U.S. Treasury: ID Theft on the Rise

ByJeanine Aversa

W A S H I N G T O N, June 18, 2001 -- The number of identity thefts reported by U.S. banks and other financial institutions more than doubled in 2000 from the previous year, the government said.

There were 617 instances of identity theft reported by financial institutions from January through November last year, compared with 267 cases for all of 1999, according to information released Monday and compiled by the Treasury Department’s Financial Crimes Enforcement Network, or FinCen.

The information was contained in broader “suspicious activity” reports that financial institutions file to the government to help snag money launderers and other lawbreakers. Other federal agencies have told Congress the problem is much broader.

One government identity-theft hotline is getting an average 1,700 calls a week. Privacy advocates have said the number of people victimized may be as high as 750,000 a year.

Last month, the Social Security Administration’s inspector general, James Huse Jr., told lawmakers that identity theft often begins when someone acquires on the Internet another person’s Social Security number — a number used as a general proof of identity in the United States.

He said the problem was “catalyzed by the Internet,” and “has quickly become a national crisis.”

Simple Theft Still Prevalent

“The most common ways to become the victim of identity theft are through the loss or theft of a purse or wallet, mail theft and fraudulent address changes,” FinCen said.

But there also were instances in which relatives, roommates or even bank employees stole the identity of another person. These individuals have easy access to checking account numbers, Social Security numbers and other records, which can be used to assume someone else’s identity.

FinCen said there were instances where stolen Social Security numbers were used to obtain car loans, often for luxury cars such as Jaguar, BMW and Mercedes-Benz.

“Almost across the board, the bank becomes alerted to the scheme because the perpetrator will immediately default on the loan payments,” FinCen said.

When it comes to mail theft, bank checks or checks issued by credit card companies often are stolen. The thief will write checks against the victim’s account. But the victim won’t become aware until he receives his monthly statements, FinCen said.

In 1998, financial institutions reported 81 instances of identity theft, up from 44 in 1997.

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