Identity Theft Fastest-Growing White-Collar Crime
By: Source: AARP.org Date Posted: 2007-08-13 13:23:49.095539-04:00
In April 2001, a thief used Alpharetta businessman Timothy Patrick's identification to obtain a credit card in his name and run up $1,600 in purchases on it.
Patrick, a hard-working family man who has been married for 25 years and has three sons, followed the advice of consumer experts: he immediately alerted the financial institution that held the credit card line about the fraud; he filed a police report; he requested all three reporting agencies flag his accounts with fraud alerts; and he contacted the Social Security Administration.
Patrick managed to get the three credit reporting agencies to flag his accounts with a request that no credit be extended unless he personally verified by phone purchases and applicant information.
Regardless, Patrick's quick response failed to end his problems.
Before finally being arrested in July 2001, and despite the fraud alerts attached to Patrick's credit reports, the same thief continued using Patrick's identification to take out two mortgages, buy a car, run up $1,500 in phone bills and make thousands of dollars worth of credit card purchases.
Despite using all measures available to consumers under current law, Patrick could not head off his thief until after 46 fraudulent credit applications had been logged.
"It's a disturbing feeling knowing someone is doing this to you," Patrick said. "How could the credit agencies and mortgage companies be so sloppy?"
Moreover, getting credit agencies to remove false and damaging information from Patrick's credit reports took two more years.
Disputing fraudulent charges in his name was time consuming and expensive. Various creditors demanded Patrick provide over and over again copies of his driver's license, utility bills, notarized statements and other documents proving his residents and personal information.
When first contacted by Patrick, lenders did not believe his story of identity theft.
"I was treated like someone just trying to get out of paying his bills," Patrick said.
Patrick estimated his so-called "restoration time" to regain his good credit at over 100 hours, even though as CEO of a small company he enlisted the help of an administrative assistant.
Timothy Patrick is hardly alone in the ordeal he faced from identity theft, and his story should serve as a wake-up call to all Georgians that the current system is broken when it comes to guarding consumers against identity theft.
No one is immune from identity theft, and under the current system removing false information from credit reports proves tedious and difficult, even for sophisticated businessmen with above-average resources.
The Federal Trade Commission has estimated that identity theft affects 10 million Americans per year and costs businesses more than $50 billion.
Thieves most often obtain personal information by stealing wallets, checkbooks, credit cards or pieces of mail, according to a 2005 survey conducted by the Better Business Bureau, VISA, Wells Fargo and CheckFree Corp.
Consequently, one of the most powerful tools against identity theft is a paper document shredder.
Some states such as Minnesota and Illinois with the backing of AARP have passed laws allowing consumers to place a security freeze on their credit reports.
A security freeze prevents anyone from opening new credit and other accounts in a consumer's name by preventing access to the credit report, which potential creditors must review prior to issuing credit.
"I wasn't out buying new cars or anything," Patrick noted. "If I had the ability to freeze my own credit, none of this would have happened [to me]."
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