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Weekly UpdatesIdentity theft is one of the hottest-and scariest-topics today. It should be because it's one of the fastest-growing types of crimes in the country.
For the sixth year in a row, identity theft heads the annual list of consumer complaints collected by the Federal Trade Commission. Last year, the agency received 685,000 consumer fraud and identity theft complaints, with victims reporting total losses of $680 million. Thirty-seven percent of those complaints related strictly to identity theft.
Slightly more than half of the complaints involved victims age 18 to 39. And, surprisingly, child identity theft complaints are also escalating. Last year, 11,601 such reports were filed on behalf of victims under 18 years old. In 2004, the number was 9,595.
IDENTITY THEFT NOT AS BAD IN ALASKA
The state of Alaska isn't immune to identity theft problems, but identity theft is less rampant here. Alaska ranked 26th for FTC identity theft complaints last year, with 63.4 complaints filed per 100,000 people for a total of 421. However, Alaska did rank first in the nation for FTC fraud complaints in 2005.
In comparison, top-ranking Arizona, Nevada, California and Texas, respectively, had 156.9, 130.2, 125 and 116.5 identity theft complaints per 100,000 people last year. Their total number of complaints was 9,320 for Arizona, 3,144 for Nevada and 45,175 for California and 26,624 for Texas. Incidentally, the state with the fewest number of complaints was North Dakota, which had 24.8 complaints per 100,000 people or 158.
Of Alaska's 421 complaints, 153 were filed in Anchorage, 29 in Fairbanks, 21 in Wasilla and 13 in both Eagle River and Juneau. And by type, the state had 114 complaints for credit card fraud (27 percent), 82 for bank fraud (19 percent) and 57 for phone/ utilities fraud (14 percent).
Paul Honeman, public affairs director for the Anchorage Police Department, is "pleased" that Alaska had significantly fewer identity theft complaints than other states. But he quickly adds: "Even one (complaint) is too many ... I'm not naive; we're pretty prone and vulnerable."
That's why the Anchorage's Police Department has a special team devoted to combating identity theft and other types of fraud. The department's Crime Prevention unit conducts about 100 presentations annually at businesses and other locations. Some of the training segments covered are specifically designed to educate consumers about identity theft.
"We tell people don't let your credit and checking account information become vulnerable to the public. Reality says we've got criminals that look for opportunities," says Honeman, who retired from the department in May after 21 years of service and now does the same job as a reserve lieutenant.
Consumers can minimize their chance of becoming theft victims by taking simple precautions, Honeman says. Safeguarding credit card and account information is critical. In essence, he says, if you have a $5,000 credit line, you should protect it as though you have $5,000 in cash. "Don't reveal your credit card number unless you're really confident in the company," Honeman advises. "Whenever you're using your card, watch around you-especially at the ATM or pay phone.
UNDERSTANDING IDENTITY THEFT
Identity theft is a crime that involves one person appropriating the personal information of another in order to commit fraud. Identity thieves wrongfully obtain the names, addresses, birth dates, Social Security numbers, and bank account numbers of their victims. "It doesn't take much," Honeman says.
Criminals use their ill-begotten information mainly to commit credit card fraud involving new accounts, according to the FTC's records. Telephone and utilities fraud is the next hardest-hit area, particularly with wireless and traditional phone service. Thieves also are apt to conduct carryout bank fraud and employment-related fraud. Less common--but just as damaging-are identity theft cases relating to the Internet, medical, property rental, insurance, government documents and bankruptcy.
Often, seasoned identity thieves will request a change of address immediately after applying for an account. This keeps victims from receiving unpaid bills and discovering the use. The victims of identity theft end up suffering from ruined credit, damaged reputations and other hassles.
Interestingly, identity theft is primarily committed by strangers and strikes victims in multiple areas. An estimated 90 percent of victims in the FTC's database had no relationship with the person accused of stealing their identity. And about 20 percent of the identity theft victims had more than one type of fraud committed against them.
Unfortunately, most victims don't discover their identity has been stolen until more than a year later, according to a joint study by the California Public Interest Research Group and the Privacy Rights Clearinghouse. And when the discovery is made, it is often by accident. About a third of the victims don't detect the problem until they're denied credit applications or receive phone calls from creditors demanding missing payments.
