Monday, January 02, 2006

Identity Theft

Note to readers: This is another of my long articles, so settle in.

[All emphases by Always On Watch]

Upon returning from our Thanksgiving vacation, my husband and I had to deal with the possibility of identity theft because of the break-in at my accountant's office. I immediately followed my accountant's suggestion of placing a ninety-day fraud alert by notifying Equifax. My notification of the break-in was some two weeks late, however, due to Thanksgiving vacation.

Along came commenter Storm, a fraud detective who works identity-theft cases in a major metropolitan area, to leave important information:

"It would be prudent to check again in about 60 days as there is some lag time from when a merchant makes a loan and the loan is reported to equifax. Also make sure you get the fraud alert that lasts 7 years (This must be done in writing). Suspects have been known to wait and try again after the temp hold expires."
Storm also suggested checking the official government web site for identity theft, which is, according to the site,

"a one-stop national resource to learn about the crime of identity theft. It provides detailed information to help you protect yourself from identity theft, and the steps to take if it occurs."
In a comment to another of my blog articles, Storm pointed out that most identity thefts do not begin with break-ins. In fact, purse or wallet theft is the most common method.

Reproduced in its entirety is this short February 7, 2005 article from Time Magazine:

"The term identity theft may conjure up notions of cyberhacks and Internet scams, but most ID fraud, it turns out, starts off-line. Last year 9.3 million Americans were victims of identity fraud, a problem that cost consumers and businesses some $52 billion. But fewer than 12% of cases start online, according to a survey by Javelin Strategy & Research and the Better Business Bureau. Most ID theft has an old-fashioned beginning: a lost wallet, stolen mail or a friend or relative with easy access to financial information. Another finding: People who monitor accounts online catch fraud earlier and minimize the damage. While the average loss for fraud detected by paper statements was $4,543, it was just $551 for such crimes discovered online."
And here is "Personal Finance: How you can (and can't) avoid identity theft," from U.S. News & World Report (6/30/05):

"Identity theft is becoming as ubiquitous as credit card solicitations. Maybe that's an exaggeration, but it's sure starting to feel that way.

'Over the past five years, 28 million Americans—or roughly 13 percent of the adult population—have fallen victim to the crime, in which thieves steal personal information to open lines of credit, obtain loans, or simply purchase goods and services in the stolen name.

"In recent weeks, tens of millions more households have had their personal information lost or stolen, exposing them to a similar fate. Already, Americans are changing their behavior as a result. A new study by the Conference Board shows that 70 percent of Internet users have installed an added layer of software security protection on their home computers. Meanwhile, more than 2 out of 5 Internet users say they are making fewer purchases online as a result of fears about identity theft.

"While there's certainly an argument for being more careful when surfing the Internet and making fewer online purchases, these steps will likely do little to keep you from being a victim of ID theft.

"Here's why:

"The most common way consumers fall victim to ID theft is not through the high-tech landscape of the Internet but through conventional means such as a lost or stolen wallet or purse. In fact, online identity theft represents only a small minority of total ID theft cases. For example, only 5 percent of thefts came through computer spyware and only 2 percent of cases were the result of computer hackers, according to a survey by the consulting firm Javelin Strategy & Research.

"There is a good chance you know the person who stole your identity. The Javelin study found that 1 in 5 victims of ID theft last year had their identities stolen by a friend, acquaintance, relative, or employee.

"Most victims of ID theft are already doing the right thing when it comes to their online behavior. Yet they're still falling victim to this crime. For example, 66 percent of ID theft victims last year shredded their financial documents before discarding them while 60 percent used antivirus, antispyware, and firewall software.

"The recent headline-grabbing stories of identity theft show that even if you play it absolutely safe by shredding your documents and making no transactions online, you're still at risk of ID theft if your bank misplaces customer data or should a retailer's computer system get hacked.

