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The Honolulu Advertiser

Posted on: Thursday, March 3, 2005

Identity thief is surprisingly often a relative, friend or neighbor

By Michelle Singletary
Washington Post

Don't be caught off-guard

Identity theft is frequently committed by someone the victim knows, says Ken Hunter, president and CEO of the Council of Better Business Bureaus. Among the questions you should ask yourself:

I How many people — a day-care provider, housekeeper, contractor, repair person, family member or friend — have access to your private financial documents?

I Where do you keep your files, checkbook or bank statements? Is your personal financial information kept in a locked drawer or a file cabinet?

I Do you just throw away bills, credit-card solicitations and such without shredding them?
Although a lot of folks fear that their identity will be stolen electronically, the thief is more likely to be someone you know, who would pick through your purse or pilfer your personal data right off your desk.

Within the past 12 months, 9.3 million American adults became victims of identity fraud, according to a new report by the Better Business Bureau and Javelin Strategy & Research.

In 2004, for the fifth year in a row, identity theft topped the list of complaints reported to the Federal Trade Commission, accounting for 39 percent of the 635,173 consumer fraud complaints received.

Identity thieves open new accounts in other people's names and rack up debts on existing accounts. To do that, they may use Social Security numbers, bank account information, addresses or phone numbers.

But according to The 2005 Identity Fraud Survey Report — released by the BBB and Javelin as an update of the Federal Trade Commission's 2003 Identity Theft Survey — relatives, friends and neighbors make up half of all known identity thieves.

This, of course, comes as good news to businesses that have been pushing online banking and other electronic transactions to consumers. CheckFree, Visa and Wells Fargo supported the research by the BBB and Javelin.

Still, I found it fascinating that when it can be determined how identity theft was committed, the victim usually knew the fraudster. Computer crimes accounted for just 11.6 percent of all known-cause identity fraud in 2004.

And here's another interesting fact from the report: When family members and friends open up new credit accounts in your name and commit other crimes, the total cost of the fraud is greater and requires more time to resolve than frauds committed by other criminals, the report found.

For example, the mean loss from information stolen from e-mails sent by criminals posing as legitimate businesses (called phishing) is $2,320. But the mean loss as a result of fraud by family and friends is $15,607.

So what should you do if someone you know steals your identity? Obviously, report them to the police, right?

"Frequently when we would break up a ring and get a list of victims and find family members were involved in the crime, (the victimized) relatives are very reluctant to cooperate," said Ken Hunter, president and CEO of the Council of Better Business Bureaus. "People are very reluctant to turn in that grandson."

Hunter was very practical on whether you should rat out your relative or friend. For example, if a nephew stole your identity to open up a credit account to buy CDs, Hunter said it may not be worth the guilty feelings and family trouble if you turn him in.

"If it's a matter of pilferage at a very low level; nothing much (criminally) is really going to happen to that person," Hunter said.

However, if a neighbor, friend or family member steals your identity and commits a major theft, you should notify the authorities, he said.

Hunter said people are more likely to be victimized if they fail to realize they are more at risk from someone they know.

The Better Business Bureau and Javelin have developed an Identity Safety Quiz. Take the quiz at www.idsafety.net.

Once you take the quiz, you get tips on how to protect yourself. For example, consider signing up for electronic bill-paying or have your account statements sent electronically.

If you do become a victim of identity theft, act quickly. If you're not sure what to do, get help.

Call For Action, a nonprofit consumer hot line based in Maryland, and Visa USA have teamed up to offer victims of identity theft confidential counseling. Call 1-866-ID-HOTLINE and a counselor will tell you what to do if your identity has been stolen.

Michelle Singletary writes for the Washington Post.