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Identity Theft : How It Happens, Impact on Victims, and Legislative Solutions

Identity Theft : How It Happens, Impact on Victims, and Legislative Solutions. Beth Givens Privacy Rights Clearinghouse 3rd Annual Privacy and Security Conference Nov. 7-8, 2002, Toronto, ON . Presentation Overview. 1. Identity theft description & statistics

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Identity Theft : How It Happens, Impact on Victims, and Legislative Solutions

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  1. Identity Theft:How It Happens, Impact on Victims,and Legislative Solutions • Beth Givens • Privacy Rights Clearinghouse • 3rd Annual Privacy and Security Conference • Nov. 7-8, 2002, Toronto, ON

  2. Presentation Overview 1. Identity theft description & statistics 2. How the thieves obtain personal information 3. Impacts on victims 3.a Video segment of two victims 4. Legislative and industry solutions 5. Tips for consumers 6. Resources

  3. I. What Is Identity Theft? • Using someone else’s personal information for fraudulent purposes • Account takeover • Application fraud • new credit cards, loans, utilities, apartment rental, cell phone, car purchase . . . • Criminal identity theft

  4. How Many Victims Are There? • 500,000+ victims estimated per year U.S. • 83,000 calls/mo. -- 50% from victims • Trans Union’s Fraud Dept., 500,000/yr. • 1 in 5 adults (Image Data survey, 1999)

  5. Victims in Canada • Fastest-growing white-collar crime • Increasing at about 55% per year • According to an Edmonton detective • CTV News, Sept. 29, 2001 • At least 12,000 victims per year • There are 5 million more SINs issued than the Canadian population • According to Oct. ‘02 Auditor General report

  6. Caseloads Are Increasing:Los Angeles County Sheriff Source: Joe Dulla, LASD , Oct. 24, 2002

  7. Why Is This Crime Is Rampant? • Easy credit • Inadequate application verification • Ease of obtaining ID information…SSN • Sloppy information security in workplace • Inadequate law enforcement resources • Penalties for convictions too weak

  8. 2. How Do Thieves Obtain Identification Information? • Wallet theft • Dumpster diving • Access to credit reporting data bases • Family, relatives, household workers ... • Access to H.R. files in workplace

  9. An “Inside Job” • “You’re protected against hackers, viruses and worms, but what about Rose in Benefits?” • Magazine Ad for Computer Associates, eTrust Security Solutions (2001)

  10. How Info Is Obtained, cont’d. • Mail theft • Change of address • Telephone and Internet “spoofing” • Internet • Most identity theft is opportunistic • Most victims do not know how the thief obtained their personal information

  11. 3. What Happens to Victims? • Little help from the authorities • Difficulty working with credit industry • Abusive collection agencies • Time-consuming

  12. What Happens, Cont’d • Emotionally scarred • Lost opportunities • Worst-case scenarios • criminal record • fraudulent work, unemployment, or welfare record • Must be savvy consumer

  13. Credit Bureaus’ Fraud Depts. • Phone # Canada U.S. • Equifax (800) 465-7166 (800) 525-6285 • Experian (N / A) (888) EXPERIAN • Trans Union (877) 525-3823(800) 680-7289 • Quebec (877) 713-3393

  14. Identity Theft in Canada • Recovering from identity theft in Canada is likely to be easier than in the U.S. . . because: • Fewer credit reporting agencies • Fewer credit issuers • Fewer provinces and territories, and thereby fewer government agencies to deal with.

  15. What’s Wrong With This Picture? • The identity thief is in jail!

  16. Video Segment • Victims tell their own stories (5 min.) • “Stolen Identity: The Crime of the Millennium” (1999) • Produced by Sun & Moon Productions, Selene Kassin, distributed by Aims-Multimedia.com

  17. 4. Legislative Solutions • Federal (U.S.) Identity Theft and Assumption Deterrence Act (18 USC 1028) • Federal crime when anyone knowingly transfers or uses, without lawful authority, a means of identification of another person with the intent to commit, or to aid or abet, any unlawful activity that constitutes a violation of federal law, or that constitutes a felony under any applicable State or local law.

