Metro Pulse/Cover/Identity Theft

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Take Preventive Measures

Do not give out any personal information over the phone or online, such as birth date, Social Security number, or any bank account or credit card numbers, unless you are the one who initiated the contact.

Shred all documents you discard, such as canceled checks, bills listing account information, credit-card statements, credit-card offers—anything that contains your personal numbers.

Don’t put your bill payments in your mailbox with the flag up. Use a locked U.S. Postal Service mailbox or the post office itself for such mailings.

Look over your bank and credit-card statements carefully for any suspicious withdrawals or charges.

Scan your bills and other mail for such identity-theft indicators as a change of address you did not order or evidence of an account that you didn’t open.

Do not have new blank checks delivered to your home. Pick them up at the bank.

Keep others at a distance when using an ATM. “Shoulder surfers” can get your account and PIN numbers if you don’t guard them.

Don’t write down your PIN numbers or passwords or carry them with you. Memorize them.

Protect your home computer with firewall software to prevent cyber-intrusion.

Stay alert to any signs of misuse of your name or your numbers in any financial transactions.

If You Suspect Identity Theft

Contact your credit-card providers and the financial institutions where you keep accounts.

Place a fraud alert with the three major credit reporting agencies:

Equifax
888-766-0088

Experian
888-397-3742

TransUnion
800-680-7289

Then file a police report, and notify the FTC’s identity-theft hotline at 877-438-4338.

Be Better Informed

Important Online Sources You Can Tap for a Better Understanding of the Problem:

The Federal Trade Commission’s site, filled with useful information and advice.

The FBI’s fraud complaint center.

ID Theft Center — a private non-profit organization devoted to prevention of ID theft.

Privacy Rights — a private non-profit consumer advocacy and privacy protection group.

Your identity, and your credit, is there to be stolen

by Barry Henderson

Three years ago, the U.S. Attorney for the Eastern District of Tennessee secured an indictment in Federal Court in Knoxville charging James Wayne Farmer, who had addresses here and in North Alabama, with multiple felony counts involving identity theft and bank fraud. The government charged that he had sought at least two million-dollar loans from Knoxville banks, using the Social Security number of a former associate and representing another person’s numbered investment account as his own collateral.

One of the banks reported the loan application as suspicious, and a followup investigation turned up evidence that he had obtained the confidence of an elderly widow and her son and used their credit cards to run up charges for which he was later ordered by the court to make $6,500 in restitution.

Farmer pleaded guilty to four counts of the indictment in an agreement that resulted in a six-year federal prison sentence, which he is now serving, according to court documents.

His case is far from unique, but federal, state, and local law enforcement authorities don’t know how far. The numbers are elusive. By any standards, it was a large case of identity theft and fraud, but it was one of the rare instances in which such fraudulent practices result in a reported crime, an investigation, and a conviction.

Most such crimes ordinarily involve lesser amounts of money, goods and services, and they slip through cracks that financial institutions and enforcement agencies are only just beginning to try to close.

“It’s a high priority,” says Will Mackie, an assistant U.S. attorney in Knoxville who has overseen investigations involving suspected identity theft in this district, “because of the number of people affected.”

Yet neither his office nor other law enforcement agencies have a grip on the numbers involved. They know only that the exposure to possible identity theft is very high. The rule of thumb is that if you have a bank account or a credit card or even a home mortgage, you are at risk.

The American Association of Retired Persons stated blithely in the February edition of its bulletin that “identity thieves hit nearly 10 million Americans last year.” It’s not so much that the statement was unsupported as it is that it was an estimate based on inconclusive data. It was AARP’s best guess. The AARP bulletin quoted experts, including Federal Trade Commission officials, as saying the number of cases has been doubling every year since 2000. The organization takes particular interest in the crime, because its members are in a class of older persons who are especially vulnerable. Many of them have long-established credit and are unfamiliar with the scams used to take advantage of them.

