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C H A P T E R 4 o WILL THE REAL JOHN DOE PLEASE STAND UP? A WARNING ABOUT IDENTITY THEFT Failures in the U.S. system of identification have caused identity theft to rise to the top of the list of the fastest growing crimes in America. Many people are familiar with the horror stories or have known a victim of identity theft. Take this example described at the U.S. Department of Justice’s Web site on identity theft: [T]he criminal, a convicted felon, not only incurred more than $100,000 of credit card debt, obtained a federal home loan, and bought homes, motorcycles, and handguns in the victim’s name, but called his victim to taunt him—saying that he could continue to pose as the victim for as long as he wanted because identity theft was not a federal crime at that time—before filing for bankruptcy, also in the victim’s name. While the victim and his wife spent more than four years and more than $15,000 of their own money to restore their credit and reputation, the criminal served a brief sentence for making a false statement to procure a firearm, but made no restitution to his victim for any of the harm he had caused. Although cases like these motivated the federal government to pass the Identity Theft and Assumption Deterrence Act in 1998 in an attempt to crack PAGE 39 39 .......................... 10897$ $CH4 08-31-04 10:09:07 PS 40 Chapter 4 • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • down on identity theft and make it a federal felony, the overall rate of identity theft has continued to skyrocket. In the United States, identity theft has been described as ‘‘the fastest growing crime in the nation’’ and ‘‘the leading form of consumer fraud.’’1 According to the FTC, identity theft accounted for 43 percent of all consumer complaints in 2002, and individual losses grew from $160 million in 2001 to $343 million in 2002.2 Over the last five years, a startling twenty-seven million Americans have fallen victim to identity thieves.3 An increasing number of Americans have been impacted by identity theft and are altering their behavior as a result. Recent surveys have found that nearly one third of consumers who have bought products on the Internet have experienced fraud or misuse of credit card information .4 A National Consumers Union/Dell survey asked, ‘‘Why haven’t you bought anything online in the last 12 months,’’ and found that 57 percent of respondents were concerned about credit card theft.5 Identity theft is a particularly frightening crime because it does not discriminate in the choice of victims. There is no completely effective way for most people to protect themselves. One of my colleagues expressed the hopelessness of the situation by claiming that his only protection was probability. In a lottery of millions of potential victims, he figures the odds are in his favor that he won’t be one of the many Americans winning the identity theft ticket. Even the rich and famous can be caught in the identity theft trap. In fact, because they have more wealth, they may be more likely to be targeted . One story that made headlines showed just how vulnerable society ’s elite could be to identity theft. A busboy in New York, Abraham Abdallah, employed the Internet and a copy of Forbes magazine on ‘‘The 400 Richest People in America’’ to obtain SSNs, home addresses, and birth dates of 217 rich and famous individuals, including Steven Spielberg , Warren Buffett, Martha Stewart, Oprah Winfrey, Ross Perot, and Ted Turner. He used the information to gain access to credit card accounts in an attempt to steal millions of dollars. Authorities tracked him down when a $10 million transfer from a Merrill Lynch account belonging to Thomas Siebel, founder of Siebel Systems, was flagged as suspicious. According to the Privacy Rights Clearinghouse, which has a Web site devoted to identity theft, the impact on victims can be traumatic. One study found that it took a person fourteen months on average to discover that he or she had been a victim of identity fraud. In many cases, law enforcement is unable to provide much assistance due to the sheer volume of identity fraud cases. PAGE 40 .......................... 10897$ $CH4 08-31-04 10:09:08 PS Will the Real John Doe Please Stand Up? 41 • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • Once victimized, an individual can flag his or her credit reports for fraud, although this may not...


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