  18. U.S. Federal Law, cont’d. • Took effect in 1999 • Federal felony • Establishes identity theft clearinghouse within Federal Trade Commission • Toll-free number: (877) IDTHEFT • Data base, to be shared w/ law enf. • Web site: www.consumer.gov/idtheft

  19. State Laws • Most of the states now criminalize ID theft • Listed on FTC website: • www.consumer.gov/idtheft • California • Incremental approach, several laws each year • www.leginfo.ca.gov

  20. California Statutes • Criminalizing identity theft • Misdemeanor / felony “wobbler” for use of personal information for unlawful purposes • Requires notation of court record if imposter is convicted in victim’s name • California Penal Code 530.5 (1997)

  21. Information trafficking • Penalties for trafficking in personal information • Every person who, with the intent to defraud, acquires, transfers, or retains possession of personal identifying information of another person, is guilty of a crime punishable by up to $1,000 and one year in county jail. • California Penal Code 530.5

  22. Police report - credit report • Correcting the credit report - with police report from victim • If victim submits police report to credit bureau listing the fraudulent accounts, the credit bureau must remove (block) them and inform the credit grantors that the information has been removed. • California Civil Code 1785.16(k)

  23. Jurisdiction of record • Establishing jurisdiction of record as victim’s own locale • Local police department must take a police report, even if crime is committed elsewhere • California Penal Code 530.6

  24. Access to documentation • Credit issuer must give documentation to victim and to law enforcement • Copies of applications, checks, account statements, etc. • California Penal Code 530.8

  25. Security “freeze” • Security alerts and security freezes • Beginning Jan. 2003, credit bureaus must enable consumers to establish “freeze,” prohibiting the credit bureau from giving report to anyone without consent • California Civil Code 1785.11.1 & .2

  26. Protection from debt collectors • Protection from debt collector harassment • No creditor can sell a consumer’s debt to a collection company once the individual has reported the fraud to the credit bureau • California Civil Code 1785.16.2 • Victim may seek injunction against debt collector who pursues payment • California Civil Code 1798.92-97

  27. Address-change checking • Address verification • Credit issuer must verify address if (1) an application of credit shows a different address than the one on the preapproved offer, and (2) when a request for a duplicate card comes within 10 days of request for change of address • California Civil Code 1747.06

  28. Credit card no. truncation • Truncation of credit card number on transaction slip • No more than the last 5 digits of a credit card number may be printed on electronic receipts, effective January 2004 • California Civil Code 1747.9

  29. The shredding law • Destruction of customer records -- the “shredding” law • Businesses are required to shred, erase, or otherwise destroy records containing personal information upon disposal • California Civil Code 1798.80-82

  30. The “hacker” notice law • Disclosure of computer security breaches • Requires business or government agency to notify individuals when personal information such as SSN and DOB has been accessed in a computer breach • California Civil Code 1798.29

  31. Restrictions on SSNs • Confidentiality of Social Security Numbers • Individuals & commercial entities may not: • publicly display or post SSNs • print SSNs on ID cards or badges • require people to transmit SSNs over the Internet unless encrypted

  32. SSNs, cont’d. • Confidentiality of SSNs, cont’d • Individuals & commercial entities may not: • require people to use the SSN to logon to the Internet without a password • print SSNs on mailed documents • Phased in from July 2002 - July 2005 • California Civil Code 1798.85

  33. Criminal identity theft • Dealing with criminal identity theft • Judicial process for clearing your name • California Penal Code 530.6(b) • Data base of criminal ID theft victims • California Attorney General -- (888) 880-0240 • California Penal Code 530.7 • See PRC Fact Sheet 17(g)

  34. Industry Responses • Uniform fraud affidavit • major credit issuers now accept it • coordinated by Federal Trade Commission • www.consumer.gov/idtheft • Automated profiling programs to detect fraud • phone call or letter from credit issuer to the victim -- early detection

  35. Industry Responses, cont’d. • Credit monitoring services -- $40-$80/yr. • PrivacyGuard.com • Intersections.com • Consumerinfo.com • Equifax.com

