Identity Theft: Experience of Older Complainants

Introduction

Identity theft occurs when an individual's personal identifying information (for example, name, Social Security number, date of birth, or mother's maiden name) is stolen by another person and used to commit fraud or engage in other unlawful activities. Often, this stolen information is used to establish credit, run up debt, or take over existing financial accounts. As a result, identity theft is referred to as an enabling crime since it permits criminals to commit other crimes, such as credit card or bank fraud.

Typically, identity theft damages the victim's credit, making it difficult for the victim to buy a home or car, rent an apartment, obtain employment, or purchase insurance. Victims often spend substantial amounts of time and money resolving problems created by identity theft. Common problems include the victim's having to contact credit bureaus repeatedly in an attempt to clear his or her credit reports of fraudulent accounts, being turned down for credit based on the incorrect information contained in the victim's credit report, and receiving calls from creditors seeking to collect on the fraudulent accounts. In addition, victims often suffer a psychological impact as a result of the crime.

The Identity Theft and Assumption Deterrence Act of 1998 made the actual theft of an individual's identifying information a specific federal crime. The Act also created the Identity Theft Data Clearinghouse database, which is run by the Federal Trade Commission (FTC), and provides for victim assistance and consumer education. In addition, 44 states have passed laws similar to the Identity Theft and Assumption Deterrence Act.

The U.S. Department of Justice considers identity theft to be one of the nation's fastest-growing crimes. While prevalence data have been difficult to obtain, a recent report by the U.S. General Accounting Office (GAO) suggests that identity theft crimes seem to be increasing, based on data from the FTC Clearinghouse database, the Social Security Administration, federal law enforcement agencies, and credit bureaus. Identity theft was the leading consumer fraud complaint received by the FTC in 2001, representing 42 percent of consumer fraud complaints, while the next most common complaint (Internet auctions) accounted for only 10 percent of consumer fraud complaints.

The FTC's Identity Theft Data Clearinghouse database has been in existence since 1999. Since inception of the database, the FTC has reported major increases in the number of telephone calls from consumers to its Clearinghouse hotline. Calls from consumers have increased from an average of 445 calls per week in the first month the hotline was in operation (November 1999), to an average of 3,000 calls per week in December 2001. In addition to the toll-free hotline, consumers can file a complaint online or by mail.

Methodology

This data digest presents the results of special tabulations by the FTC for the AARP Public Policy Institute of 2001 complaint data gathered through the Identity Theft Data Clearinghouse. The complaint data are based on self-reporting by the complainant either to the FTC or to another agency that subsequently forwarded the complaint to the FTC. The 2001 data report on 86,168 identity theft complainants, with 72 percent of these (61,956 complainants) reporting age information. The complaint data are used to create two groups: all complainants (86,168 complainants) and complainants 50 years of age and older (13,696 complainants).

Findings

Age Distribution of Complainants
More than three-quarters (78%) of complainants who reported their age were less than 50 years old, while 22 percent of complainants were 50 years of age or older (Figure 1).

Types of Identity Theft Fraud

The FTC groups identity theft crimes into a number of different fraud types. Table 1 lists the general fraud types identified by the FTC and the total number of complaints received from all complainants in 2001.

Credit Card Fraud
All Complainants
Forty-two percent of all complainants reported having their stolen information used to commit credit card fraud. Of complainants reporting this type of fraud, 62 percent reported that their information was used to establish new credit, while 24 percent reported their information was used to access existing credit accounts (Figure 2).

Complainants Age 50 and Older
Half of complainants (51%) age 50 and older reported having their stolen information used to commit credit card fraud. Of complainants reporting this type of fraud, two-thirds (66%) reported their information had been used to establish new credit, while one-third (33%) reported their information was used to access existing credit accounts (Figure 2).

Telephone and Utilities Fraud
All Complainants
Twenty percent of all complainants reported having their stolen information used to commit telephone and utilities fraud. Nearly half (48%) of complainants experiencing this type of fraud reported their information had been used to establish new wireless telephone service.

Complainants Age 50 and Older
Seventeen percent of complainants age 50 and older reported having their stolen information used to commit telephone and utilities fraud. Almost two-thirds (64%) of complainants experiencing this type of fraud reported their information had been used to establish new wireless telephone service.

