Understanding Identity Theft

The identity theft case that involved the Choice Point Inc. followed similar incidents which shows how vulnerable consumers are to electronic fraud. But, it also underscores the fact that there is little consumers can do to protect themselves, other than frequently checking their credit reports and being wary about giving out any personal information.

Beth Givens, the Director of Privacy Rights Clearinghouse, said: “We live in an information-rich society. If someone is intent on committing identity theft, it’s not all that difficult.”

She also stated that obtaining personal financial information can be easily done by stealing mail sent by a bank or by looking through workplace records of customers and fellow employees. According to the Better Business Bureau, most identity theft occurs by thieves stealing information from checkbooks or wallets. In fact, less than 12% of identity theft is a result from computer crimes.

Recent incidents include:

– Over 45,000 former members of the US armed forces military and intelligence employees were informed that they risked identity theft after thieves had stolen their names and Social Security numbers from the computer records of a government contractor, Science Application International Corporation. This list of potential victims had the names of some of the nation’s top former military and intelligence officials, including former CIA Director John M. Deutch and former Defense Secretary William Perry.

– Early last month, hackers stole the names, Social Security numbers and other personal information on 30,000 students and staff members at George Mason University. The information was in a computer server tht was quickly shut down by school officials when the intrusion was discovered. All those affected were notified. Identity theft incidents similar to this one have also occurred at the University of California at Berkeley and at the Georgia Institute of Technology.

– Also last month, a computer technician who was involved in what prosecutors called the biggest identity theft in U.S. history was sentenced to 14 years in prison by a federal court in New York. Philip A. Cummings, a former help-desk worker for Teledata Communications Inc., pleaded guilty to conspiracy, wire fraud and fraud in a scheme that has been estimated to cost thousands of victims a total of between $50 – $100 million. His employer provided banks with computerized access to credit-information databases. Cummings was accused of selling passwords and codes for downloading consumer credit reports to a co-conspirator.

– In December 2004, a Red Cross employee and two others were charged with stealing computerized information on 40 blood donors in Philadelphia, and then using this information in order to obtain close to $268,000 in cash and merchandise. Danielle Baker, a Red Cross data entry clerk, and her accomplices are accused of using names, Social Security numbers, places of employment and other information to obtain credit, cash counterfeit checks and to acquire bank loans under assumed names. Shortly after this incident happened, a number of Philadelphia employers canceled their blood drives, costing the Red Cross over $455,000 and forcing the agency to purchase blood from other parts of the country.

– In November 2004, thieves stole computers from an a Wells Fargo & Co. office located in Atlanta, GA. The computers contained account information on thousands of mortgage and student loan customers. This was the third time in a year that computers that contained personal data of Wells Fargo customers were stolen. The auditing firm of Deloitte & Touche LLP found that 83% of the nation’s financial institutions acknowledged their computer systems had been hit in the past year, which is up from 39% the previous year.

According to the most recent Federal Trade Commission report on consumer concerns, identity theft is on the top the list of consumer complaints, Last year, over 246,000 of all complaints involved identity theft. During the same time, consumers and businesses tryed hard to protect their credit information. The Federal Trade Commission report stated that the percentage of identity theft complaints, which involve thieves trying to open credit accounts with stolen information, dropped from 24% in 2002 to 17% in 2004.

Privacy Rights Clearinghouse strongly recommends that all consumers should check their credit reports once a year from the any of the three major credit bureaus, Equifax, Experian or Trans Union, in order to search for evidence of fraudulent transactions.