Identity Theft Essay, Research Paper
Identity Theft
With the public emergence and worldwide explosion of the internet, Identity theft has become one of the most rapidly increasing crimes. What was once a personal crime requiring criminals to have some form of contact with the victim, if nothing more than rummaging through the trash, can now be done from as close as next door or as far away as across the world. No one is exempt from the possibility that they could be a victim. Identity theft has advanced so rapidly that government and law enforcement agencies have not been able to keep up with new legislature. Many states still do not view Identity theft as a crime. It is the victim who has to prove fraud exists. The judicial system that currently exists in this country states that any one accused of a crime is innocent until proven guilty. This is not the case with Identity theft. These people are considered guilty until such time as they can prove their innocence.
One of the problems encountered in the ongoing battle against Identity theft is that at this time no standard definition currently exists. Identity is defined by Merriam Webster on-line as the distinguishing character or personality of an individual identification; the condition of being the same with something described or asserted. ie establish the identity of stolen goods. Meriam Webster on-line also defines Theft as: the act of stealing; specifically: the felonious taking and removing of personal property with intent to deprive the rightful owner of it. The best explanation of Identity theft was by one web site which defines it as:
Identity theft involves acquiring key pieces of someone’s identifying information in order to impersonate them and commit various crimes in that person’s name. Besides basic information like name, address and telephone number, identity thieves look for social insurance numbers, driver’s license numbers, credit card and/or bank account numbers, as well as bank cards, telephone calling cards, birth certificates or passports. This information enables the identity thief to commit numerous forms of fraud: to go on spending sprees under the victim’s name, to take over the victim’s financial accounts, open new accounts, divert the victim’s financial mail to the thief’s address, apply for loans, credit cards, social benefits, rent apartments, establish services with utility companies, and more.
An examples of Identity Fraud could consist of the selling of your name, address, Social Security number and other identifying information, including driver’s license number, ATM number and other key pieces of an individual’s identity. Then, the information could be sold by dishonest employees of retail stores, hotels, restaurants, credit bureau, mail order houses and even financial institutions and government agencies. The result could be a flood of solicitation mail from catalog retailers, insurance marketers and credit card companies. Also, crooks will watch for junk mail offering low rate credit cards. They will lift the solicitations from your mailbox, business, or trashcan and apply in your name, but write in a different address. The credit card and all subsequent statements would go to the other address. You would never know what hit you until you get the first intruding phone call. Another example of Identity Fraud is Somebody obtaining your credit information and then using it to get a host of high limited credit cards. The identity thief will masquerade as you and open fraudulent accounts in your name, change the address on your credit card and take over accounts you already have. He/she will run up huge bills and leave you with the mess. The thief will spend as much money as possible in as short a time as possible before moving on to someone else’s name and account information. Victims will have been left with a damaged reputation, bad credit reports and could spend months or even years trying to regain their financial health.
Stealing wallets used to be the best way identity thieves obtained credit card numbers and other pieces of identification. Now more sophisticated means are commonly used: accessing your credit report fraudulently, for example, by posing as an employer, loan officer or landlord and ordering a copy; “shoulder surfing” at ATM machines and phone booths in order to capture PIN numbers; stealing mail from mailboxes to obtain newly issued credit cards, bank and credit card statements, pre-approved credit offers, or tax information; “dumpster diving” in trash bins for unshredded credit card and loan applications. In today’s networked, computer-driven society, criminals can learn the intimate details of almost anyone’s financial records with nothing more than a few keystrokes and mouse clicks. Accessing a computer terminal that is connected to one of the credit reporting bureaus, looking for names similar to the thief s, or someone with good credit. This type of access is the negligence of the company which is permitting such access in an unmonitored environment. Insiders have also used their access to personnel records to obtain Social Security numbers of identity theft victims.
Generally, victims of credit and banking fraud will be liable for no more than the first $50 of the loss. (15 USC1643) In many cases, the victim will not be required to pay any part of the loss. (The victim must notify financial institutions within two days of learning of the loss, although this is often waived.) Even though victims are usually not saddled with paying their imposters’ bills, they are often left with a bad credit report and must spend months and even years regaining their financial health. In the meantime, they have difficulty writing checks, obtaining loans, renting apartments, and even getting hired. Victims of identity theft find almost no help from the authorities as they attempt to untangle the web of deception that has allowed another person to impersonate them.