Bank Fraud

All Complainants
Thirteen percent of all complainants reported having their stolen information used to commit bank fraud. Nearly half (47%) of complainants experiencing this type of fraud reported their information had been used to commit check fraud.

Complainants Age 50 and Older
Eleven percent of complainants age 50 and older reported having their stolen information used to commit bank fraud. Sixty-three percent of complainants experiencing this type of fraud reported their information had been used to commit check fraud.

Loan Fraud
All Complainants
Six percent of all complainants reported having their stolen information used to commit loan fraud. Half (53%) of complainants experiencing this type of fraud reported their information had been used to secure a personal or business loan.

Complainants Age 50 and Older
Seven percent of complainants age 50 and older reported having their stolen information used to commit loan fraud. Of complainants experiencing loan fraud, 56 percent reported their information had been used to secure a personal or business loan.

Attempted Identity Theft Fraud
All Complainants
Ten percent of all complainants reported their personal information had been stolen and used in an attempt to commit fraud. While the complainant's identifying information was stolen successfully, the thief was unsuccessful in his or her attempts to use the information to commit fraud (Figure 3).

Complainants Age 50 and Older
Eighteen percent of complainants age 50 and older reported attempted identity theft fraud. Persons in this age group reported this crime at almost twice the rate of the all-complainants group (Figure 3).

Identity Theft in the States
Based on 2001 FTC complaint data and 2000 Census data, per capita rates of identity theft can be calculated for complainants age 50 and older by state (and the District of Columbia). Figure 4 illustrates the per capita rates of identity theft for the 50-plus population of each state.

Table 2 lists the states with the highest per capita rates of identity theft for complainants who are age 50 and older.

Summary

Analysis of 2001 FTC complaint data indicates that complainants age 50 and older were more likely to report a number of different identity theft crimes than the all-complainants group. These crimes include:

• Fraudulently using a complainant ' s existing credit card account
• Fraudulently establishing a new credit card account in the complainant ' s name
• Fraudulently opening a wireless account in the complainant ' s name
• Fraudulently using a complainant ' s information to commit check fraud
• Fraudulently taking out a personal or business loan in the complainant ' s name
• Stealing a complainant ' s identifying information and using it in unsuccessful attempts to commit fraud

The number of identity theft crimes appears to be rapidly growing. Further collection and analysis of complaint data are necessary to better understand the nature of identity theft crimes and to devise effective prevention and enforcement policies.

Footnotes

1. U.S. General Accounting Office (GAO). Identity Theft: Prevalence and Cost Appear to be Growing (March 2002).
2. Testimony of James G. Huse, Jr. (Inspector General of the Social Security Administration), before the U.S. Senate Special Committee on Aging (July 18, 2002).
3. U.S. General Accounting Office (GAO) (March 2002), op. cit.
4. This database is available to local, state, and federal law enforcement agencies through an encrypted web site.
5. U.S. General Accounting Office (GAO). Identity Theft: Greater Awareness and Use of Existing Data Are Needed (June 2002).
6. Statement of John Ashcroft (Attorney General, U.S. Department of Justice) at Identity Theft Press Conference (May 2, 2002).
7. Identity theft as a crime is not specifically recorded as an offense category by the FBI's Uniform Crime Reporting Program. This program involves city, county, and state law enforcement agencies voluntarily reporting crime data from their jurisdiction.
8. U.S. General Accounting Office (GAO) (March 2002), op. cit.
9. Federal Trade Commission (FTC) press release. Identity Theft Heads the FTC's Top 10 Consumer Fraud Complaints of 2001 (January 23, 2002). The FTC received 204,000 consumer fraud complaints in 2001.
10. U.S. General Accounting Office (GAO) (March 2002), op cit.
11. Access to Clearinghouse data is restricted to FTC staff and law enforcement agencies. The FTC report is entitled, "Identity Theft Victim Complaint Data: Figures and Trends on Identity Theft for AARP January 1—December 31, 2001."
12. For example, the Social Security Administration forwarded 15,611 complaints to the FTC Clearinghouse in 2001.
13. Per capita rates are calculated per 100,000 persons 50 years of age or older in each state (and the District of Columbia) based on 2000 U.S. Census population estimates.

Written by Neal Walters and Ann McLarty Jackson, AARP Public Policy Institute
March 2003
©2003 AARP
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