Why all the fuss about identity theft?

[VenezianBlau 87]

Maybe a naive rant, but this is something I've wondered about for awhile...

So I read this morning that LexisNexis allowed the theft of personal information on 310,000 U.S. citizens; opening another door to identity thefts. When I hear of identity theft, I question why the individual must take any action at all. The victims, or entities suffering losses, are those who sloppily disburse money to those with fake identities.

These tips from Clark Howard's consumer website:

If you're a victim of identity theft, get a police report from your local police department, ask each of the three credit bureaus to place a fraud alert on your credit report, and fill out affidavits of fraud with each company that issued credit in your name. Keep these documents forever.

The fraud alert and review of the three credit bureaus make sense. I do the review once a year after a mistaken Discover card appeared on my Experian report. My experience is that when I challenge an account and the lender cant show a proof of claim, the account is removed. End of story.

However, Howard recommends in his radio show to carry the police report around with you always in the event you're arrested. For check fraud, IIRC. That's a little much.

"Victim" implies loss or harm. You are only responsible for debts you legally contracted, not those made illegally in your name.

My question is, why is the burden of proof on the individual, and not the lenders?

[osidak]

I actually know some one that was arrested for check fraud even though they never once wrote a bad check.

Some one had been doing it in his name and had gotten a hold of his social. Once they actually started to dig they figured it out, just took a little time and of course the embarassment of getting collared

[cool_chick]

One of my friends lived through this. The thief had never been caught. He would spend hours and hours on end trying to get it straightened out. The thief would disappear, only to come back after a year or two. This was an ongoing ordeal and was very painful for him, ruined his credit, put him in debt. etc. These lenders tend to not believe people like my friend. TransUnion, etc....it's very very hard to get these things removed. It's very, very, very hard to clean this up. And this poor guy would have to do it over and over and over with new lenders over the years.

(Haven't talked to him in a while, I wonder if that thief has ever been caught...???)

Some here (I've noticed) just don't appreciate the seriousness of this issue and how devastating it is to one's credit, life, etc.

[StevoRocket]

If they have your identity in the UK they get a driving license, passport, bank account etc etc. Great for criminals and illegal immigrants as well as credit fraud.

A trick in London and other large cities is to use your car registration number so you get the speeding fines and London access fines instead of them. Back street dealers still provide number plates with no questions asked.

[cool_chick]

Originally posted by StevoRocket
If they have your identity in the UK they get a driving license, passport, bank account etc etc. Great for criminals and illegal immigrants as well as credit fraud.

A trick in London and other large cities is to use your car registration number so you get the speeding fines and London access fines instead of them.

Actually the same happens here too. And not just speeding fines, criminal charges too....

[VenezianBlau 87]

Originally posted by cool_chick
...(edited) This was an ongoing ordeal and was very painful for him, ruined his credit, put him in debt.

The stories I've heard on Clark Howard's show all sound like this nightmare. But, why would it put anyone in debt? It's not their debt.

As far as being arrested for passing bad checks, it sounds very 19th century. OK, so you got me. They're not my checks. Prove it. The burden of proof is not mine. Produce a pic of my ugly mug passing one of these checks.

The problem I see is trying to refinance a mortgage. But, if the debt is not mine, it will be removed prior to application. The true victim becomes the sloppy lender.

When I last refinanced, the loan officer said "don't worry about this (errant) Discover Card on one report, you qualify even with it." There's something odd about that statement.

edit: I didn't check my three reports prior to refinancing or the above wouldn't have happened.

[rcecale]

Here's a thought...

How about a Death Penalty for Identity Theft?

Before you start thinking I'm being sarcastic, think about it for a minute. Think of the damage caused to the individual whose identity is stolen. As mentioned above, it can take several years to recover from something like this, and often times the recovery never happens.

I'm all for letting the punishment fit the crime. So, if you steal someone's life like this, then shouldn't your be forfeit as well?

*Note* Okay, perhaps the Death Penalty is a bit harsh, how about Life In Prison, with no chance for parole?

