Identity theft costing U.S. consumers billions

By L.A. Lorek

Express-News Business, September 12, 2002

Carmen Groves, of San Marcos, shows papers dealing with someone's use of her identity. She has spent hours writing to collection agents and merchants. A forged signature on a check used by the identity thief.
Tom Reel/Express-News

The thief who stole Carmen Groves' identity has written more than $5,000 in bogus checks to department stores on her closed bank account.

The 77-year-old has spent uncounted hours writing letters to credit reporting agencies, filing police reports, canceling accounts and battling to get her identity back.

"I'm so scared," said Groves, who lives in San Marcos. "I never thought this would happen to me."

Groves is one of thousands of people who have their identities stolen each year. In San Antonio, an estimated 750 cases of identity theft are filed annually. It's one of the fastest growing crimes in the city, said Sgt. Martin Landgraf with the San Antonio Police Department's forgery department.

"It's costing billions, and we are all paying for it," Landgraf said.

Identity theft involves stealing another person's personal identifying information such as Social Security number, name, date of birth and mother's maiden name, and then using the information fraudulently to establish credit, run up debt, or take over existing financial accounts.

In most cases, the victim's wallet, checkbook or purse is stolen. But identity theft also occurs when criminals get personal information from misdirected or stolen mail. Thieves especially look for Social Security numbers, driver's license numbers and credit card information left on receipts.

Afterwards, the victim is left with a ruined credit history and the time-consuming and complicated task of regaining financial health.

The Federal Trade Commission reports that more than 86,000 Americans were victims of identity theft in 2001. That number has almost tripled from 31,103 in 2000. Identity theft represented 42 percent of all consumer complaints to the FTC in 2001.

The Privacy Rights Clearinghouse says the average identity theft victim is defrauded of $18,000.

In San Antonio, identity thieves have bought Porsches, houses, furniture, jewelry, clothes, electronics and much more using stolen identities, Landgraf said. Even some San Antonio Police Department officers have had their identities lifted, he said.

"Everybody is potentially a victim," Landgraf said.

Scott Brecher, a 33-year-old securities manager from Houston, had his identity swiped last year when someone stole his Social Security number and opened up credit card accounts in his name.

In March, Brecher discovered the crime when Fleet bank's collection department starting calling him about an overdue account. He didn't have an account with the bank. The thief had been using his identity for seven months and had run up more than $17,000 worth of fraudulent charges on two accounts, he said.

Brecher spent months trying to reclaim his identity and eventually became an advocate for changing the law in Texas.

Identity theft is a white-collar crime that is not taken seriously enough, Brecher said.

This year, a General Accounting Office report found that police nationwide have insufficient resources to investigate and prosecute identity theft cases.

Even when crimes are prosecuted and convictions obtained, identity theft cases generally do not result in long sentences.

Venue and jurisdiction problems are also common in identity theft cases. Many cases present cross-jurisdictional issues, such as when a criminal steals personal information in one city and uses the information to conduct fraudulent activities in another city or state.

Police catch the criminals in less than 10 percent of the cases, said Jay Foley, director of victim services with the Identity Theft Resource Center, a nonprofit organization that helps identity theft victims, based in San Diego.

Texas does not have a centralized source of aggregate or statewide statistics regarding the number of identity theft investigations, arrests or prosecutions for identity theft.

Since 1999, Texas has had an identity theft law that carries a sentence of imprisonment up to 10 years and a fine not to exceed $10,000. But it's unclear how many people have been convicted of the crime statewide.

The Internet bureau of the Texas attorney general's office reported it had opened 12 identity theft cases between September 2000 and August 2001, according to the GAO report.

"Texas really doesn't have a system or plans for dealing with identity theft," Foley said.

Some identity theft cases involve organized crime rings, Landgraf said.

In Dallas, a group of three individuals made about $750,000 in illegal transactions in less than 180 days by using identity fraud coupled with other traditional crimes such as credit card abuse, forgery and securing loans through deception.

Brecher wants Texas legislators to pass a law that would require the police to open an investigation in the person's local jurisdiction for identity theft and to provide the victim with a copy of the written police report.

The new law also would require the banks and other credit agencies to provide victims with access to records on accounts opened in their names, Brecher said. And victims should be able to petition the court for a "factual declaration of innocence."

Even though Brecher didn't have to pay for the fraudulent charges opened under his name, it did affect his credit rating.

Initially that meant he had trouble financing a new townhouse. He has since bought the townhouse, but the credit rating affected his insurance rates.

"It's amazing how many facets of your life your credit report affects," he said.

Carmen Groves knows the identity of the woman who stole her identity.

The 30-year-old woman has a similar name and put her driver's license number and phone number on bogus checks printed on a home computer and bearing the real Carmen Groves' bank account number, she said. Her crime spree took place in San Antonio and Houston.

Still, the woman has not yet been brought to justice. The San Antonio Police Department says the case is under investigation and they cannot talk about it.

Meanwhile, Groves worries the thief will continue to torment her with more bogus checks.

"I'm getting nasty letters and phone calls from collections agencies," Groves said.

llorek@express-news.net