Identity Theft: FTC s Program for Victim Assistance Pat Leigh, FTC Investigator. ID Theft - Fastest Growing Scam Affecting Consumers and Businesses

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1 Identity Theft: FTC s Program for Victim Assistance Pat Leigh, FTC Investigator ID Theft - Fastest Growing Scam Affecting Consumers and Businesses 500,000 to 700,000 people or one per minute will have their identities stolen this year Avg. victim: $ 808 spent to clear up credit record; 175 hours of effort; over 23 months to set things straight Consumers are not the only ones hurt Businesses are being affected by identity theft Estimated cost: $4 Billion in sham transactions

2 It Can Happen to Anyone 'Forbes 400' targeted for ID theft; busboy held By Tom Hays The Associated Press NEW YORK -- A restaurant busboy is accused of using the Internet and Forbes' magazine list of the richest people in America in a scheme to steal millions from such figures as Steven Spielberg, Warren Buffett, Martha Stewart, Oprah Winfrey, Ross Perot and Ted Turner. Police are calling it one of the most ambitious identity-theft schemes they have seen. They are still tracing the complex electronic trail to determine exactly how much was stolen but fear it could be well into the millions. New York police investigators arrested Abraham Abdallah, a 32-year-old highschool dropout, on March 7 as he allegedly picked up equipment to make phony credit cards. Court papers say Abdallah was carrying the Social Security numbers, home addresses and birth dates of 217 CEOs, celebrities and tycoons. The information was scribbled in the margins of a tattered copy of Forbes' "The 400 Richest People in America." What is Identity Theft? When someone else uses your personally identifying information without your knowledge or permission to Obtain Credit Cards Get Wireless or phone products, services Get Loans and Mortgages Obtain Employment Commit Many Other Frauds

3 How Does an Identity Thief Get Your Information? Stealing files from places where you work, go to school, shop, get medical services, bank, etc. Stealing your wallet or purse Stealing information from your home or car Stealing from your mail or from mail in transit Calling you or sending an with a bogus promise or purpose Techniques Identity Thieves Use to Get Information Dumpster Diving Shoulder Surfing Breaking & Entry Bribing or inserting corrupt employees Steal files Run unauthorized credit checks Skimming Hacking Pretexting Credit reports Solicitations Web sites

4 How Does an Identity Theft Use Your Information? Obtains Credit Cards in your name or makes charges on your existing accounts (42%) Obtains Wireless or telephone equipment or services in your name (20%) Forges checks, makes unauthorized EFTs, or open bank accounts in your name (13%) Works in your name (9%) Obtains personal, student, car and mortgage loans, or cashes convenience checks, in your name (7%) Other Uses of your Personal Information Commits crimes in your name (2%) Gets medical services in your name (2%) Gets Internet services or sends s in your name (1%) Leases an apartment or house in your name (1%) Files bankruptcy in your name (.5%)

5 Consequences of Identity Theft Identity thief seldom pays bills for debts incurred under your name You may not discover for months or years You are then saddled with bad credit report Due to bad credit report, you may be denied new credit, loans, mortgages, utility service, or employment Where criminal record created in your name, you may fail background checks for employment, firearms, etc., may even spend time in jail The FTC s Role in IDT Under the ID Theft Act, the FTC is required to: Create a database of victims complaints Provide helpful information to victims of identity theft Refer victims complaints to: law enforcement agencies credit bureaus

6 Core Components of FTC s Identity Theft Program Toll-free phone number for victims ID THEFT ( ) Web site: Consumer education materials Identity Theft Data Clearinghouse Consumer Sentinel Access Case Referral Program FTC Hotline Phone Counselors Assist Victims Advise consumers how to minimize risks what first steps to take to recover subsequent steps, referrals to other government agency resources Send out educational materials Log consumer complaint information into the ID Theft database

7 FTC s Outreach & Consumer Education ID Theft: When Bad Things Happen to Your Good Name I-877-ID THEFT Bulk orders: publications@ftc.gov Booklets Links Complaint form How Can You Protect Yourself from ID Theft? Today: Order your credit reports review carefully Opt out w/credit Bureaus, Creditors, DMA Read your SSA Annual Earnings Stmt. Put passwords on your accounts Strong passwords not Mothers Maiden Name Secure your personal information in your home from others (roommates, employees) Ask about security procedures in your workplace

8 Other Steps You Can Take To Prevent Identity Theft Ongoing Basis: Do not provide personal information over the phone, Internet, or through the mail Thieves pose as reps from banks, ISPs, gov t agencies Scams presented as a reasonable mistake regarding your account Guard mail and trash from theft Pay attention to billing cycles Be wary of promotional scams Keep your virus protection software updated What Should Victims Do? Immediately: Call fraud departments of CRAs and get fraud alerts and victim statements placed on credit reports, ask for free credit report Contact creditors fraud departments, report fraudulent accounts and charges (ask if they accept IDT Affidavit, if not, ask for their fraud packet) Report to local police, get copy of report (be persistent)

9 Next Steps for Victims Notify each credit reporting agency of all of the inaccuracies on your credit reports, including Inquiries. Call and follow up in writing. Notify each creditor where the identity thief committed fraud in writing. Get creditors to provide you something in writing stating they have closed the accounts and absolved you of the fraudulent debts Resolving Credit Problems Credit Cards - Know your rights (PAGE 16) The Fair Credit Billing Act establishes procedures for resolving billing errors on your credit card accounts. Write to the billing inquiries address within 60 days after the first bill containing the error was mailed to you.