Randy

[widebody911]

Originally posted by VenezianBlau 87
My question is, why is the burden of proof on the individual, and not the lenders? [/B]

Because the lenders make the rules

[mikester]

Originally posted by widebody911
Because the lenders make the rules

And that's exactly the truth; The lenders make the rules - there is no law protecting your fico score specifically really. Fraud is illegal but see here is the thing - the criminal is innocent until proven guilty but the person who truely owns the identity is exactly the opposite. Guilty by default until proven innocent. When dealing with the individual card companies you'll likely have little trouble establishing fraud but it's the credit reporting agencies and the hassle there after. Have you ever actually tried to get something removed from your credit report? It isn't easy - even if it is wrong it still isn't easy. Now - of course that isn't right at all - I'm not a huge proponent of regulation but in this case I don't think the people are being protected. There does need to be an identity specific law dealing with removing fraudulent or even incorrect nformation from your credit report. I think that the court system would be a great way to deal with this and the end result would be a court order from a judge to these credit reporting agencies saying that the info is wrong and needs to be removed. But that's just an idea of mine...

I spend a lot of time trying to prevent thieves from getting protected information (I'm a network security engineer) and I would say that it is time well spent.

ID Theives have no scruples; they will go after your kid's identity regardless of age or yours. Whichever is easier to get.

Consumers share some blame in this too -we want things to be easy to access like bank accounts and retirement accounts and what not. If you call and have forgotten your password or account number they will confirm you with your ADDRESS or SSN alone! but if they didn't they could loose you as a customer because they are "hard to deal with" even if they are just trying to protect your information. It always makes me mad when the incorrect information is in there and they hint that when they are trying to confirm my address and they have a previous address on file they will "hint" at the old address.

Lame.

[osidak]

I was rear ended by a drunk driver with no insurance. Had three witnesses to the accident. Got his tag number and gave them a description of the guy and his passenger.

The cop even gave me his address after the fact. Why didn't they go arrest him? Why did I have to pay for the damage using my insurance?
Driving drunk is against the law, hit and run is against the law.... Wasn't worth the police departments time (don't get me started about the local PD) The lawyer I spoke to said it wouldn't be worth my time to pursue it as a civil mater as he lived out of state (just over the boarder) and he would just keep continuing the case.

Had a Discover card stolen. Ran up $3,000 of false paypal charges with an account they set up using a fake Juno email account. Caught them when they bought a Laptop that got delivered to my house via FedEx next day air. FedEx just dropped it at the door so I presume it was some one local hoping they could snatch it off the porch before I got home. Too bad my wife was at home with FedEx did the ring and run delivery method.

Called paypal and advised them the charges where fraudulent. Asked for account details and all they would give me was the email the account was setup with (never had a juno account) called Juno and they would not give me any information.

Called the company that shipped the computer. They gave me the time the order was placed online but would not tell me anything else.

Called the police and reported the crime. They came out and took a report. I gave them all the info I had. They used my Discover to purchase ~$5,100 worth of stuff. The police advised me that they would follow up with me on what happened. Last I have heard from them was 8 months ago. I have called and left numerous messages for the detective on the case.

Why don't they just arrest the person that did all this. They have enough info to put some heat on the individual.

Things are not black and white. I personally resent having to spend time correcting issues that I did not cause. While I maybe able to restore my credit if someone went full blown id theft on me why should I have too.

That is the big deal.

I ask you to record your personal info in a non secure manner and let some one that is smart enough to find it have fun with your credit. Report back to us in 2 years.

[widebody911]

Another chunk of the blame goes to the 'information industry' - companies are hungry for every last scrap of data, but really never gave a rat's ass about the security of it. A large part of this is simply ignorance - the made the (incorrect) assumption that nobody could ever get to their stuff, much in the same way home users seem to be totally and completely oblivious to the fact that once they hook up DSL/cable on their PC, they're exposed. Efforts to

Yet another chunk of blame goes to the merchants. Frequently they do little verification when accepting credit cards or opening store accounts. They're either minimum wage grunts who don't care, or greedy salespeople who don't want to jeapardize a sale.

Then there's the consumers themselves, who in general are clueless until it's too late. Studies have shown they'll gladly give out tons of personal information in exchange for trinkets of marginal value.

And you can't forget the lazy architects of this whole system, who based everything on your social security number, and then printing it on everything. Any WTF do agencies use the SSN as some sort of 'password'? It's easy to find a bill or statement that has someone's SSN, address and and everything else on it.

[lendaddy]

That sucks, but it is still an enforcement issue. I mean what would more laws change?

[rcecale]

Yup, I agree with ya, Len. We don't need MORE laws. We need to have stricter enforcement of the CURRENT laws. Harsher penalties.

