Identity Crisis: Pervasiveness of Identity Theft and Potential Liability Cause Property Managers to Reconsider How They Handle the Personal Records They Access and Discard on a Regular Basis
Whiteley, Michael, Journal of Property Management
One of the nation's most celebrated cases of identity theft--triggering identity theft legislation and a Lifetime women's network movie--started with an apartment application being left on a property manager's desk in San Diego.
In 2000, Michelle Brown, age 29 and an international banker at the time, testified before Congress about the unraveling of her life as a result of identity theft. Brown said she first learned her life had been plundered when a bank's loan officer called her in January 1999, regarding her first payment on a new truck--one she'd never purchased.
Brown soon learned a perpetrator had stolen and copied her apartment application a year earlier and went on a spending spree, amassing more than $50,000 in goods and services. The thief's graduation to drug trafficking eventually got Brown arrested and spawned a bogus prison record.
Brown's case might be exceptional, but identity theft is not: It is the nation's fastest growing crime, according to information from the Federal Trade Commission. Awareness of the problem is growing among real estate managers because of the nature of the crime--the theft of sensitive information they often access and throw away.
PAPER TRAILS PAY OFF THIEVES
Identity theft comprised 37 percent of consumer fraud complaints filed with the Federal Trade Commission in 2005. The commission puts actual losses for the complaints it received between January and December of 2005 at $680 million, based on more than 680,000 cases of consumer fraud and identity theft. Linda Foley, founder of the Identity Theft Resource Center in San Diego, said the average stolen identity nets thieves about $17,000.
While the publicity surrounding the crackdown on identity theft has focused on high-tech schemes to steal computer data over the Internet, 90 percent of identity theft victims lost sensitive records through non-electronic channels in 2005, according to the Javelin Identity Fraud Survey, released in January 2006 by the Council of Better Business Bureaus Inc.
"People should continue to be cautious of fraud online," said Javelin founder Jim Van Dyke. "But what people also need to understand is they need to be just as cautious everywhere else."
Lost or stolen wallets, credit or debit cards, and checkbooks are the most common source of information breach, according to the survey. Friends, acquaintances, relatives or in-home employees, as well as corrupt business employees stealing information, were the next major sources of identity theft.
Identities stolen from overall property rentals, however, represent a little more than one in every 100 complaints filed with the Federal Trade Commission. One percent of identities were stolen from the garbage in 2005--a statistic probably closely related to people increasingly shredding documents, according to the Javelin survey.
"It doesn't seem [like] the biggest burden is on our industry," said Jeanne Delgado, vice president of multi-family housing for the National Multi Housing Council, of the crackdown on identity theft.
TAKE SHREDDING PERSONALLY
While identity theft incidents might not be overwhelming the property management industry, real estate managers should exercise caution with the personal information they maintain on residents and applicants, said Chuck Achilles, vice president of legislation and research for the Institute of Real Estate Management.
Potential liability and legislation are spurring real estate managers to consider how they manage their records and what to discard, when. Achilles said property managers should store residents' or applicants' sensitive records--those with social security and credit card numbers or other vulnerable information--in a private, secure system.
Dallas-based Lincoln Property Co., which owns or manages 87,000 units in New Hampshire, beefed up …
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Publication information: Article title: Identity Crisis: Pervasiveness of Identity Theft and Potential Liability Cause Property Managers to Reconsider How They Handle the Personal Records They Access and Discard on a Regular Basis. Contributors: Whiteley, Michael - Author. Magazine title: Journal of Property Management. Volume: 71. Issue: 3 Publication date: May-June 2006. Page number: 20+. © 1999 National Association of Realtors. COPYRIGHT 2006 Gale Group.