What happens when the phone rings and a collection agency demands that you pay past-due accounts for merchandise you never ordered? The supermarket refuses your checks because you have a history of bouncing them, yet you have a perfect record and always pay your bills on time. Victims themselves are burdened with resolving the problem. It is important to quickly and assertively act to stop the thief’s further use of your identity and to minimize the damage. In dealing with the authorities and financial institutions, the victim needs keep a log of all conversations, including dates, names and phone numbers. Note time spent and any expenses incurred. Confirm conversations in writing. Send correspondence by certified mail (return receipt requested). Keep copies of all letters and documents. There are many different details and steps to take to recover.
The first step is to report the crime to all police and sheriff’s departments with jurisdiction in your case immediately. Give them as much documented evidence as possible. Get a copy of your police report. Keep the phone number of your fraud investigator handy and give it to creditors and others who require verification of your case. Credit card companies, your bank, and the insurance company may require you to show the report in order to verify the crime. Some police departments have been known to refuse to write reports on such crimes. Be persistent! The Secret Service has jurisdiction over financial fraud cases (18 USC 1029), but it usually does not investigate individual cases unless the dollar amount is high or you are one of many victims of a fraud ring. To interest the Secret Service in your case, you may want to ask the fraud department of the credit card companies and/or banks, as well as the police investigator, to notify the particular Secret Service agent they work with. Notify the Postal Inspector if you suspect mail theft. Theft of mail is a federal crime and is a felony.
The next step is to immediately call the fraud units of the three credit reporting companies: Experian (formerly TRW), Equifax and Trans Union. Report the theft of your credit cards or numbers. Ask that your account be flagged. Also, add a victim’s statement to your report, up to 100 words (”My ID has been used to apply for credit fraudulently. Contact me at 123-555-1212 to verify all applications.”) Be sure to ask how long the fraud alert will be posted on your account, and how you can extend it if necessary. The nearest office of the Consumer Credit Counseling Service might be able to give you advice on removing fraudulent claims from your credit report.
Then immediately contact all your credit card issuers– by phone and in writing. Get replacement cards with new account numbers. Ask that the old accounts be processed as “account closed at consumer’s request.” (This is better than “card lost or stolen,” because when this statement is reported to the credit bureaus, it can be interpreted as blaming you for the loss.) Follow-up in writing. This protects you in case of a dispute with the credit card issuer. Carefully monitor your mail and credit card bills for evidence of new fraudulent activity.
You may be asked by banks and credit grantors to fill out and notarize fraud affidavits, which could become costly. The law does not require that a notarized affidavit be provided to creditors. A written statement and supporting documentation should be enough (unless the creditor offers to pay for the notary.) Overly burdensome requirements by creditors should be reported to federal government authorities. For help in determining which agency to contact, call CALPIRG or the Privacy Rights Clearinghouse.
You will want to notify your bank(s) of the theft. Cancel your checking and savings accounts and obtain new account numbers. Ask the bank to issue you a secret password that must be used in every transaction. Put stop payments on any outstanding checks that you are unsure of. Give the bank a secret password for your account (not your mother’s maiden name). If you have had checks stolen or bank accounts set up fraudulently, report it to TeleCheck, National Processing Company (NPC) or Equifax. If you use an ATM card for banking services, get a new card, account number and password. Do not use your old password. When creating a password, avoid such commonly used numbers as the last four digits of your Social Security number and your birth date.
Notify the local Postal Inspector if you suspect an identity thief has filed a change of your address with the post office or has used the mail to commit credit or bank fraud. Find out where fraudulent credit cards were sent. Notify the local Postmaster for that address to forward all mail in your name to your own address. You may also need to talk with the mail carrier.
If there is fraudulent use of your Social Security number, call the Social Security Administration. You may want to have your Social Security number changed if your number has become associated with bad checks and credit. But the Social Security Administration will only change it if you fit their fraud victim criteria. You must be sure to notify all credit grantors and credit reporting bureaus of your new SSN. Also order a copy of your Earnings and Benefits Statement and check it for accuracy.
If you have a passport, notify the passport office in writing to be on the lookout for anyone ordering a new passport fraudulently9.
You will need to call your telephone, electrical, gas and water utilities. Alert them to the possibility that someone may attempt to open new service using your identification. Also contact your long distance company. You may need to cancel your long distance calling card if it has been stolen or if the account number has been accessed by “shoulder surfers.” When opening a new one, provide a password which must be used any time the account is changed.
