Economy could sway identity theft, one way or another
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By JEAN ORTIZ/Lincoln Journal Star
Gloomy economic conditions could hurt consumers in the coming year in a way that may catch them off guard.
But it also could go the other way and secure them greater protection.
Two advocates trying to help people prevent and recover from identity theft, including one in Nebraska, may have differing viewpoints, but both say the economy will influence how the crime tracks into the future.
According to a new national study based on identity theft victim responses:
In 2007 victims paid an average of $550.39 out of pocket to repair existing accounts; damage from new accounts cost victims an average of $1,865.27.
In 2007 the average loss in goods and services to businesses was $48,941 — down from $87,303 in 2006.
Victims spent an average of 116 hours repairing damage to existing accounts; New accounts took an average of 158 hours.
Victims also listed a range of emotional impacts, including anger, a sense of betrayal, guilt and shame. Nearly half of respondents reported sleep disturbances.
Source: Identity Theft Resource Center’s report Identity Theft, The Aftermath 2007
Desperation during tough economic times could cause an increase in identity theft at a time where the crime is already costing victims thousands of dollars and hundreds of hours to put their lives back in order, said Jaimee Napp, the executive director of the Identity Theft Action Council of Nebraska.
“As people are in more of a dire financial situation, they’ll do things they just wouldn’t do normally,” she said.
But Linda Foley respectfully disagrees. The founder of the Identity Theft Resource Center, a national organization dedicated to preventing and understanding identity theft, said she believes the economic state could force credit issuers and others handling identity information to tighten up policies and stop identity theft before it occurs.
Foley’s organization publishes an annual report detailing how identity theft affects victims. In that study, she knows there are cases of desperate people carrying out the crime, but generally that’s the smallest category, she said. By and large, the people who commit identity theft have criminal tendencies.
“What we can say is identity theft is a crime of opportunity, not an act of a desperate measure,” she said.
The most recently released report, Identity Theft: The Aftermath 2007, is based on responses from 117 confirmed identity theft victims who contacted the Identity Theft Resource Center last year. The complete report is available online at www.idtheftcenter.org.
The fifth annual report, released earlier this month, paints a picture of the wide-reaching impact of identity theft, from consumers’ out-of-pocket expenses, losses to those of businesses, the emotional impact caused by the crime and the inability to repair the damage.
It documents an increase in check and debit card fraud and a rise as well in people falling victim to scams, as compared with previous years’ findings.
On a good note, Foley believes consumers are discovering the theft more quickly, which is critical to limiting damage and may shows signs educational efforts are working. Some 42 percent found out within three months the crime occurred.
Consumers might be getting the message of problems on their financial slate sooner from creditors who’ve become more aggressive as the credit market tightens, the report speculates.
The crimes continue to be carried out by several means including mail theft, Internet scams, and personal breaches of information in the workplace — which is what happened to Napp.
A co-worker stole Napp’s personal information and attempted to open four new lines of credit. She has since been prosecuted, while Napp went on to start her nonprofit organization in 2006 to help other victims.
The national report is inline with what she sees occurring locally, she said.
“There isn’t a type of identity theft we don’t see in Nebraska,” she said.
She advocates consumers take all the steps she did before becoming a victim — checking her credit report regularly, shredding documents with personal information and not carrying her social security card.
Nebraska consumers today have extra protection in having the ability to put a freeze on their credit, which prohibits unauthorized release of the information in the credit report.
But she sees a lot of work needed on the side of those approving the credit requests. Lawmakers, also hold the power to craft greater protections.
“The credit granting process is too easy,” she said.
Reach Jean Ortiz at 473-7107 or jortiz@journalstar.com.
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