September 3, 2003

Identity Theft Affects Millions, Survey Shows

ore than 27 million Americans have been victims of identity theft in the last five years, a survey released today by the Government estimated, including nearly 10 million in the last year alone.

The costs of the misuse of information fraudulently obtained from everything from credit cards to bank accounts to stolen Social Security cards is significant.

According to the survey, which was conducted by the Federal Trade Commission, businesses and financial institutions suffered losses of nearly $48 billion last year. To deal with the problem, consumers reported nearly $5 billion in out-of-pocket expenses.

In all, the F.T.C. estimates it took the private sector and consumers nearly 300 million hours to resolve the problems created by identity theft.

"For several years, we have been seeing anecdotal evidence that identity theft is a significant problem that is on the rise," said Howard Beales, director of the F.T.C.'s Consumer Protection Program.

"Now we know it is. It is affecting millions of consumers and costing billions of dollars."

Nevertheless, Mr. Beales said he was surprised that the problem is as large as it is.

In conducting its nationwide survey, the Commission conducted telephone interviews with more than 4,000 consumers in four two-day periods during March and April.

"One of the reasons we conducted as large a sampling as we did was because we didn't think we would turn that much of it up," Mr. Beales said at a news conference this afternoon.

"Previously, we never had an estimate of the extent of the problem. For the first time, we think we know what it is."

Abuses involving credit cards and checking and savings accounts dominate the instances of identity theft, according to the survey. But a significant number of thieves are misusing personal information in non-financial ways.

According to the survey, 67 percent of the respondents said their credit card accounts had been misused in the past year. Another 19 percent said thieves had tapped into their checking or savings accounts.

In the last year, however, the F.T.C. estimates that 15 percent of those who were victimized by identity theft, almost 1.5 million people, had personal information that was used in non-financial ways, from fraudulently obtaining government documents, for example, or on tax forms.

Based on the survey results, the F.T.C. estimates that in the last 12 months 3.23 million consumers discovered that new accounts had been opened, and that other frauds such as renting an apartment or home, obtaining medical care or gaining employment had been committed in their name.

Consumers are beginning to wake up to the problem.

According to the survey, more than half discovered they were victims by monitoring their accounts. Nearly one-third discovered the problem in a week.

Moreover, while the aggregate amount of expenses to deal with the problem looks large, most consumers surveyed did not spend a dime to solve the problem.

Mr. Beale said that nearly two-thirds of the victims had no out of pocket costs "at all."

"Consumers are beginning to look for signs of trouble," he said. "It is important to recognize that most victims get made whole. But it probably takes an effort to get there."

"Education, outreach and media reports are helping consumers wise up."

Since 1998, the F.T.C. has had an Identity Theft Program to assist victims and provide guidance on how to resolve the problems.

"Our Identity Theft Data Base now houses over 400,000 complaints," Mr. Beales said.

"We urge consumers who think they have been victimized to contact us."