All About Identity Theft
Identity theft is a rapidly growing crime and one that can devastate your credit if you are not careful. In 2003 the Federal Trade Commission that once thought that 700,000 to one million Americans were affected each year announced that actually 27.3 million Americans had been victimized in the past five years including 9.9 million people in 2004 alone.
The annual costs of this type of theft are incredibly high and include –
• $48 billion in annual losses for business and institutions
• $5 billion in out-of pocket expenses for consumers
• 300 million joint hours spent by consumers who attempt to resolve the matter and clear up their credit reports.
Identity theft comprises a variety of crimes from stealing someone’s credit card number to opening accounts in the victim’s name. About 15 percent of victims report that their identities were stolen for purposes other than obtaining credit such as to get government documents, commit fraud and mislead police. It is quite common for example for a person to give a phony name and Social Security number when arrested or stopped for a traffic violation.
Thieves do a lot of damage when they steal your I.D. By masquerading as you they can open up new credit card accounts, get a car loan, pay medical bills and rent an apartment. When bills are due they don’t pay them and these charge offs, collections, repossessions and judgments end up on our credit report.
This type of “new account†theft costs makes up for about 70% of the losses experienced by businesses and financial institutions. An individual spends an average of 300 to 600 hours clearing up their credit after this.
The biggest consumer of time is trying to expunge fraudulent accounts from credit reports. The credit bureau can give you the run around for ages even if you are in the right. The bureaus say the problem is the lenders who continue to report false information to the bureaus even after they have been told the accounts might be fraudulent.