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Task Force Takes A Look At Identity Theft

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In the spring of 2006, with reports of computer hacks, lost laptops, and other precursors to identity theft increasing, President Bush appointed an Identity Theft Task Force to investigate the problem and suggest solutions.

The group was composed of many of the President's cabinet including the secretaries of the Treasury, Commerce, Health and Human Services, Homeland Security, and Veterans' Affairs as well as heads of a number of government and quasi-government agencies such as The Federal Deposit Insurance Corporation, the Federal Reserve System, the Securities and Exchange Commission, Office of Thrift Supervision, the Postal Service, and other banking regulators. The Task Force was chaired by Attorney General Alberto Gonzales and Deborah Platt Majoras, Chairman of the Federal Trade Commission.


The Task Force released their findings last Monday.

The report acknowledges that millions of Americans are victims of identity theft and "the financial and emotional trauma it causes." Identity theft can take many forms but its victims are always left with the job of repairing the damage it causes on their own. "It is a problem with no single cause and no single solution." The report follows with what can only be seen as self congratulatory remarks about the work the government has done since Congress enacted the Identity Theft and Assumption Deterrence Act in the late 1990s. This includes the establishment of an Identity Theft Data Clearinghouse by the Federal Trade Commission and prosecution by the Department of Justice of a wide range of identity theft schemes.

The report, at the same time, recognizes that the problem of identity theft has become, during this same time frame, more complex and challenging for the general public, the government, and the private sector and that both public and private sectors have been confronted with difficult and costly decisions regarding resolution and with increasingly pressing demands on law enforcement.

The Task Force states that it solicited comments from consumer advocacy groups, law enforcement, business, and from the victims themselves and emerging from this research was, first of all, a profile of the "life expectancy" of identity theft.

First the thief attempts to acquire personal information about the victim. This can involve low-tech methods such as "dumpster diving" or complex frauds like malicious computer codes. The stolen information is not necessarily used for identity theft; during the past year some 73 million people have had personal information compromised and little appears to have been used for that purpose but, the report said it is still troubling with potential devastating results for the persons involved.

Second, the thief attempts to misuse the information. Thieves can sell the information they have acquired to others or use it themselves by accessing and misusing existing credit, brokerage, banking, or other financial accounts or by establishing new accounts that will allow them to take out loans or make charges and then disappear. The stolen information can also be used to establish accounts to receive benefits to which the thief is not entitled or to provide documentation for illegal immigrants.

The third part of the cycle occurs when the identity thief has completed his work and is enjoying the results while his victim is slowly awakening to the damage.

To avoid this cycle of damage the Task Force recommends a broad range of improvements.

To prevent identify theft consumer information should be kept out of the hands of criminals. To this end the Task Force recommends decreasing the use of Social Security numbers for identification in the public sector; educating federal agencies on how to protect data (an important step given the enormous amounts of such information that has been lost by the Veterans Administration and other agencies); and ensuring that those agencies respond effectively when data is lost.

In the private sector the report recommends that national standards be established for the use of Social Security numbers and to require both protection of data and appropriate and prompt notice to victims when protections are breached.

There should also be an on-going public awareness campaign to educate the public about identity theft.

Once data is compromised the Task Force says it is essential to reduce the opportunities for criminals to misuse the data, however they admit that authentication of applicants is currently liable to error and the report falls back on some rather weak recommendations that amount to developing better procedures.

Victims of identity theft are often cast adrift, spending years trying to prove that they did not charge the plasma TV or bounce checks all over Cleveland. The Task Force offers only broad suggestions to help in this situation. One is to train law enforcement and other first responders to provide assistance to victims; another is to assess the efficacy of tools currently available to victims. Two others that are interesting are amending criminal statutes that, where restitution is appropriate, would allow victims to recover the value of the time they spend trying to clear the problem and to study whether there should be a national system to provide victims with identification documents that would enable them to obtain credit despite the damage that has been done.

There were also a number of recommendations dealing with prosecuting and punishing identity thieves which included information sharing, cooperation with foreign law enforcement, changing monetary thresholds for prosecution, closing gaps in existing identity theft statutes, more training for law enforcement, and of course the ever popular establishment of a new agency and a few new forms.

Our cynicism aside, this is important stuff and we hope that the report doesn't land in somebody's bottom drawer. People are losing their homes, their credit, and their livelihood because of identity theft and it is only going to get worse if comprehensive and effective action is not taken.



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Comments (8)

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There is a service available that will monitor your credit (and update you whenever there is a credit pull, or other unusual activity) as well as correct ID theft with affected agencies and institutions including: All 3 credit repositories, FTC, Social Security Admin, Dept of Motor Vehicles, US Postal Service and Law Enforcement personnel. It's an awesome service for a minimal monthly fee.

Above Posted By: Jason | Fri, 4 May 2007 11:17:45 EST

It seems all states should follow CA's lead (let the Feds focus on securing personal information databases at Federal Agencies). Allow consumers to put a credit freeze on their accounts, thereby disallowing any unauthorized credit from being issued in their name. (Don't confuse this with Fraud Alert which is useless, as creditors simply ignore these and issue credit anyways).

Above Posted By: Omario | Thu, 3 May 2007 09:16:05 EST

I am glad that the government has put time and money into this committee. I am sure that all that participated were well paid to find out what a victim of ID theft suffers. They could have just asked one for free. Make companies tighten their security, stop sending information offshore. Do not allow banks to accept applications unless they follow CIP (which they bend the rules). Make site inspections mandatory rather than "if possible". Do not cross sell personal information just for profit.

Above Posted By: marcie | Tue, 1 May 2007 09:11:07 EST

Message to Carol: I too was a victim of ID theft last year. As for your situation and most others it was probably an inside job. Most of the people processing loan applications are under-paid idiots and they can make a few bucks by selling the info to an outsider. DMV is nortorious for this activity as well. What to do? Write the state department of Real Estate where you reside. Provide them with all the details from the time you started the transaction and who was involved. Good luck!

Above Posted By: Jules | Mon, 30 Apr 2007 13:57:49 EST

My God real estate is 50% overvalued, so they appoint a committee to study identity theft? hahhahhahahaha they sure have their priorities lined up.

Above Posted By: joe c | Mon, 30 Apr 2007 11:00:42 EST

The problem with companies offering ID theft protection is that they only offer credit monitoring, which is good but not enough. If someone else gets a ticket using your D.L. they won't go to that court date! What about your SS#? If someone is not legal and needs a job, they can buy your SS# for about $50. What happens to your medical insurance if someone has major surgery? More than monitoring, people need credit restoration!

Above Posted By: Kirsten | Mon, 30 Apr 2007 10:59:31 EST

I am a victim of identity theft specifically as it relates to the second phase listed in your recent article whereby my refinance underwriting files were compromised - resulting in several mortgage loans and a few credit cards being opened with my information but for other unknown persons. There were multiple loans opened with loan numbers which were in my underwriting file but were not funded to me. > $2 million - and then they just disappeared off my credit report. Any suggestions ?

Above Posted By: Carol | Mon, 30 Apr 2007 10:28:19 EST

I'm glad to see the US Government is finally doing something, or at least acting like they are. The only thing missing here was an indentity theft cost analysis. I would like to see what it is actually costing consumers.

Above Posted By: Anonymous | Mon, 30 Apr 2007 08:28:47 EST


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