Identity Theft Woes Grow for Consumers

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By Aleksandrs Rozens

NEW YORK (Reuters) - When Michelle Brown, a corporate banker outside of Los Angeles, filled out paperwork for an apartment rental, little did she realize that financial details offered to a landlord would lead to identity theft that plagued five years of her life.

The theft of her identity took place in 1998.

Yet Brown did not notice that someone had used her name to apply for utility and cell-phone services until the thief purchased a Dodge truck -- a year after the actual theft.

It took six months -- about 500 hours -- to clear up the problem.

But the ramifications of a stolen identity and financial fraud still linger for Brown. Her wages were garnished last year related to an unpaid ticket for a traffic violation. The unpaid ticket was tied to a traffic violation committed by the woman who stole her identity.

"I'm more vigilant," Brown said, adding that she checks her credit four times a year.

She does not mind, as she puts it, being paranoid about the chance that someone might steal her identity again. Faced with the daunting task of clearing her credit after the fraud, Brown said victims are "guilty until we prove ourselves innocent."

Brown is not alone, according to regulators and credit specialists who gathered at a luncheon sponsored by credit card company American Express Co.. Identity theft targets a wide range of people and sometimes the thieves take the names of newborn babies, the elderly or even the dead. Thieves chip away at an identity by snaring bits of personal information like Social Security numbers and income, and bank and credit card account numbers. The information is used without a consumer's knowledge to commit fraud or identity theft.

Sometimes complete strangers commit these crimes. For instance, Brown did not know the thief who stole her identity. But neighbors and roommates also have turned criminal and stolen someone's identity or misused their personal information.

Barbara Anthony, director of the Federal Trade Commission's Northeast Region, estimated that identity theft has victimized about 27 million people and cost businesses about $48 billion in losses. She did not give a time frame for those numbers.

There has been a dramatic increase in reports of identity theft in recent years, she added.

'PHISHING' ON THE RISE

"Identity theft is a very high priority," said Wayne Abernathy, assistant secretary for financial institutions at the U.S. Department of the Treasury.

He said there have been more attempts recently to commit identity theft by using the Internet and sending bogus messages to tempt consumers to reveal personal financial information. The use of this technique, called "phishing," has jumped to the extent that the Treasury Department (news - web sites) hears about 400 to 500 such instances each month, Abernathy said.

According to an American Express survey, one in five consumers has received unsolicited e-mail from a bank or online shopping service requesting information.

"Unsolicited e-mail can be indicative of phishing -- requests for personal information either online or over the phone that appear to be valid, but aren't," the American Express survey said.

About half of these phishing messages come from offshore Internet users. This has led the Treasury Department to increase its scrutiny of identity theft over the Internet. The U.S. government is concerned that terror groups could use identity theft to commit fraud to finance their attacks.

"One suspects a connection" between attempts at identity theft by overseas Internet users and terrorism, Abernathy said. "It is a possibility."

Identity theft experts urge consumers to shred important documents and regularly check credit reports. They also said businesses should conduct extensive background checks of employees handling clients' personal information.

Susan Grant, vice president of public policy at the Council for Better Business Bureau, said new rules, which will go into effect in December, will require merchants to strike consumer credit-card details from paper receipts because lost receipts can be used for identity theft.

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