Cactus Village Community

FTC to Ease Process of Reporting Identity Theft

Jul 08, 2003

Fraud: Agency is providing a standard, industry-approved form for notifying creditors and disputing debts.

By KATHY M. KRISTOF, TIMES STAFF WRITER

The Federal Trade Commission, in a tacit acknowledgement of the difficulty for consumers to recover from so-called identity theft, is expected to announce Tuesday a method for making it easier for victims to report the fraud to creditors.

The agency's ID Fraud Affidavit, created with assistance from major card companies and consumer groups, gives consumers a standard way to dispute the debts and credit scars left by identity thieves.

Such crimes, in which thieves use the victim's Social Security number and other personal data to open charge accounts and make purchases, have been growing rapidly in recent years, with an estimated 600,000 to 750,000 occurrences annually. The FTC said last month that identity theft accounted for 42% of all consumer complaints it received in 2001.

"This standardized form . . . will help to streamline the efforts needed by the victim," said Linda Foley, executive director of the Identity Theft Resource Center in San Diego.

Consumers who are victimized by this crime generally find out about it only after the thief stops paying on the debts taken out in the consumer's name.

In the past, individual creditors often have required victims to fill out pages of proprietary documentation that needed to be mailed in, sometimes after being notarized.

The new standardized form, already posted on the government's identity theft Web site at www.consumer.gov/idtheft and backed by the financial industry, will eliminate the myriad forms, allowing consumers to fill out one document and provide photocopies to creditors.

Most major creditors, including Bank of America, GE Capital and Merrill Lynch, already have agreed to accept the FTC's standard form, experts said Sunday.

That should make it easier, but, unfortunately, no less expensive for consumers to handle the mound of work required to clear their names after they've been victimized by identity fraud, said Beth Givens, director of the Privacy Rights Clearinghouse, a San Diego consumer group that provides information on identity theft.

The seven-page form must be filled out, photocopied and mailed to the three major credit bureaus, as well as to each creditor duped into opening an account by an identity thief.

Identity theft experts urge consumers to send the form by certified mail, return receipt requested, despite the cost of about $4 per letter. The reason: It prevents creditors from claiming that they never received the consumer's paperwork--an occurrence consumers commonly report. Some creditors also still expect the FTC's ID Theft Affidavit to be notarized--a requirement consumer groups find onerous.

"If you have a victim dealing with 30 different credit card accounts, and you have to pay a $10 notary fee each time, that's $300," Foley said. "If creditors want this form notarized they should be willing to pay the cost."

The average victim of identity fraud spends 175 hours and an average of $808 trying to clear their names, according to the Identity Theft Resource Center.

"The burden of proof still solidly rests on the shoulders of the victim," said Foley, who was part of the identity fraud task force that created the new form. "A great deal more needs to be done."

Several bills aimed at preventing identity theft by restricting access to Social Security numbers and other privy consumer information are in the works, Foley said. A California law, which aims to stop companies from using Social Security numbers on public documents, such as health insurance identification cards, passed last year and will be phased in, Givens added.

In the meantime, consumers must protect themselves by periodically reviewing their credit reports and by taking care with documents that list their Social Security or credit card account numbers.

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(BEGIN TEXT OF INFOBOX)

If You're a Victim of Identity Fraud

Call the fraud lines at the three major credit reporting bureaus to have a fraud alert placed on your account. The hotline numbers:

* Equifax: (800) 525-6285

* Experian: (888) EXPERIAN

* Trans Union: (800) 680-7289

For the new ID Theft Affadavit, point your Web browser to:

www.consumer.gov/idtheft . . .☺