NOT A HIGH-TECH CRIME
Many people think of identity theft as a high-tech crime, but it's far from it. Identity thieves typically use unsophisticated tactics like Dumpster diving, shoulder "surfing" and mailbox raiding to gain access to private information.
Unlocked curbside mailboxes are prime targets, Honeman says. In fact, he says, mailboxes were at the center of a mail theft ring earlier this year that used identities and checks stolen from hundreds of Alaskans to purchase merchandise worth hundreds of thousands of dollars. The crime worked its way across the state, with mailboxes-locked and unlocked-raided in Anchorage, Eagle River, the Matanuska-Susitna Valley and Fairbanks. The thieves reportedly stole personal information and other material, such as Permanent Fund Dividend checks and other checks and credit card statements. Using a laptop computer, they created false identifications with the cashed or fraudulent checks and then went on spending sprees in the Mat-Su and elsewhere. They bought high-ticket items like vehicles, tools and widescreen plasma televisions, as well as food and clothes.
"That's the way identity theft typically works, Honeman says. "Criminals don't care if it's against the law."
Identity theft is a low-tech crime, and it typically surfaces offline, says Jeremy Zidek, Alaska-based communications coordinator of the Better Business Bureau serving Alaska, Oregon and Western Washington. In fact, he adds, only 15 percent of all identity theft goes on online. The top ways people have their identity affected is through a lost or stolen wallet; friends, acquaintances, relatives and corrupt employees who have access to the information; and stolen mail (including fraudulent change of address).
Businesses can reduce identity theft by increasing efforts to protect their customers' information from the public-and unscrupulous employees, Zidek says. "A lot of the time employees keep records for 20 years, and the information goes from a secure filing cabinet to a box," he says. "But businesses can buy a shredder or hire a shredding service.... It's pretty cheap: less than $1 per pound."
Companies should also attempt to minimize employee abuses of customer's credit card accounts or information. They can conduct a background check to see if employees have a history of misused customers' credit cards, Zidek advises. And if customers' information is ever compromised, the businesses entrusted with the information should notify them immediately.
That's where Alaska Senate Bill 222 comes in. The bill, in part, restricts the sale or trade of your personal information, requires that businesses notify consumers when their information has been compromised and allows Alaskans to protect themselves by freezing their credit report. "It's good if consumers are notified because then they can take action and really monitor their credit identity," Zidek says.
However, you can have all the laws and policies put in place, but no one is going to protect consumers better than they can protect themselves, he says. "If people aren't willing to use the tools available to them, they really open the window to be taken advantage of," Zidek adds.
Don Krohn agrees. Krohn, a security officer for First National Bank Alaska and retired Anchorage police officer, says consumers wanting to prevent theft to their bank accounts must make ongoing efforts to safeguarding and monitoring their information. "People need to be responsible for keeping up with their account information," Krohn advises. "They should go online and view their checking account information daily, if possible."
That's excellent advice, based on the 2005 Identity Fraud Survey Report by the Better Business Bureau and Javelin Strategy & Research. The report indicates that people who access their accounts online can provide detection of crime sooner than those who rely only upon mailed monthly paper statements. And by managing their financial activities online, they can reduce access to personal information on paper bills and statements that may be used to commit identity theft and fraud.
The report also revealed that victims of identity theft who detected the crime by monitoring accounts online experienced financial losses that were less than one-eighth of those who detected the crime via paper statements. Average losses were $551 for fraud detected online versus an average $4,543 for fraud discovered from paper statements.
WHAT TO DO IF YOUR IDENTITY IS STOLEN
If you suspect someone has stolen your identity, don't panic. Here are some steps from the FTC that you can take to do damage control:
* Step 1: Contact the fraud departments of any one of the three consumer reporting companies--Equifax, Experian and TransUnion--to place a fraud alert on your credit report. The fraud alert tells creditors to contact you before opening any new accounts or making any changes to your existing accounts. You only need to contact one of the three companies to place an alert, as the company you call is required to contact the other two, which will place an alert on their versions of your report, too. Once you place the fraud alert in your file, you're entitled to order free copies of your credit reports, and, if you ask, only the last four digits of your Social Security number will appear on your credit reports.
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