You may need to change your driver’s license number if someone is using yours as identification on bad checks. Call the state office of the Department of Motor Vehicles (DMV) to see if another license was issued in your name. Put a fraud alert on your license. Go to your local DMV to request a new number. Also, fill out the DMV’s complaint form to begin the fraud investigation process. Send supporting documents with the completed form to the nearest DMV investigation office.
Sometimes victims of identity theft are wrongfully accused of crimes committed by the imposter. If a civil judgment has been entered in your name for actions taken by your imposter, contact the court where the judgment was entered and report that you are a victim of identity theft. If you are wrongfully prosecuted for criminal charges, contact the state Department of Justice and the FBI. Ask for help in clearing your name.
Consider seeking legal counsel, especially if you have difficulty clearing up your credit history, or your case is complex and involves a lot of money. Or to determine legal action to take against creditors and/or credit bureaus if they are not cooperative in removing fraudulent entries from your credit report or if negligence is a factor. Call the local Bar Association to find an attorney who specializes in consumer law and the Fair Credit Reporting Act. An attorney can help you recover from the fraud and determine whether your rights under various credit, banking, Social Security and other laws have been violated.
Victims of identity theft often report they feel they are somehow to blame. They can also feel violated, even powerless, due to the fact that few, if any, of the authorities who have been notified of the crime step forward to help the victim. Discuss your situation with a friend or counselor. Psychological counseling may help you deal with the stress and anxiety commonly experienced by victims. Know that you are not alone. Contact CALPIRG or the Privacy Rights Clearinghouse for information on how to network with other victims.
Write to your state and federal legislators. Demand stronger privacy protection and fraud assistance by creditors and credit bureaus. Contact CALPIRG for information on any pending state or federal legislation.
Finally, do not pay any bill or portion of a bill which is a result of identity theft. Do not cover any checks which were written and/or cashed fraudulently. Your credit rating should not be permanently affected, and no legal action should be taken against you. If any merchant, financial institution or collection agency suggests otherwise, simply restate your willingness to cooperate, but don’t allow yourself to be coerced into paying fraudulent bills.
As frightening as this may sound, there is hope to protect yourself from having to go through all this. Prevention is the name of the game. It is not a simple or easy task but considering the other possibility, it s definitely necessary. There are several different aspects and areas to cover.
The Social Security Number (SSN) is the key to your credit and banking accounts and is the prime target of criminals… Protect your SSN by releasing it only when absolutely necessary (like tax forms, employment records, most banking, stock and property transactions). A Social Security number is not required for on-line purchases when using your credit card; don’t deal with an on-line vendor who asks for it, and don’t carry your Social Security card in your purse or wallet. Never, under any circumstances print your SSN on your checks.
If a business requests your SSN, ask if it has an alternative number which can be used instead. Speak to a manager or supervisor if your request is not heeded. Ask to see the company’s policy on SSNs. If necessary, take your business elsewhere. If the SSN is requested by a government agency, look for the Privacy Act notice. This will tell you if your SSN is required, what will be done with it, and what happens if you refuse to provide it. Also order your Social Security Earnings and Benefits Statement once a year to check for fraud.
You also want to protect your credit and credit cards. Get a copy of your credit reports at least once a year to check for accuracy and suspicious activity. Order your credit report once a year from each of the three credit bureaus to check for inaccuracies and fraudulent use of your accounts, usually for a fee. The nominal charge can be well worth the investment. Reduce the number of credit cards you actively use to a bare minimum. Carry only one or two of them in your wallet. Cancel all unused accounts. Even though you do not use them, their account numbers are recorded in your credit report which is full of data that can be used by identity thieves. Keep a list or photocopy in a secure location with all your credit cards, the account numbers, expiration dates and telephone numbers of the customer service and fraud departments in a secure place (not your wallet or purse) so you can quickly contact your creditors in case your cards have been stolen Do the same with your bank accounts. Always take credit card receipts with you. Never toss them in a public trash container. Watch the mail when you expect a new or reissued credit card to arrive. Contact the issuer if the card does not arrive.
Never give out your credit card number or other personal information over the phone unless you have a trusted business relationship with the company and you have initiated the call. Identity thieves have been known to call their victims with a fake story that goes something like this. “Today is your lucky day! You have been chosen by the Publishers Consolidated Sweepstakes to receive a free trip to the Bahamas. All we need is your credit card number and expiration date to verify you as the lucky winner.”
