ITRC Reports On ID Theft in '07, Predictions for '08

• Dec 28, 2007

At the end of each year, the Identity Theft Resource Center(R) reviews identity theft trends and patterns throughout the year. It examines the new directions this crime appears to be taking. The basis of this information includes: victims and their experiences, ITRC's expertise, and data from law enforcement on the ways criminals are stealing and using personal identifying information and financial records.

Last year, ITRC predicted the following trends for 2007:

• There will be an increase in check fraud, check synthesizing and check counterfeiting.

• Phishing will continue to grow as a problem.

• Child, family and domestic identity theft victims will be acknowledged by law enforcement and companies.

• There will still be a lack of sensitivity and responsiveness toward victims by some law enforcement agencies, companies and government agencies.

• We will see more communication between various law enforcement entities in multi-jurisdictional cases, including the creation of regional task forces.

• Our score was five out of five. Identity theft continues to thrive despite efforts by governmental agencies, businesses, consumer advocates and law enforcement. As a crime of opportunity, identity thieves keep finding ways to steal, becoming more sophisticated and skilled at their craft.

2007 in Review:

• Check schemes are increasing as credit issuers make it more difficult to get credit without authentication. Not only are identity thieves stealing existing checks, they are also counterfeiting new checks that may contain your account number but a different name. Another ploy is to put your information on the top of a check and make up an account number, one you never opened.

• While the Internet is not the culprit, it has become a tool that identity thieves have embraced and abuse to find victims and commit fraudulent activities. Scamsters continue to exploit Web sites that promote online auctions and want ads, job hunting, dating (sweetheart scams) and social networking to find victims.

• Scams continue to flourish, generally falling into known categories: lotteries, jury duty, IRS audits, Nigerian, account verification or phishing, money laundering and check cashing (you deposit checks for a company and then send them the money).

• Family members are stealing identities from each other, including children's identities. Some of the cases turn into an "all in the family" situation. A recent ITRC study showed that the highest targeted category of children is between 0-5 years of age. Domestic identity theft continues to be a problem, often including former significant others.

• There is a symbiotic relationship between identity theft with other crimes to finance and enhance the growth of highly profitable crimes including meth and drugs, terrorism, and illegal trafficking of goods and persons.

• Misleading commercials continue to be shown on television that either glamorize identity theft or make light of this crime at the expense of existing victims. Sheila Gordon, ITRC's Director of Victim Services expressed this insight: "From the victim's perspective, there is nothing glamorous about this crime. It takes hours of hard work, internal strength, time and courage to clean up the mess left by an imposter. However, you rarely hear about these stories. You hear about the exciting exploits of 'Bonnie and Clyde' or movies like 'Catch Me If You Can.' In romanticizing identity theft, the media entices novices and young adults to try their skill at identity theft and to play the role."

• The failure to believe someone could steal your identity generates apathy; therefore, individuals fail to take proactive steps to minimize risk. The glamorizing of this crime, and the failure to focus on the national problem of identity theft has had a desensitizing effect on the public. The availability of consumer education is still limited and may be faulty.

• There continues to be a lack of understanding by friends, family and the general public regarding the emotional impact of this crime on the victims, both short term and long term. This information appears every year in ITRC's The Aftermath Study, which focuses on the individual.

• The ITRC saw an increase of products being sold to capitalize on the identity theft fears of consumers. Unfortunately, some of these products do not carefully explain their limitations and lead consumers into believing that the product can completely protect them from this crime. Some products have merit but it is definitely a "due diligence" environment.

• The year 2007 reflected continual blame on consumers as a primary cause of identity theft. Various studies and articles failed to explain that consumers, governmental agencies, educational and medical facilities and businesses all need to handle sensitive personal information, especially Social Security numbers and financial account numbers, with the greatest care.

• On the positive side, there has been improved communication among businesses, consumers and law enforcement as to the causes and possible solutions to reduce identity theft crimes.

• There has been growing acknowledgement that identity theft is a multi-faceted crime and not just financial in nature. More cases of criminal identity theft, where the imposter uses the victim's identity when arrested or cited, are being reported. Criminals are using a victim's Social Security number to work, collect welfare or unemployment, as well as get medical benefits and healthcare.

Predictions for 2008:

"Identity theft is like the never-ending story," said Linda Foley, ITRC Founder. "It acts like an oil spill that spreads in yet another direction with the ocean currents and wind despite best efforts to contain it."

• We only have to look at the papers to see that thieves are getting younger and younger. Recently, two people in their early 20's were arrested, in possession of sophisticated forgery equipment. This is a strong indicator that identity theft is becoming a lucrative career path.

• Identity theft will continue to grow more international in scope. Scams will become more sophisticated and will be harder to detect, as thieves become more industrious and skilled at designing viruses, Trojans and ways to trick you into divulging personal identifying information.

• There will be an increase in the number of data breaches due to poor information handling policies and practices.

• There will be a continuation of contradictory studies with less agreement on victim census, cause and effect, facts and overall cost of identity theft. This will lead to confusion, misguided legislation and governmental actions.

• On the positive side, ITRC believes that businesses will develop and implement better ways to authenticate the identity of applicants including Internet and telephone applications.

• There will be a higher recognition of identity theft as a crime by law enforcement. This will lead to more reports written to assist victims in taking advantage of state and federal victim recovery rights.

• There will more legislative action on the issue of identity theft, including limiting the use of Social Security numbers. • States and non-profits will be in a better position to provide more victim assistance at no charge.

"The Identity Theft Resource Center, when making some negative predictions for 2008, truly hopes that we will be wrong. We will work collaboratively with others toward making the positive predictions come true. The ITRC will be watching closely as the year 2008 unfolds," remarked Executive Director Jay Foley.