FTC Finds Identity Theft Widespread
Byline: Tim Lemke, THE WASHINGTON TIMES
More than 27 million Americans have had some amount of personal information stolen from them in the past five years, the Federal Trade Commission said yesterday, and nearly 10 million people have been victims of identity theft in the last year alone.
The FTC released the first large government-sponsored survey on identity theft and said the problem is far worse than officials had believed. Last year, the crime cost consumers more than $5 billion in expenses, while costing banks and other businesses $48 billion.
Victims of identity theft spent nearly 300 million hours total and an average of $500 each trying to resolve problems when personal information - such as credit-card or checking-account numbers - were stolen.
"Identity theft is a big-ticket item in terms of money and time," said Howard Beales, director of the FTC's Bureau of Consumer Protection. "We had never been clear and we had never had any previous reliable estimates to the problem. [These figures] were considerably higher than I expected."
The FTC randomly surveyed 4,057 adults by phone in March and April. Based on the responses, the FTC estimated that 9.9 million people, or 4.6 percent of the population, were victims of identity theft in 2002 or the first two months of 2003.
More than half of those people said they had information stolen relating to current credit cards or other accounts, while an estimated 3.2 million people have had someone illegally open a new account or commit other fraud in their name.
The FTC said a thief who steals personal information and uses it to open a new account can often cause more financial damage and hassle than if he had stolen existing account information. Twenty-nine percent of victims reporting fraud involving new accounts said they spent 40 hours or more resolving the issue, compared with just 7 percent of victims who suffered thefts involving existing accounts.
Thieves stealing information to create new accounts got $5,000 or more in 36 percent of cases, compared with 6 percent for those who used existing accounts.
The FTC said consumers are often unaware that new accounts have been opened using their names and find out only when they see copies of their credit reports. The agency has pushed for credit reports to be made available to consumers for free.
The agency also reiterated its support yesterday for a universal standard of "red flags" that would help bank regulators spot identity-theft cases, and said identity-theft laws should be strengthened to make prosecution easier. …