Identity Theft Steals More Than Your Money

Poor Karen G. When she approached the teller at the Georgia grocery store's courtesy bank, her arm was in a sling, she didn't have her checkbook and she really needed some cash. Fortunately, she had a Florida driver's license. Relying on that photo ID, the bank teller issued a set of counter checks, which Karen promptly used to withdraw $800 from the account.

The problem is, the ID was fake. The real Karen G., a Duval County schoolteacher who asked that her full name not be revealed, had never even been to the Georgia bank where her money was withdrawn. Karen G. had become a victim of identity theft.

"We're not exactly sure what happened. We do not have any idea. We had all our IDs -- all our checks. Everything was intact at the time," she said. "They managed to come up with a state of Florida driver's license, my name, my address, her picture. That was good enough to fool a supervisor of a bank in Georgia, and it fooled the bank two times at the same location here in Florida."

Identity theft isn't new.

"We used to call it just regular old credit card theft," said Inspector Jack Calvin of the U.S. Postal Inspection Service. "It's gotten more sophisticated over the last seven years. Basically, the more banks and the more companies that give credit has led to an explosion of identity theft."

Almost every day people share personal information with someone. They use credit cards to buy lunch, show driver's licenses to write checks or share names, addresses and phone numbers with complete strangers to enter sweepstakes. Schools, employers and doctor's offices have files filled with names, addresses, phone and Social Security numbers. Some insurance companies and schools actually use Social Security numbers as ID numbers. Any of these pieces of information in the wrong hands can make someone the victim of identity theft.

"The problem is massive in that it is easy to obtain the personal identifiers of any individual, anytime, anywhere," said Michael Rachel with the Office of the Statewide Prosecutor. "Criminals know this, know that's it hard to get caught. Therefore, the problem is massive because it is difficult to stop."

Most victims don't have a clue how their identity was stolen.

"Only about 20 percent know, and of those 20 percent the largest group were people who told us their wallets were stolen," said Federal Trade Commission Attorney Betsy Broder.

Criminals find loads of ways to get their hands on someone's identity. In Florida, 45 percent of ID thieves steal the information from people they know, according to the FTC. Thieves can also get what they need from a lost or stolen purse or wallet. "Dumpster divers" scrounge information from the trash, while others steal it from the mail, an employer or financial institution or during a break-in. Despite the concern about Internet security, only 2 percent of stolen ID cases reported to the FTC over the last year and a half were traced to the web.

ID thieves can use a co-opted identity to get a driver's license, apply for credit cards and loans, sign up for telephone and utility service, access bank accounts, buy or rent housing, file fraudulent tax returns or even apply for government benefits or jobs.

In December, the U.S. Postal Inspection Service arrested six Jacksonville men accused of stealing the identities of city employees in Hollywood, Fla. The victims included employees of the Hollywood Police Department. The thieves used their identities to create fake IDs, order credit cards, and buy furniture and appliances in Jacksonville.

"This problem has gained a lot more prominence, and the justice system is trying to get a handle on this problem before it gets out of hand. We're trying to become as sophisticated as the criminals," said Bob Jasinski of the U.S. Secret Service. "We're trying to identify new areas, new trends of fraud where high-tech things are being used."

The same kind of computers and software that people use every day make identity theft frighteningly easy for a determined criminal. Cell phones, printers, scanners, cloned phones, counterfeit IDs and credit card "skimmers" are just some of the tools of the ID thief's trade.

Identity theft hit 500,000 people last year. The FBI has called it one of the fastest growing white-collar crimes in the nation.

"The rise in identity theft may be accelerating because of a disturbing new trend, 'group identity theft,' in which perpetrators target the workplace for its trove of personal information, and dozens of people find themselves victimized by a single offender or a ring of thieves," said Danny Johnson of the Social Security Administration Office of the Inspector General.

Organized groups of thieves have been found operating inside banks, credit card companies and even credit bureaus, stealing identifiers and financial information. In turn, the information can he used in underground factories that produce realistic driver's licenses, in credit card embossing schemes or even by criminals from other countries. KGB-trained Russian mobs, Nigerian gangs, Venezuelan rings and others have been caught operating identity takeover operations right here in Florida.

The potential for economic disaster in Florida and nationwide is profound. Jacksonville is second only to Miami in the number of cases of identity theft reported in the state, according to the FTC. Nationwide, Miami ranks in the top 10. In response to the threat, Gov. Jeb Bush empanelled a statewide grand jury last July to address the problem.