"So instead of spending all your time worrying about prevention, think about monitoring your records as well. That means checking all your bank and credit card and loan statements thoroughly every month. And think about signing up for a credit-monitoring program through your bank or one of the three major credit bureaus: Experian, Equifax, or TransUnion. Fair Isaac, which runs one of the leading credit-scoring services, also offers a credit-monitoring program through its site. These services, which can run from $40 to $100 a year, will alert you should a loan or credit card be opened up fraudulently in your name.

"And don't forget that a new law makes it possible for consumers to get a free copy of each of their three credit reports annually. To learn how to obtain your free reports, [go here]."
Storm also made the following points to this blog article, which discusses using a cell phone as an ATM:

"ID Thefts occur 4 major ways
1) yours a physical crime break in etc although homes are rare--aggresive attack
2) trash and mail--passive attack
3) hacking and other electronic tech--can be passive or aggressive
4) employees who have our info
"I would be more afraid of the girl at the kiosk making $8 per hour selling the headset than using the headset."
Storm's comment about mall kiosks was of particular interest to me because, on December 24, 2005, the Washington Post featured an article entitled "Dreams Incubate in Shopping Carts: Kiosks Seen as Springboards for Immigrant Entrepreneurs":

"...Scattered among the malls packed with holiday shoppers are kiosks filled with sunglasses, purses, jewelry and more exotic products. New carts have recently appeared, selling ornaments, candy and other seasonal items. Owners of these small businesses hope to lure some of the shoppers rushing to buy gifts at retail mainstays such as Gap, Ann Taylor and Bloomingdale's....

"Nationally, about 25 percent of the more than 50,000 carts and kiosks in shopping malls are owned or operated by recent immigrants, according to figures compiled by Patricia Norins, a kiosk consultant and publisher of the trade magazine Specialty Retail Report....

"In many shopping centers, small retailers can open a kiosk for as little as $5,000, which generally covers the price of renting the cart and purchasing the merchandise, according to kiosk owners and Kathy Hannon, senior property manager for Macerich Co., which runs Tysons Corner Center. To open a kiosk, an entrepreneur must present mall managers with a proposal outlining what they will sell and why it will work in the mall's marketplace. Hannon said immigrants can often import unusual goods inexpensively from their home countries.

"Once a proposal has been approved, most shopping centers require a security deposit and the first month's rent for the cart. Kiosk operators often can commit to rent the cart for as little as three months. Norins said profits earned from kiosks vary greatly. Most kiosk owners sell products for about $20 and mark up items at least three times wholesale price, she said. Kiosk owners interviewed declined to describe their markups, but African immigrant Atchossa Tchama said he comfortably replaced the $40,000 income he earned working for the federal government within his first year of owning the kiosk and has since surpassed that...."
I love the deals which I can find at mall kiosks, but after reading Storm's comment, I'm glad that I've always paid by cash!

Identity theft is particularly troubling because any person can be a victim. I know when and where the thieves got my information (if they indeeed were able to crack the encryption of the data on the twenty-six computers stolen), but nearly all victims never find out how and when they were compromised. Some victims do not find out for years when they try to get a mortgage or if they get arrested.

I will be requesting another report after the first one because some time has to pass in order to allow for any items not currently reported to make their way to the reporting agencies. Lag time exists from when one acquires a car loan and the lender notifies the credit reporting bureaus, and lag time also applies to the various stages of identity-theft investigation.

Regardless whether or not we're suspicious of our own identities having been stolen, once a year, all of us should go here, where each of us can get an annual credit report. The report is free!

In my situation, all seems well--so far, but not even sixty days has passed. And maybe the break-in of my accountant's office was an attempt to get the state-of-the-art computer equipment there and not an attempt to steal my identity. After the bit of research I've done, I cannot afford to assume the best.


At 1/02/2006 11:05 PM, Blogger Bassizzzt said...

Imagine this: a former employee stole the purse of a female employee at our company, and used her credit card at a nearby gas station to fill up his car. Visa went full bore on an investigation and asked the gas station for videotape of the time the card was used. Lo and behold, there he was, easily identified. Visa turned around and even told our boss, who subsequently fired him that Friday afternoon. Visa of course pressed charges and the girl got her stuff back without having to pay for the gas (and the meal he had bought for himself at a nearby restaurant).