10 Resolving Credit Problems ATM Cards Debit Cards and Electronic Fund Transfers - Know your rights (PAGES 17-18) The Electronic Fund Transfer Act Limits your liability for unauthorized electronic fund transfers. Report lost or stolen ATM and debit cards immediately The amount you can be held responsible for depends on how quickly you report the loss. Report your ATM card lost or stolen within two business days of discovering the loss or theft, your losses are limited to $50. AFTER two business days, but within 60 days after a statement showing an unauthorized electronic fund transfer, you can be liable for up to $500 of what a thief withdraws. MORE than 60 days, you could lose all the money that was taken from your account after the end of the 60 days and before you report your card missing. Resolving Credit Problems A Special Word About Lost or Stolen Checks While no federal law limits your losses if someone steals your checks and forges your signature, state laws protect you. Most states hold the bank responsible for losses from a forged check. At the same time, however, most states require you to take reasonable care of your account. For example, you may be held responsible for the forgery if you fail to notify the bank in a timely manner that a check was lost or stolen. Contact your state banking or consumer protection agency for more information.

11 Dealing with Debt Collectors Fair Debt Collection Practices Act (PAGE 17) Prohibits debt collectors from using unfair or deceptive practices to collect overdue bills that a creditor has forwarded for collection. Stop contact by writing a letter Request written evidence of the debt and your liability New Tool: ID Theft Affidavit Standard form to dispute in writing the charges caused by identity thief Asks creditors to absolve victim of all charges Victim can submit one form to many creditors, instead of separate, different forms to each creditor. Available at or 877-ID-THEFT or from many creditors

12 How To Fill Out the Affidavit Fill out the core information Your name, address, etc. and where you lived at the time of the fraud events What you know about how the fraud occurred Attach documentation if available Photo id, proof of residency when the fraud occurred, and police report Complete Individual Fraudulent Account Statements for Each Company Involved Tells each company which account you need to have closed and the debt absolved Where to Send the Affidavit Each company where the id thief opened an account in your name gets the core information A particular company gets only the Fraud Account Statement listing the account opened at that company Credit Reporting Agencies get core information and Fraud Account Statements for all companies PLEASE do not send to the FTC

13 New Initiative: Police Report Initiative If Victim Provides CRAs with Police Report: CRAs will block the inaccurate information on victim s credit report resulting from identity theft Thus, when victim s credit report is sent out, it will be correct Victims won t be denied jobs, credit etc. because of the id thief SUMMARY: PROVING YOU ARE A VICTIM Complete ID Theft Affidavit Get Police Report; send to CRAs, with Affidavit Send creditors any fraud packets they require with Affidavit & copy the CRAs Get creditors to provide you resolution letters Organize your documents, keep copies

14 WHAT HAPPENS TO CONSUMER COMPLAINTS FTC Identity Theft Hotline Victim of Identity Theft If Investigated IDT Data Clearinghouse Referral (USSS Task Forces) Internet Database Access Law Enforcement Investigations Coordinating Efforts Among many partners Federal Agencies State/Local Gov t Private Sector On many fronts Data sharing Case Referrals

15 FTC s Law Enforcement Coordination Information shared with local, state and federal law enforcement through: ******CONSUMER SENTINEL****** Law Enforcement Cyber-Tool Real-time, desktop access through a secure website Coordinate cross-jurisdictional investigations with ALERTS function Track particular complaints or patterns with AUTO-QUERY. Contacts and Resources Identity Theft Data Clearinghouse Federal government s centralized database of identity theft victim complaints Available free of cost over Sentinel Network Sources: FTC Hotline, online complaint form, Social Security OIG Contents victim contact information suspect information: name address phone relation description of crime, details what financial institutions were involved police report number, department name

16 FTC s Identity Theft Program Resources for consumers ID THEFT ( ) When Bad Things Happen to Your Good Name ID Theft Affidavit Police Report Initiative publications@ftc.gov Recovery Resources for Victims ID-THEFT or or US Trustees for bankruptcy US Taxpayer Advocate for tax fraud Social Security Office of Inspector General WA Attorney General or wa.gov/ago

17 Consumer Resource Centers statewide can help refer you to the proper authorities and assist consumers and businesses regarding the new law. Consumer Resource Centers can be reached at or wa.gov/ago Recovery Resources for Victims A man said his credit card was stolen but he decided not to report it because the thief was spending less than his wife did. New Yorker magazine cartoon: Larry had his identity stolen but they sent it right back.