California Credit Law Blog

Identify theft affected somewhere between 8 and 15 million Americans in 2005, according to Tom Abate's article in today's San Francisco Chronicle. One report just issued by the Federal Trade Commission estimated that identity theft struck about 4% of all adult Americans in 2005. Those numbers mean that identity thieves are twice as likely to target American consumers as are street criminals.

But another report issued last February estimates that the problem is much worse than the FTC calculates. The market research firm Gartner's study suggested that 15 million Americans had been victimized in the 12-month period ending August 2006. If these numbers are right, you're four times as likely to be an identity theft victim as to be a street crime target.

The bottom line is, no one really knows how much identity theft occurs in the U.S. And what knowledge we do have about data breaches is only possible because California and about 35 other states require companies to reveal when certain sensitive data are leaked. Congress has so far failed to pass any equivalent federal law.

How do identity thieves gain access to so much sensitive consumer information? According to private sector data security expert Larry Ponemon, half of the data breaches were due to lost laptops. Malicious employees accounted for another 9 percent. A whopping 40 percent of the breaches involved a third party--either an outsourcer, consultant or other business partner.

Continue reading "Identity Theft Mostly Caused by Lost Laptops, Third Parties" »

Posted by Carol McLean Brewer | Permalink | Email This Post

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Victims of identity theft may opt to have their credit files frozen--meaning no one, not even creditors, may access their credit reports without the victim's consent. Laws in 39 states, including California, have mandated this option. The credit reporting agencies have opposed these laws, but on October 25, 2007, Equifax announced it would extend the right to freeze consumer files to all 50 states according to its press release.

The California Office of Privacy Protection website www.privacyprotection.ca.gov has details on how victims may freeze their credit files.

Posted by Mark F. Anderson | Permalink | Email This Post

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The California Office of Privacy Protection exists to protect consumers from identity theft. Their site has valuable information for victims of identity theft. For example, one may learn how to "freeze" your credit files. The site provides step by step instructions on how to stop third parties from accessing your credit. The site collects a great deal of information on identity theft as well.

Posted by Mark F. Anderson | Permalink | Email This Post

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Identity thieves can deplete your available credit in no time. Dateline recently tried an experiment and documented it on video to test just how quickly sophisticated identity thieves could operate. It teamed up with a major credit card company which issued a couple of genuine credit cards under fake names. Then Dateline, with an identity theft expert posing as a thief, posted the bogus credit cards in underground chat rooms on the Internet. A fraud investigator for the credit card company monitored how much time it took for a thief to use the fake cards and max out the cards' $1,000 credit limit.

For the first credit card, the initial "hit" took only 12 seconds. The thief first began to make fraudulent charges in small amounts--like an $11 contribution to the American Red Cross--apparently to see if the card really worked. Once the thief figured the card was genuine, charges began to pile up in increments of hundreds of dollars. In less than 13 minutes, the credit card was declined for reaching its $1,000 limit.

The second credit card was maxed out in less than two minutes. This time the thief charged more than $700 in dog food alone. Illustrating the prevalence of identity theft wordwide, while the bogus card was issued for a fake person in Washington, D.C., someone in Chile charged the dog food.

The results of Dateline's experiment are illuminating. Identity thieves are operating wordwide through the Internet, and they are lightning quick and brutally efficient.

Posted by Carol McLean Brewer | Permalink | Email This Post

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Will and Gracie Tan suffered through identity theft, fake credit cards in their name, had their bank accounts raided and then learned that their tax refund was going to someone else, as Ken Garcia recently reported in the San Francisco Examiner. The Tans' horrible experience illustrates how much damage sophisticated identity thieves can inflict upon consumers' credit--and their bank accounts--with a few key items of identification.

The Tans' problems seems to have started last year, when they refinanced their mortgage. Garcia's column doesn't say who actually stole their identifying information, only that a ring of thieves in El Paso, Texas ended up with it. Those thieves knew what they were doing--they promptly opened new fraudulent credit card accounts and stole $5,000 from the Tans' checking account. Apparently because the Tans were diligent in monitoring their bank accounts, they were able to get a refund from the Bank of America. They also had a lucky break in discovering that Macy's said they owed $1,500 that they hadn't charged, which led to their discovery that other fraudulent accounts had been opened in their name. But then they learned from the IRS that a tax refund was on the way, and they hadn't filed yet.

According to Garcia, The Examiner reported recently that the number of fraudulent tax filings is on a steady rise, with tax cheaters using computers to create fake W-2 forms that IRS officials admit are nearly identical to the real thing. IRS officials and tax preparers say 2007 may be a banner year for tax fraud. Worse, once a fake tax return has been filed, consumers are unable to file their legitimate tax return electronically. This creates a bureaucratic nightmare for consumers, especially when they are expecting refunds which they discover are being sent to someone else.

Posted by Carol McLean Brewer | Permalink | Email This Post

Posted In: Identity Theft

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