At 1/02/2006 11:17 PM, Blogger Esther said...

Wow, bassizzzt.

AOW, fantastic post! Lots of awesome info here. Thank you! That said, I really hope everything turns out okay for you guys.

At 1/02/2006 11:25 PM, Blogger Pastorius said...

A simple mark on the hand or forehead ought to take care of all these problems of identity theft.


At 1/03/2006 12:20 AM, Blogger MissingLink said...

Do people may use you identity to collect welfare benefits etc?
It is really scary stuff.

I sincerely hope everything will turn out OK in your case.

At 1/03/2006 3:36 AM, Blogger BonnieBlueFlag said...

Thanks for the great tips and links.

Some years ago we received a call from our credit card company to inquire about a recent spate of purchases.

Upon review of the items charged to our account, we knew immediately that someone had used our credit card, so we were grateful that the company had called us before any further damage could be done.

After doing some detective work, we learned how our credit card number was obtained by the person who was making the purchases.

We had recently traded in our car for a new one at a major dealership. The dealership then sent our old car out to be detailed by an independent business. In the course of cleaning our car, one of the employees found one of our credit card receipts. The receipt must have fallen between the seats and out of view.

We learned a lesson about misplacing a credit card receipt, but, I did not feel good about having to report the incident to the police, because the fraudulent spending spree had been for a baby bed and other new baby items.

At 1/03/2006 8:19 AM, Blogger G_in_AL said...

I'm still just bewildered why we dont make vendors responsible for this stuff. If Capitol One gives out a line of credit to someone who is illegally pretending (is there any other way?) to me be, then Capitol One should be the one to bear the brunt of any/all charges, fees, or other financial burdens.

If this happened, I would be willing to place money on the bet that ID theft would almost dissapear.

At 1/03/2006 9:56 AM, Blogger Pastorius said...

I've had my identity/credit card stolen on more than one occasion, and each time the Credit Card company assumed responsibility. I was absolved of all the debt rung up by the thief.

Has anyone had a less positive outcome?

At 1/03/2006 10:03 AM, Blogger Shah Alexander said...

Great post. Those who commit themselves to ID theft try to find any kind of ways to steal IDs. Sad reality.

At 1/03/2006 12:42 PM, Blogger Papa Ray said...

You have to be sure that in your state that the Credit Card company absolves you of all false charges (except 55.00 dollars in some states). If you don't see it in writing, you will be responsible for all charges on your CC.

All major Credit card companys have on line websites where you can check your charges and payments at any time.

Use it.

Also, be aware that if they open new accounts and don't pay them. You most likely won't know about it until you check your credit report and see the accounts and the no pay on them. Getting this fixed sometimes is not simple, sometimes takes years and yes, sometimes you better get a lawyer. Ca-ching$...

Papa Ray
West Texas

At 1/03/2006 12:42 PM, Blogger American Crusader said...

Fortunately we've been able to avoid identity theft. I'm surprised that online identity theft only accounted for a small portion of the total amount. We do the usual shredding of bank information and other documents that hold personal information, plus using cash also helps. For every technological advance there seems to be a negative consequence. I wonder what new classes of crimes await us in the future.

At 1/03/2006 4:40 PM, Blogger LASunsett said...

This has got to be a source of ulcers in a lot of people. I hope this turns out well for you, AOW.

At 1/03/2006 9:14 PM, Blogger Elmer's Brother said...


Identity theft if the largest crime in our state. While I have not been the victim of identity theft, one of the banks that my government visa was from had it's records broken into online and they put a fraud alert on my account. This is great information. Thanks.

At 1/04/2006 8:24 AM, Blogger Always On Watch said...

