Judiciary Committee hears identity theft testimony

The Federal Trade Commission said July 12 that it is continuing to expand its efforts to fight the growing tide of identity theft.

"The fear of identity theft has gripped the public as few consumer issues have," said Jodie Bernstein, director of the FTC's Bureau of Consumer Protection. Bernstein presented FTC testimony on identity theft before the Senate Judiciary Committee's Subcommittee on Technology, Terrorism and Government Information.

"Consumers fear the potential financial loss from someone's criminal use of their identity to obtain loans or open utility accounts. They also fear the long lasting impact on their lives that results from the denial of a mortgage, employment, credit or an apartment lease when credit reports are littered with the fraudulently incurred debts of an identity thief," Bernstein said in an FTC release.

Bernstein said the number of calls to the hotline has doubled since March, and the agency is now taking 800 to 850 calls a week. Phone counselors, who have handled more than 20,000 calls in the past eight months, "provide victims of identity theft with specific information about how to try to prevent additional harm to their finances and credit histories."

Phone counselors advise callers to contact the three consumer reporting agencies for copies of their credit reports and to request that fraud alerts be placed on their credit reports.

Counselors also explain consumers' rights under the Fair Credit Reporting Act to have errors corrected on their credit reports; Fair Credit Billing Act limitations on consumers' liability for charges they did not authorize; and the restrictions on debt-collection practices under the Fair Debt Collection Practices Act.

The FTC also has established the federal government's central repository of identity theft complaints, the Identity Theft Data Clearinghouse. Starting this month, the clearinghouse is available through a secure Web site to law enforcers across the country.

"The Identity Theft Data Clearinghouse ... provides specific investigative material for law enforcement and larger, trend-based information providing insight to both private and public sector partners on ways to reduce the incidence of identity theft," Bernstein said.

According to the FTC, complaint data show that the most common forms of identity theft reported during the first seven months of clearinghouse operation were:

Credit card fraud. About 54 percent of consumers reported credit card fraud, for example a credit card account being opened in their name or a takeover of their existing credit card account;

Communications services fraud. About 26 percent of consumers reported that identity thieves opened up telephone, cellular or other utility services in their names;

Bank fraud. About 16 percent of consumers reported that checking or saving accounts had been opened in their names, and/or that fraudulent checks had been written; and

Fraudulent loans. About 11 percent of consumers reported that the identity thief obtained loans, such as car loan, in their names.

The states with the largest populations California, New York, Florida, Texas and Illinois also have the largest numbers of complaints and suspects.

"The data also reveal information about the perpetrators. Almost 60 percent of the caller-complainants provided some identifying information about the identity thief, such as a name, address or phone number. More than one-quarter of those victims reported that they personally knew the suspect," Bernstein said. "We also are assessing the data on the monetary impact of this theft."

Estimates of the dollar amounts obtained by identity thieves, based on the resulting bills or on notification of the resulting bad debts, ranged widely. About 34 percent of complainants reported theft of less than $1,000; about 35 percent reported theft totaling $1,000 to $5,000, about 13 percent reported theft totaling $5,000 to $10,000, and about 18 percent reported theft of more than $10,000.

"The FTC's ID Theft Web Site, www.consumer.gov/idtheft gives tips on how consumers can guard against identity theft, warns consumers about the latest identity theft schemes and trends, and provides access to consumer education materials on identity theft," Bernstein said.

The FTC has established a consumer hotline, 877-ID-THEFT.