Collecting data, storing data, selling data, they all suck, but they are all legal. Wrongful use of someone else's data to commit a fraud is ILLEGAL! THESE are the people actually committing the crime. THESE are the people who should be targeted. These are the people who should be made to pay.

Make the penalty more severe, and I mean EXTREMELY more severe, and you'll have the beginning of the end of Identity Theft.

[widebody911]

Originally posted by lendaddy
That sucks, but it is still an enforcement issue. I mean what would more laws change?

I don't think the penalties for ID theft are harsh enough yet, and most PD's don't take it seriously yet. To investigate one of these cases takes quite a bit of time, and it probably isn't worth it to go through all that effort for something that the cop views as just one step above jaywalking.

[lendaddy]

Good points, I have no idea what the penalty is for this. I assumed it was already VERY high, but it sounds like I'm wrong. It is a Federal offense though right? In that case his local PD doesn't matter, call the FBI!

[Superman]

You guys have opened a can of worms. There's the principle you all know I hate, and that is this notion that it's all about business and not about people. The lenders, to substantial degree, make the rules. Credit reporting agencies are some of the absolute most frustrating organizations in the world to deal with. By contrast, they make licensing and welfare agencies look like Nordstrom. The last two are public agenies (gubmint), while credit reporting agencies are profiteers.

Then there's Randy's excellent suggestion......except that prisons are already full and he's suggesting increasing taxpayers' expense. And with Len and the enforcement issue. It's be cute if passing new laws was a solution. The cops lack the staff to enforce the laws we've already got.

Perhaps the only solution is for each of us to wear a chip under our skin, like it says in the Bible. Mark of the something-or-other.

[widebody911]

Originally posted by rcecale
Make the penalty more severe, and I mean EXTREMELY more severe, and you'll have the beginning of the end of Identity Theft.

Like drunk driving; 10 years from now, we'll be passing around tales about someone getting arrested for having someone's credit report in the trunk of their car.

We need more penalties for the perpetrators, but we also need to share some of the risk with the data aggregators, which will probably require a shift in their business model. The most recent publicised 'theft' of data wasn't even really a theft - the 'thieves' bought the data, posing as a legit customer.

[lendaddy]

Hey, I say get all non violents out of prison. Work with the private sector to setup work camps for non violents, that alone would free up tons of room.

Anyway, we already incarcerate a larger portion of our population than any other country, so I don't feel "more money for more prisons" is the answer. Turn it into a positive cash model in the private sector Heck I have a kid on work release working for me now. Give me a team of these guys to house and pay next to nothing Only sorta kidding.

[VenezianBlau 87]

editedOriginally posted by osidak
Things are not black and white. I personally resent having to spend time correcting issues that I did not cause. While I maybe able to restore my credit if someone went full blown id theft on me why should I have too.

That is the big deal.

I ask you to record your personal info in a non secure manner and let some one that is smart enough to find it have fun with your credit. Report back to us in 2 years.

I'm not doubting the troubles illustrated in your two scenarios; I've experienced both. In my case, the hit and run driver was known by the police, yet my uninsured driver coverage paid. I had no (standing, harm, whatever the lawyers call it) to sue, since I was "made whole" by insurance. It was then their call.

Regarding credit cards, Federal Reserve Reg Z gives credit card holders great protection in disputing charges. Institutions tout this as if it were their benevolent decision, but it's required by law. If it weren't for this and other Fed regulations the contracts would be a free for all. As it stands now, lending terms are spelled out; although it takes work to find some items. Lenders use fairly standardized forms, especially in non-commercial real estate.

I had a $700 erroneous charge on a card a few years back. The issuing bank wanted me to file an affidavit and a police report. I asked them where in the contract this was required. I reminded them that they advanced money in the form of credit without verifiying identity. I faxed them a statement and that's it. There's this prevailing belief that anything with our name on it is our responsiblity. So, if I throw a brick through someone's window with your name on it, it's your responsibilty. It's not your responsibilty to ensure that everyone else is made whole just because your name is involved.

The U.S. Government will step in on identity theft. The private sector (financial inst. and credit bureaus) wont do it unless their costs become significant.

[on-ramp]

I wouldn't be surprised if the same lenders indirectly encouraged identity theft. It's a moneymaker for them. Just look at all the fees they generate.