As serious as credit-card theft is, it usually doesn't end as badly as identity theft. For one thing, theft of credit cars has limitations on the liability for the honest consumer, as Bassizzzt, Papa Ray, Bonnie Blue, and Pastorius have pointed out above. The one time that my husband had his credit card stolen (We think it fell out of his pocket), the credit card company called us within a few hours because of the size, frequency, and types of purchases: among them, multiple gas-tank fills within a matter of minutes and sizeable clothing purchases atypical of our purchasing pattern.

I am a cautious person. Long before the advice came out, I removed my SSN from my driver's license. Unlike several of my friends, I didn't include my SSN on my personal checks. I didn't fall for any phishing scams. The mail doesn't sit for hours in my mailbox. Nevertheless, the break-in at my accountant's office has brought the possibility of identity theft into my life. The accountant I used is one in a huge, well-respected firm, which has supreme safeguards (No H&R Block for me!). I also realize that various of my past employers have my SSN in stowed files; a sneaky enough person could get to those files.

G has a good point: If Capitol One gives out a line of credit to someone who is illegally pretending (is there any other way?) to me be, then Capitol One should be the one to bear the brunt of any/all charges, fees, or other financial burdens.

If this happened, I would be willing to place money on the bet that ID theft would almost dissapear.

I wonder why G's suggestion isn't the reality. If someone cashes a check made out to me, the bank is responsible for not requiring accurate identification. Why isn't a credit company held to the same standard? Sometimes I think it's harder to get a library card than to open a credit account!

None of us is 100% safe from identity theft, even though we may take all the precautions!

At 1/04/2006 5:12 PM, Blogger G_in_AL said...

sadly AOW, I know why... money. These companies dump tons of money into Washington to make sure something like this never happens.

At 1/04/2006 7:27 PM, Blogger Always On Watch said...

As usual, it's all about the money.

At 1/11/2006 8:33 AM, Blogger Storm said...

Response to Felis (Felis original comment listed below)

To any reader I am a subject matter expert my comment are not based on abstract research but on the hundreds of cases I have investigated.

Felis not as much as you might think because frankly who cares illegals can get benefits.

but I would like to take this opportunity to tell the liberals your are dopes--the typical identity and or credit card thief such as the scenario of the first poster will not only get dinner but pay their power bills and phones when the credit card company reverses the charges the suspect goes down to a government office and takes our taxes dollars to pay the past due balance

Felis said...
Do people may use you identity to collect welfare benefits etc?
It is really scary stuff.

I sincerely hope everything will turn out OK in your case.

1/03/2006 12:20 AM

At 1/11/2006 8:47 AM, Blogger Always On Watch said...

I've been waiting for you to stop by here. Right now, I'm experiencing a lack of email notification of comments, so I'm lucky to have found your comment so soon after you made it.

pay their power bills and phones when the credit card company reverses the charges the suspect goes down to a government office and takes our taxes dollars to pay the past due balance

Do I understand this correctly? When charges are forgiven, taxpayers' dollars pick up the tab? If so, how much does that dollar amount total up to, per annum or per capita?

BTW, this article didn't get very many attention. Perhaps I went too long, but I have a tendency to be thorough. I may shorten it, then rotate it back to the top when my schedule gets so busy that I don't have much time to write for my blog.

At 1/11/2006 8:58 AM, Blogger Storm said...

Response to G

G I do not think you truly understand the criminal offense of ID Theft.

The main problem with your proposed solution is that you are suggesting Capital One be held civilly for being a victim.

Two points
1) There is no way for Capital One to know if the victim is lying. Yes I actually unfound cases because I has discovered the victim was aware of or actually made the purchases.

2) It depends on who ends up being the financial loser if Capital One sets of the account then they will more be the loser but if the suspect merely steals your number and the merchant is dumb enough to take the number over the phone and make $4,000 worth of furniture available for pickup then the merchant eats it.

But no matter what Capital One in 99% of cases is not going to help you with the costs (time and money) of contacting the police, equifax, etc. (the exception relates to companies that pay for monitoring services because their maniframes were compromised Choicepoint)

Perhaps I do not grasp which fees you are taking about there are finance costs and costs incurred by the victim trying to undo the damage. What is a person's time worth?

