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DeWitt, Michigan (MichiganPR.net)
March 7, 2007
A new study provides a sobering reminder that consumers need to be more vigilant than ever in protecting themselves from the impact of identity theft, a Michigan identity theft expert warns. According to a study released this week by Gartner Research, cases of financial fraud as a result of identity theft have increased more than 50% since 2003. The number of cases of fraud during a 12-month period ending in mid-2006 was 15-million, up from the 9.9-million reported by the Federal Trade Commission in 2003.
"Even more frightening is that the survey only measured financial identity theft," said DeWitt, Michigan identity theft consultant Walter Sorg.
"Earlier studies have shown that non-financial identity theft constitutes half of all cases. If that ratio holds true, there are now 30-million victims of identity theft annually."
Non-financial identity theft falls into four categories, said Sorg. They include:
* medical identity theft, where the criminal receives medical treatment using the name (and often the insurance or government benefits) of the victim. In addition to draining insurance benefits, medical ID theft can leave life-threatening misinformation in the victim's medical file.
* employment identity theft, which allows illegal immigrants and others hiding from law enforcement to obtain jobs, leaving the victim on the hook for unpaid taxes. It can also result in victims losing means-tested benefits such as government assistance or scholarships.
* DMV identity theft, where the victim ends up paying the many costs of traffic violations committed by the criminal.
* Criminal identity theft, which can result in the victim being arrested and jailed because of warrants issued as a result of crimes committed in their name by someone else. The victim can lose a job because a criminal background check turns up inaccurate information about warrants or convictions.
The best defense against identity theft, said Sorg, is combining caution with the imperfect precaution of regularly checking credits reports. "Credit report information will only expose financial identity theft, but that information can provide an indirect warning about other types of identity theft."
Given the speed with which thieves can exploit a person's private information, a monitoring service makes sense. Relying on free annual credit report checks, he said, can give identity thieves a lot of time to create damage before the victim finds out.
"Consumers should also look closely at the advantages of a service which restores their identity should they become a victim. While the average financial losses of identity theft have increased to more than $3,200, for many the most serious impact is the hundreds of hours it can take to restore your identity."
Consumers, he said, should be careful to differentiate between "resolution services" and "restoration services".
Companies offering cash compensation for identity restoration costs, or who offer "resolution counseling services," are leaving the work of identity restoration to the victim. Victims must still spend the time and frustration of dealing with the impact of identity theft.
"Restoration services actually assign a trained investigator to handle the paperwork and phone calls needed to restore the victim's identity. A restoration service will have the victim sign a limited Power of Attorney allowing the agent to clean up the mess, relieving the victim of what can be a traumatic experience," he said.
Consumers should also consider whether their coverage provides access to nationwide legal support. Many impacts of identity theft, such as being arrested, sued for collection, or losing a drivers license, mean the victim will need legal help. Given the fact that identity theft is a "borderless crime," victims can face legal challenges anywhere.
Most importantly, Sorg said, consumers must recognize that they cannot prevent their identity from being stolen.
"Increasingly the criminals are gathering the data through third-party databases. Each of us has our personal information in dozens of databases, some of which are actually available for purchase. There is no practical way for each of us to protect ourselves from someone else losing our data."
Walter Sorg is a Certified Identity Theft Risk Management Specialist, and independent associate of Pre-Paid Legal Services.
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