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Identity theft is an act by one individual to assume some or all of the identity of another individual with criminal intent. It is also the fastest growing crime in America. In the first quarter of 2005, for example, there were major security breaches at identity consolidators and transmitters such as Lexis Nexis, T-Mobile USA, ChoicePoint and Bank of America.
According to the Federal Trade Commission, more than 27 million Americans were victims of ID theft in the last five years (10 million of those in the last year alone), costing businesses and financial institutions $47.6 billion and consumers $5 billion in direct costs. Of course, institutional losses are passed on to all consumers, but victims themselves fared far worse, spending on average more than 600 hours apiece attempting to regain control of their identifying information.
In an era when technology makes it possible for private sector consolidators to centralize personal identifiers into national databanks – everything from your credit history to biometric information like your DNA profile – that same technology makes the theft of such information much easier.
To combat ID theft, Congress passed the Identity Theft and Assumption Deterrence Act back in 1998, which made it a federal crime to use identifying information from a third party in the commission of a crime. Additional measures like the Gramm-Leach-Bliley Act, the Health Insurance Portability and Accountability Act and the Fair and Accurate Credit Transactions Act were passed to enhance both ID protection and ID-theft enforcement. In addition, because of the global nature of ID-theft crimes, new codes of practice have been implemented by the International Organization for Standardization. But these efforts have done little to slow the growth of this scourge.
As a Homeland Security measure, Congress is now considering HR 418, “The Real ID Act,” which potentially makes the central government an ID consolidator by linking state DMV and other information databases. HR 418 has prompted an outcry from both conservative and liberal quarters concerning privacy and potential civil-liberties abuse, and the concerns are justifiable. As the volume of data collected for security purposes increases, we’re certain to see a corresponding increase in efforts to gain unauthorized access to that data.
However, these complaints are too little too late. Each American already has a national ID card – it’s called a Social Security card.
The use of Social Security numbers for identification purposes was somewhat limited until 1962, when the Internal Revenue Service co-opted it for official taxpayer identification. Ten years later, the notice “For Social Security Purposes – Not For Identification” was removed from Social Security cards.
Currently, SSNs are the most frequently used identifier in the U.S. They’re required for credit and banking relations, employee files, academic records, licenses and certifications, medical records and health-insurance accounts, passports, and phone and utility accounts. In fact, just about any application for anything asks for your SSN – making it the key identification, authentication, and tracking number for all Americans. SSNs are defacto identification for all military personnel. SSNs are now required for any dependent over the age of one year – making it the ultimate cradle-to-grave identifier.
When identifying data was maintained on paper, the risk of ID theft was limited. But with today’s ubiquitous use of SSNs as personal identifiers in electronic databases, the risk is enormous, and the process of ID theft is greatly simplified.
Obtaining an SSN for just about anyone over the age of 18 is easy, primarily because so much information is being posted online – from traffic records to property deeds. For example, a simple search engine inquiry quickly produced SSNs for such notables as former Secretary of State Colin Powell and current CIA Director Porter Goss.
A typical case of ID theft that started with a swiped SSN is that of Jim Moehring, a sports-arena manager. His SSN was pilfered from a county clerk’s website. The thief went on to obtain seven credit cards with the fraudulent SSN and left Moehring with $11,000 in debt to explain to his creditors.
But ID theft can often have much more severe financial consequences. John Harrison, a salesman, has spent countless hours trying to reclaim his identity since it was stolen four years ago. The ID thief who assumed Harrison’s identity spent more than $265,000 in four months – on Harrison’s credit. “Lowe’s, Home Depot, Sears, JC Penney, two cars from Ford, a Harley, a Kawasaki motorcycle,” says Harrison, and the list goes on. Though the thief was ultimately arrested and convicted, Harrison has not regained control of his identity and remains $140,000 in debt.
Eric Gertler, an expert on ID theft prevention and reconciliation, notes, “The problem with identity theft is that once you’re a victim you’re guilty until proven innocent. You need to go to the financial institution and prove to them that you’re not just some other deadbeat trying to get away with not paying your bills.”
Perhaps most alarming are the instances in which criminals use stolen identifiers when arrested for felonious crimes, including murder. In such cases, “guilty until proven innocent” takes on a whole new meaning.
Quote of the week…
“Our government has made decisions to control the social-security card without any plan for the fallout. While the social-security number was created with a limited purpose, it has become a passport to our society and our way of life. Without a social-security number, landlords refuse to rent apartments, local governments refuse to issue driver’s licenses, telephone companies deny service, and the list goes on.” –Stephen Joel Trachtenberg, President, George Washington University
“When should I suspect identify theft? Unfortunately, the answer is ‘Always.’ This may be as simple as using your telephone-calling-card number to place long-distance calls on your account. It may involve getting hold of information that identifies you, like your Social Security number, and using it to open new credit accounts or to lease a car in your name, and leave you with the bills. It may even mean having someone take on your identity to create a new life in which the thief rents an apartment, applies for government benefits, gets a job, or – if you’re really unlucky – commits a crime that gets you sent to jail.” – Amanda Welsh, Ph.D.