attempt to deny services to customers who refuse to provide their Social Security numbers. H.R. 2971, the Social Security Number Privacy and Identity Theft Prevention Act of 2003," is designed to increase Social Security Number
(SSN) protection and strengthen enforcement of the laws that protect SSNs.
"SSNs are the 'golden key' that unlocks the door to a victim's personal information for many identity predators," said Representative Shaw.
Consumers can report suspected identity theft by calling the toll-free hotline at 1-877-IDTHEFT or through the FTC's identity theft website at www.consumer.gov/idtheft.