  36. Industry Responses, cont’d. • Identity theft insurance -- $40 - $140/yr. • PromiseMark.com • Identityfraud.com • TrueLink.com • Travelers Insurance, low-cost rider • Chubb Insurance, no cost

  37. Recommended Credit Industry Reforms • Criminalizing identity theft is not enough • See our report and survey results: “Nowhere to Turn: Victims of Identity Theft Speak Out” • CALPIRG & Privacy Rights Clearinghouse • at PRC web site: www.privacyrights.org/ar/idtheft2000.htm

  38. Credit Industry Reforms ... • Free credit report annually • Early detection • Only 6 states require free reports • Notice to consumer when credit report is accessed (Colorado)

  39. Credit Industry Reforms ... • Improve fraud flag process and penalize credit issuer when fraud alerts are ignored • Improve address-change confirmation • Credit application verification more rigorous

  40. Other Recommended Reforms • Restrict uses of SSNs & credit headers • Prohibit sale of SSNs on the Internet • Remove SSNs from public records posted on Internet • Improve Dept. of Motor Vehicles procedures • dup/replacement licenses flagging for fraud • Biometrics?

  41. 5. Tips to Prevent and Minimize Identity Theft • Check credit report at least once / year • Clean out your wallet • Don’t carry your SSN / SIN card • Shred household papers before disposing • Shred workplace papers and e-files • Protect outgoing and incoming mail

  42. Tips, cont’d. • Have new checks sent to the bank branch • Limit who obtains your SSN / SIN • Watch for monthly account statements • Don’t give out personal information on the phone unless you make the call

  43. 6. Resources • “Identity Theft: What to Do if It Happens to You,” Fact Sheet 17a • “Coping with Identity Theft,” FS 17 • “Nowhere to Hide” by PRC & CALPIRG • www.privacyrights.org/identity.htm

  44. Resources, cont’d. • Identity Theft Resource Center • Fact sheets for victims covering all phases of the crime recovery process • One-to-One victim assistance • Affiliated with the Privacy Rights Clrgh. • www.idtheftcenter.org

  45. Resources, cont’d. • “When Bad Things Happen to Your Good Name” by Federal Trade Commission • (877) IDTHEFT • www.consumer.gov/idtheft • FTC statistics at www.consumer.gov/sentinel • “Identity Theft Survival Kit” and “From Victim to Victor” by Mari Frank, Esq. • www.identitytheft.org

  46. Web Sites -- Identity Theft • PRC www.privacyrights.org • Identity Theft Resource Center www.idtheftcenter.org • FTC www.consumer.gov/idtheft • M. Frank www.identitytheft.org • CALPIRG & USPIRG www.pirg.org

  47. Reporting ID Theft in Canada • PHONEBUSTERS National Call Centre • Ontario Provincial Police Anti-Rackets • Toll Free: (888) 495-8501 • Toll Free Fax: (888) 654-9426 • Email: info@phonebusters.com • Web: www.phonebusters.com

  48. Resources for Canadians • Royal Canadian Mounted Police • Identity theft pages • www.rcmp-grc.gc.ca/scams/identity.htm • www.rcmp-grc.gc.ca/news/nr-01-09.htm • Privacy Commissioner of Canada • “Identity Theft: What It Is & What You Can Do” • www.privcom.gc.ca/fs-fi/02_05_d_10_e.asp

  49. Resources for Canadians ... • Ontario Information & Privacy Commission • “Identity Theft and Your Credit Report” • www.ipc.on.ca/english/pubpres/if-you/credit.htm • Ontario Ministry of Consumer & Bus. Svcs. • ID theft tips with emphasis on birth certificates • www.cbs.gov.on.ca/mcbs/english/55XMZ8.htm • www.cbs.gov.on.ca/mcbs/english/575RNJ.htm

  50. Resources for Canadians ... • Credit Reporting Agencies • Equifax Canada • Reporting fraud (800) 465-7166 • www.equifax.com/EFX_Canada/ • Trans Union Canada • Reporting fraud (877) 525-3823 • www.tuc.ca • Acknowledgements: Ontario OIP and Public Interest Advocacy Centre

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