In Tennessee in 2002, the last year for which a compilation has been completed and promulgated by the FTC, there were 1,962 victims of identity fraud reported and confirmed. That’s out of about 161,000 such victims nationwide. While Tennessee’s reporting rate is lower than average for states, its rate of credit card abuse as part of identity theft is higher, at 48 percent, compared with the national average of 42 percent.

In spite of Tennessee’s 1999 acts establishing criminal and civil definitions of identity theft, statistics on the number of reports aren’t reliably accurate. They are often lumped together with other “impersonation crimes” and are not set out specifically.

Knoxville’s Police Department is no exception. “The number of complaints we do have,” says Deputy Chief Bill Roehl, head of the criminal investigation division, “were 37 in 2003.” He says he’s fully aware that many such crimes are reported only to credit agencies and that the victims never reach the police department. Of those 37 actual reports, according to Lt. Bobby Hubbs of the department’s crime analysis division, 29 are still being actively investigated, six arrests have resulted, and two cases were determined to be unfounded. But, because the department follows the Tennessee incident-based reporting system’s classifications of crimes, he says, “There is no way on the surface to know if these were truly identity thefts or lesser instances of impersonation.”

That kind of statistic-keeping gap seems to be a problem almost everywhere. Even in the rare instances that identity theft is reported to law enforcement, it’s such a young crime it’s not uniformly identified for what it is.

“We’ve not been aware of a case where an identity is stolen, charges are run up, and credit is ruined,” says Randy Nichols, Knox County’s district attorney general. He says he’s sure it’s happening, but it hasn’t been presented for prosecution by his office.

That doesn’t surprise Jack Greene. He’s dean of the prestigious College of Criminal Justice at Northeastern University in Boston. His college has recently established a unit studying “cyber-based crimes” involving illicit transactions in Internet activity.

Without being critical, Greene says matter-of-factly that “municipal police are prepared to deal with the theft of my car, or my dog, or my money, but not my ID. They don’t get it [such a crime] reported, and if they did, they wouldn’t know what to do with it.”

Greene says most credit-card fraud based on identity theft, which the FTC cites as making up 42 percent of crimes of stolen identity, is written off by credit providers as a cost of doing business. He says that, while the legitimate owner of the credit card may be liable for only $50 of the charges run up, if the unauthorized charges are reported promptly, the credit-card companies are hard-pressed to run down all the cases.

Still, such criminal abuses of credit often leave the victims’ credit ratings ruined, and the process for restoring the rating can be lengthy, complex, and left up to the individual victim. If credit providers ascertain the real identity of the perpetrator and determine that he or she has assets, they often try to recover their losses on their own, but the victim may be left out of the loop when that occurs, and the credit bureaus that maintain credit ratings are not automatically notified of anything except the victims’ unpaid accounts.

The FTC says that identity thieves use a wide variety of high- and low-tech methods to gain access to personal information that they use to bilk people. Its website lists a string of examples:

• They get information from businesses and institutions by stealing records from their own employers, by bribing or conning an employee who has access to such records, and by hacking into organizations’ computer databases.

• They pose as a legitimate business person, a landlord, an employer, or government official to convince people to divulge information on themselves or others.

• They steal from homes, mailboxes, wallets and purses, or rummage through trash of residences and businesses for cards or documents containing identification and credit information.

• They complete a change-of-address form to divert mail to another location.

Once in possession of such information, the thieves may use existing accounts but change the billing address so victims won’t know what’s occurring, They may open new bank or credit-card accounts in the victims’ names, take out auto loans, establish phone or wireless service, counterfeit checks or debit cards, even file for bankruptcy to avoid paying debts they’ve accrued—and avoid detection. In the ultimate insult, they may give your name if arrested, skip bond, and leave authorities to issue a fugitive warrant in the victim’s name.

Dean Greene at Northeastern says that, while local authorities are at a loss to respond to such crimes and lack the technology to do so, the FBI is currently hamstrung by the devotion of the bulk of its resources to collecting information toward preventing domestic terrorism.

Jurisdictional complexities are a main source of frustration for police and local prosecutors. The identity theft may have occurred in one place, while the actual fraudulent transactions have occurred elsewhere, often all over the map.