G said...
I'm still just bewildered why we dont make vendors responsible for this stuff. If Capitol One gives out a line of credit to someone who is illegally pretending (is there any other way?) to me be, then Capitol One should be the one to bear the brunt of any/all charges, fees, or other financial burdens.

If this happened, I would be willing to place money on the bet that ID theft would almost dissapear.

1/03/2006 8:19 AM

At 1/11/2006 10:07 AM, Blogger Storm said...


I can only guess

In my region of the country the supplier of power reported in excess of $300,000 known fraud using credit cards, I have no number for ID theft

I do not have a hard number but probably 75% of the credit card thieves have less than stable income and children so they probably sought some form of public assistance the rest choose to remain annyomous and receive all income from crime sources. Seriously I once had a suspect brag that she did not pay for anything.

At 1/11/2006 11:07 AM, Blogger Storm said...

G and others

The problem is Social security and we the consumers.

I agree that lobbyists are partly to blame for the current system in particular moronic left wing organizations like the ACLU. The Social Security System still uses virtually the same type of card from the 40's. The card has security features but no one knows the features. Since the card has no photo, no one actually asks the card and if an employer does it can easily be replicated. The ACLU and others claim that putting a photo on the card would some sort of privacy violation. Hello I can get your photo from your Driver's License.

The government and we allowed this number to be used in the civilian which I believe was the stated fear of FDR when he signed this nonsense into law.

We the consumers wanted convenience; checks in the mail, internet transactions, phone bill paying, check orders from non banks etc and now we all sit in wonder as to how and why the criminals and terrorists are able to exploit our financial grid.

The last part is probably the most troubling part. Terrorists have a much greater understanding of our financial system than we do.

Sorry if I went on at length but this something I know a lot about and frankly I am troubled by the complete naivety and complete ignorance of Americans.

At 1/11/2006 11:13 AM, Blogger Storm said...


perhaps you went on too long but this a significant topic and one that relates directly to your mission as terrorists routinely use fraud to generate the cash needed to attack us.

At 1/11/2006 6:12 PM, Blogger Always On Watch said...

Terrorists have a much greater understanding of our financial system than we do.

I haven't yet had time to look at the pdf file. Quick question? Do terrorists looking for financing account for a substantial portion of fraud/identity-theft cases?

At 1/12/2006 12:33 PM, Blogger Storm said...

I can not give you a percentage but fruad, illegal drug sales, and contributions from friendly countries like Iran and Iraq are likely the primary sources of revenue for terrosits.

Getting a government to give you money is easy we even intercepted several attempts by Osama to get money from Sadaam.

You all know about drugs but fraud costs less in start up costs in fact you can buy the computer using fraud (the perfect self start up company) if you get caught you will not go to jail.

The pdf file is really there for liberals who can not recognize a fact if it gets into a plane and flies the plane into a building.

The file comes from the Dartmouth Institute which I would guess is hardly a right wing organization. It goes into recruitment methods, how to commit fraud for securing funding for operations, and in general paints a vastly different poicture of the intelligence motivation and knowledge of Osama and others than the media prtrayal of disgruntled camel herders.

Sorry for the spelling errors typing and talking

At 1/12/2006 12:40 PM, Blogger Storm said...

oh sorry, i did not answer your answer exactly

generally cases I can identify here as likely related are more about false pretense ie lottery scams, or sending counterfeits checks and asking for wire transfer back, also other free grants only pay $299 for more instructions.

I have never calculated a percentage because sometimes you can not tell who the suspect is exactly.

However, let me offer this.

The Dartmouth information came to me via the a Secret Service meeting about terrorists using fraud. The dartmouth report is the only part I can share with the public.

At 1/12/2006 10:08 PM, Blogger Always On Watch said...

Okay, I will take the time to read that pdf file--and thoroughly.


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