Identity Theft:

Fastest Growing Crime in America

 

Detective Key Budge, Los Angeles County Sheriff’s Department

(Reprinted with permission of the author)  

 

Identity theft is the act where a person (suspect) willfully obtains the personal information of another person (victim) without authorization from the victim, and uses that information for any unlawful purpose.

 

Roughly one in five Americans has already fallen victim to identity theft. Sadly, many don’t know they are victims. If you can imagine, 20% of the population has had their personal information used by crooks to obtain goods and services and stuck them with the bill. The financial institutions endure the bulk of the loss. There is an average of 3,000 new victims each day. Identity theft is the Federal Trade Commission’s top reported fraud complaint. In 2003, the number of victims increased to 10 million and $53 billion in total losses.

 

How is the victim’s personal information compromised? Crooks are using a wide variety of means to collect our personal information. Mail theft tends to be the most popular. “Dumpster diving,” or rummaging through trash cans, is a close second. Other popular means to obtain your personal information include car theft, residential and business burglaries, phone solicitors and e-mail scams. Employees copying business records or stealing information from the work place is another fast growing method of collecting personal information.

 

If you think for a minute, how many times have you left your briefcase, purse, wallet or laptop in your vehicle when you go shopping or parked in your driveway? The hard core drug user will turn to the street to steal. It’s the easiest and most profitable way to obtain the information he can turn and trade for drugs.

 

What is the most common link between the crooks who steal our personal information and the crooks that use our personal information to obtain goods and defraud the financial institutions? It’s simple, illegal substances (drugs). Methamphetamine is the drug that drives the majority of identity thieves in the Western United States.

 

We are seeing "tweekers" (methamphetamine users) organize and work together. The people at the street level are stealing the information. Our personal information (name, date of birth, social security number, credit cards and drivers license) could bring in $100 to $250 in drugs. The "tweeker" is happy because he can get high. The dealer is happy because he can now use the stolen personal identity to trade for additional drugs and also distribute to an “identity broker.”

 

The “identity broker” is a person who has a working knowledge of computers, possibly accounting and even banking procedures. This person applies for credit cards, opens accounts for utility services and cellular phones. Also, it is common for this person to create new checking accounts utilizing a victim’s personal and account information. They may even change the routing number and print their own fraudulent checks.

 

Do these checks clear? They shouldn’t, but the crook knows what retail stores or companies will accept checks with minimal identification. The outcome: the crook gets the product he wants and the retailer is stuck with the loss. Law enforcement then gets a case that is very difficult to solve.

 

The thieves involved in these types of crimes know which retailers check ID, and which utilize video surveillance systems. The word passes quickly as to what retailer or bank is quick to respond to the new crime trends.

 

With new, stiffer penalties like “3 Strikes” in California, the crooks understand that if they commit a violent crime they could spend 25 years to life in prison for an armed robbery that may yield $5,000 to $10,000. Identity theft could yield $25,000 per month without having to expose themselves to more than 18 months in prison. They can do that math and realize that identity theft pays.

 

The penalties are a slap on the wrist at best. These suspects don’t go to prison until the financial losses are astronomical or the victim list hits the 20 plus mark. The typical first-time-fraud arrest would probably be met with a few days to a month in jail and informal probation for one to three years. A second conviction might get a year in the county jail or possibly a minimal prison term.

 

What can you do to safeguard your identity and the identities of your cardholders? I recommend checking your credit a minimum of twice per year with the credit bureaus. Subscribing to a credit alert service is helpful. Shred all documents before they are disposed. Don’t leave mail overnight in the mailbox, and outgoing mail should be deposited at the post office. Don’t leave personal information or electronic devices unattended in your vehicles. Don’t provide personal information over the phone or computer unless you are totally comfortable with the company you are dealing with.

 

As a member of a financial institution, check with your local law enforcement agency to see if they have a fraud investigators’ association that you or your institution can participate in. The sharing of information is still the most effective way to combat this increasing problem.

 

I have been traveling across the United States for the past two years, speaking to groups on this subject and have yet to find a group where we didn’t find one in five that already has been a victim of an identity theft-related crime. Could you or one of your account holder’s be the next one in five? If you have a question regarding identity theft, feel free to contact me at klbudge@lasd.org.