Another step is to reduce the amount of personal information that is “out there.” Remove your name from the marketing lists of the three credit reporting bureaus– Equifax, Experian (formerly TRW) and Trans Union. This will limit the number of pre-approved offers of credit that you receive. These, when tossed into the garbage, are a potential target of identity thieves who use them to order credit cards in your name. (See addresses and phone numbers at the end of fact sheet.) Sign up for the Direct Marketing Association’s Mail Preference Service and the Telephone Preference Service. Your name is added to computerized name deletion lists used by nationwide marketers. Have your name and address removed from the phone book and reverse directories.
Be aware when creating passwords and PINs (personal identification numbers), do not use the last four digits of your Social Security number, your birthdate, middle name, pet’s name, consecutive numbers or anything else that could easily be discovered by thieves. Ask your financial institutions to add extra security protection to your account. Most will allow you to use an additional code (a number or word) when accessing your account. Do not use your mother’s maiden name, as that is all too easily obtained by identity thieves. Shield your hand when using a bank ATM machine or making long distance phone calls with your phone card. “Shoulder surfers” may be nearby with binoculars or video camera. Memorize all your passwords do not keep a record of them in your wallet or purse.
Some other tips for handling personal information responsibly are minimizing the amount of information a thief can steal, do not carry extra credit cards, your Social Security card, birth certificate or passport in your wallet or purse, except when needed. Install a locked mailbox at your residence to reduce mail theft. Or use a post office box. When you order new checks, do not have them sent to your home’s mailbox. Pick them up at the bank instead.
When you pay bills, do not leave the envelopes containing your checks at your mailbox for the postal carrier to pick up. If stolen, your checks can be altered and then cashed by the imposter. It is best to mail bills and other sensitive items at the post office rather than neighborhood drop boxes. Carefully review your credit card statements and phone bills, including cellular phone bills, for unauthorized use. Do not toss pre-approved credit offers in your trash or recycling bin without first tearing them into small pieces or shredding them. They can be used by “dumpster divers” to order credit cards in your name and mail them to their address. Do the same with other sensitive information like credit card receipts, phone bills and so on. Home shredders can be purchased in many office supply stores.
Demand that financial institutions adequately safeguard your data. Discourage your bank from using the last four digits of the SSN as the PIN number they assign to customers. Insist that banks remove account numbers from ATM slips (many have already done so). Also insist they shred all paper records before discarding them. By not adopting responsible information-handling practices, they put their customers at risk for fraud. When you fill out loan or credit applications, find out how the company disposes of them. If you are not comfortable with their method of disposal or storage, take your business elsewhere. Some auto dealerships, department stores, car rental agencies, and video stores have been known to be careless with customer applications.
When you pay by credit card, ask the business how it stores and disposes of the transaction slip. Avoid paying by credit card if you think the business does not use adequate safeguards. Store your canceled checks in a safe place. In the wrong hands, they could reveal a lot of information about you, including the account number, your phone number and driver’s license number. Never permit your credit card number to be written onto your checks. It’s a violation of California law (California Civil Code 1725) and puts you at risk for fraud. Any entity which handles personal information should train all its employees, from top to bottom, on responsible information-handling practices. Persuade the companies, government agencies, and nonprofit agencies with which you are associated to adopt privacy policies and conduct privacy training. Employees should be trained to check picture ID cards when accepting credit cards.
Never give out personal information such as your birth date, mother’s maiden name, credit card or social security number or bank PIN code over the phone, except to someone you know or an established firm. Shred pre-approved credit applications, credit card receipts, bills and other financial information before throwing them away. Watch the mail when you are expecting a new or reissued credit card, bank card or checks to arrive. Contact the financial institution immediately if they are late.
Get off the lists of direct marketers and database companies. Companies sell your name, address and other personal information to companies and to individuals. And now, it’s easier than ever to end up on these lists. In fact, America Online sells the names and addresses of its subscribers to direct marketing companies (although they recently decided not to sell its members’ telephone numbers as well). One company that offers services to get you off mail, phone, and other database lists is Zero Junk Mail.
The government is currently drafting legislature to stop identity theft. However this takes time and time is on the side of the thief. The private sector, which includes all of us as individuals, can play a much larger part in preventing this crime if we just take the time. A few extra precautions on every persons part could help eliminate Identity theft. In the worst cases, these identity thieves use this knowledge to ruin credit ratings by making enormous unauthorized purchases, and sometimes even emotionally damaging the victims. As frightening as this may sound, computer users are not helpless against this new brand of criminal. The preventive steps are there for us to use. One in four Americans will fall victim to Identity theft. Will you be that one? What kind of information is floating through cyberspace about you? How safe is your identity?
Bibliography
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