In America a person is considered innocent until proven guilty, but it can be just the opposite for someone whose history has been hijacked. Some victims spend years proving to credit bureaus and other financial institutions that ID theft took place. That's why it's so vital to protect identifiers, carefully monitor monthly financial statements and review credit reports every six months.

"You have to educate the public and let them know how to protect themselves as best they can," said Jasinski. "And on the other side, the financial institutions also have to step up to the plate, so to speak, and take some responsibility and be more diligent. There wouldn't be a market for this information unless this information could be easily used."

Some people joke that they are safe from ID theft because thieves only go after victims with good credit. Actually, people with bad credit or even people with no credit, such as children and the dead, aren't immune from this invasion of privacy.

It's almost impossible to completely protect oneself from a determined criminal out to steal an identity. There are, however, some precautions people can take to minimize the chances of it happening (see sidebar "Protect Yourself from Identity Theft").

An employer, a bank or an organization doing a valid credit check will need an applicant's Social Security number. According to Jasinski and other experts interviewed, if someone doesn't have a valid need for a Social Security number, don't reveal it. Every consumer has the right to say "no."

Experts say a person whose identity is stolen should take action immediately.

First, contact the fraud departments of each of the three major credit bureaus. (See sidebar "Reporting Identity Theft".)

Tell them you're an identity theft victim. Review your records and request that a "fraud alert" be placed in your file.

Second, contact creditors for any accounts that have been tampered with or opened fraudulently. This includes accounts with credit card companies, department stores, utilities, banks, grocery stores and even video rental shops.

Third, file a report with the JSO or the police in the community where the identity theft took place. A police report establishes that someone is indeed a victim of a crime and not a deadbeat trying to get out of paying legitimate debts.

"The police report is the official documentation that an incident happened," said Lt. Ed Johnson of the JSO. "All it will require is calling a police officer out to the scene. Or, if this is a case where there is no suspect information, you can have a report written over the telephone."

If a Social Security number is the foundation of one's identity, the cornerstone is a driver's license. Particularly in light of the terrorist attacks of September 11, Florida's Division of Driver Licenses is looking at this form of ID in a whole new way.

As of December 15, non-U.S. citizens are no longer allowed to obtain a driver's license when they walk into a driver's license office. If their documentation is legitimate, they will be issued a temporary permit for 30 days pending state approval.

"That documentation will be checked by our fraud unit in Tallahassee to determine that it is OK," said Terri Ganson of the Division of Driver Licenses in the Department of Highway Safety and Motor Vehicles.

Ganson said the new regulations should boost the public's confidence in the authenticity of driver's licenses, "In addition, it's going to make people who come into our office with false identification a little more hesitant about saying 'here's my identification."'

For the average citizen, the good news is laws are in place to protect the public. The Identity Theft Act, passed by Congress in 1998, provides for stiffer penalties for this type of crime. Florida enacted similar legislation in 2000.

The Truth in Lending Act limits liability for unauthorized credit card charges in most cases to $50 per card. The Electronic Fund Transfer Act provides consumer protections for transactions involving an ATM or debit card. And while no federal law limits victim's losses if someone steals their checks and forges their signature, most states hold the bank responsible for losses from a forged check.

Karen G. still has no idea how her identity was stolen. It may have happened when she moved and tossed household records in the trash. It may have happened two years ago when someone stole her purse. When that happened she followed the rules and initiated a fraud alert with the three major credit reporting bureaus, but even that didn't stop the phony Karen G. from withdrawing $3,150 from her bank account last year.

The real Karen G. was lucky, however. Her damages were limited to bank fraud, and her bank refunded the money stolen from her account.

The bad news is that identity theft can be a nightmare. Victims have been turned down for credit, mortgages and even jobs because someone else ran their credit into the ground. And in a worst-case scenario, victims have been arrested for crimes committed by the thief.

"We have heard from consumers who have spent the night in jail because an identity thief has used their name," said Broder of the FTC.

"It's scary," said Karen G. "Next to rape and murder, it's probably one of the most personal crimes that can be committed on you. It's you."

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Postal inspectors recently arrested a Nigerian man in Jacksonville whose identity theft ring claimed victims in 25 states. When he was caught, the man had a half dozen fake IDs (pictured above) and enough information on other victims to create dozens more.