“They’re taking advantage of the geographic limitations of the justice system,” says John Gill, special counsel to the Knox County attorney general and a former U.S. attorney here as well.

To which Greene adds: “The barriers to enforcement are geographical, technological, and legal, and involve matters of privacy.” Credit-card companies won’t provide records of their customers without a court order or subpoena, even with the victim’s consent, both Greene and police and prosecutors lament, because of privacy issues. That problem often shields the thief, because the records are needed to determine if a crime was actually committed. “It’s a Catch 22,” says Atty. Gen. Nichols.

Nichols says that the technology requirements of an identity-theft investigation are such that “We can’t afford to pay for the expertise that it takes. The criminals, he says, use a level of technology that is “more sophisticated than we are.... We have one assistant D.A. who has a master’s degree in computer science, and he’s almost always tied up with investigations of child pornography and the like.”

Greene says a common problem, technologically, is that police or prosecutors gain the expertise to cope with identity theft, and the trained personnel are quickly grabbed up by private industry “at twice or three times the salary” and put to work in data security or some other aspect of internal computer investigative work.

Then, there’s the matter of amounts stolen, and where. Can police and prosecutors be expected to chase down a string of misdemeanor thefts across the nation based on a single stolen identity in their jurisdiction? No, says Nichols, who says the chore and expense of assembling witnesses to try cases from widespread criminal abuse of another’s credit makes prosecution practically impossible. “Get 40 people in here from New Jersey to Nevada to testify, and the case is continued? I don’t think so. It has to be a felony amount, and it has to be feasible to prosecute, and if it is, the feds should take it, and they probably will,” Nichols says.

“I know it’s happening,” Nichols says. “I know it’s growing. I’d like to get ahead of it. But I honestly don’t know how.”

Nichols says that he was approached on a recent trip to Nashville to discuss problems of child abuse and the law by state Sen. Jim Bryson of Franklin. “He asked me,” Nichols says, “if we [the Legislature] were to create a unit with two prosecutors and an investigator in each of the Grand Divisions who were devoted solely to ID theft, would that be something I’d support. Would it help? I had to answer that I don’t know.”

Bryson, who endured an episode of identity theft himself, is chairman of a legislative committee studying the problem and possible state responses to it.

“We’re looking to set up a task force to deal strictly with identity theft, to investigate and prosecute, and to be accountable for it,” Sen. Bryson says of the Joint Subcommittee of the House and Senate Commerce Committee. “We’re also trying to make trafficking in false identities a felony, so we can prosecute when a person is caught with multiple identification documents.”

Bryson explains his experience with identity theft. “I got a call one day from a credit-card company, asking me if I’d applied for a new card. They called because the address on the application was not the address they had for me.

“I immediately called the credit-reporting bureaus and put in a theft warning. I got three or four more calls,” Bryson says, before one came in from a store in Los Angeles, where the card applicant standing downstairs was using Bryson’s name. “I said, ‘arrest him,’ and they did.”

He later learned that the man had rented an apartment, obtained utilities, and opened a bank account in Bryson’s name. He says he was interviewed by police from L.A., but that’s the last he’s heard of the outcome of the case.

“We need to get this under control. It’s one of the fastest growing crimes and it’s totally new to police agencies,” Bryson says. He says the state-only task force is just a first step.

Cybertheft of people’s lives is sort of like kidnapping, but without the body involved. Credit is the hostage and a string of illegal purchases is the ransom. People who are victimized suffer, sometimes for the seven years it can take until their credit and good name is restored, sometimes longer. It’s an experience never to be forgotten. It happens because they can’t protect their identities from being swept under in a riptide of greed by some other person or gang of persons who home in on the innocent or the naive, take their name and numbers and run with them for their own illicit profit.

The risk of identity theft can be reduced. It may not be eliminated, but the steps that people can take on their own are important. They are the only steps that may be practical and productive. Be informed, and beware, and it might not happen to you. If it does, for your own and others’ sake report it to the authorities and the FTC.