FTC Press Release (September 2003)

FTC Releases Survey of Identity Theft in U.S. 27.3 Million Victims in Past 5 Years, Billions in Losses for Businesses and Consumers

The Federal Trade Commission today released a survey showing that 27.3 million Americans have been victims of identity theft in the last five years, including 9.9 million people in the last year alone. According to the survey, last year’s identity theft losses to businesses and financial institutions totaled nearly $48 billion and consumer victims reported $5 billion in out-of-pocket expenses. The agency also released a Commission report detailing its ID theft program since its inception.

“These numbers are the real thing,” said Howard Beales, Director of the FTC’s Bureau of Consumer Protection. “For several years we have been seeing anecdotal evidence that identity theft is a significant problem that is on the rise. Now we know. It is affecting millions of consumers and costing billions of dollars. This information can serve to galvanize federal, state, and local law enforcers, the business community, and consumers to work together to combat this menace.”

The FTC is the nation’s consumer protection agency. Since 1998, the FTC has had an Identity

Theft Program to assist identity theft victims and provide guidance on how to resolve the problems, provide law enforcement training, maintain a nationwide database of ID theft complaints available to law enforcement and refer complaints to criminal law enforcement agencies, and provide business and consumer education. The FTC also maintains the nation’s primary identity theft Web site, which provides critical resources for consumers, businesses, and law enforcers at www.consumer.gov/idtheft .

A number of laws limit consumers’ liability if they are the victim of identity theft. Not all costs are covered, however. The survey reviewed the different impact on victims who had existing accounts misused and those victims where the thieves opened new accounts in their names.

Where the thieves opened new accounts, the per-victim dollar loss to both businesses and victims was higher and the time spent resolving the problems was greater. The survey found in the past

12 months those 3.23 million consumers discovered that new accounts had been opened, and other frauds such as renting an apartment or home, obtaining medical care or employment, had been committed in their name. In those cases, the loss to businesses and financial institutions was $10,200 per victim. Individual victims lost an average of $1,180. Where the thieves solely used a victim’s established accounts, the loss to businesses was $2,100 per victim. For all forms of identity theft, the loss to business was $4,800 and the loss to consumers was $500, on average.

According to the survey results, fifty-two percent of all ID theft victims, approximately 5 million people in the last year, discovered that they were victims of identity theft by monitoring their accounts. Another 26 percent - approximately 2.5 million people - reported that companies such as credit card issuers or banks alerted them to suspicious account activity. Eight percent reported that they first learned when they applied for credit and were turned down.

While most identity thieves use consumer personal information to make purchases, the survey reports that 15 percent of all victims - almost 1.5 million people in the last year - reported that their personal information was misused in non-financial ways, to obtain government documents, for example, or on tax forms. The most common non-financial misuse took place when the thief used the victim’s name and identifying information when stopped by law enforcement or caught committing a crime.

Sixty-seven percent of identity theft victims - more than 6.5 million victims in the last year report that existing credit card accounts were misused and nineteen percent reported that checking or savings accounts were misused.

The survey reports that 51 percent of the victims - about 5 million victims - say they know how their personal information was obtained. Nearly one-quarter of all victims - roughly 2.5 million people in the last year - said their information was lost or stolen, including lost or stolen credit cards, checkbooks or social security cards. Stolen mail was the source of information for identity thieves in 4 percent of all victims - 400,000 in the last year.

The report detailing the FTC’s ID theft program, since its inception in 1998, states that complaints to the agency about identity theft have nearly doubled each year since then. Consumers can file complaints by calling the toll-free hotline at 1-877-IDTHEFT or through the FTC’s identity theft Web site at www.consumer.gov/idtheft.

The complaints are entered into a secure database, the Identity Theft Clearinghouse, which can be accessed by criminal law enforcers across the country. Today, more than 725 federal, state, and local law enforcement agencies have access to the database, providing more than 4,200 individual law enforcement agents access to the system from their desktops, 24 hours a day. In conjunction with the U.S. Postal Inspection Service, the U.S. Secret Service, and the Department of Justice, the FTC provides identity theft investigation training to state and local law enforcers. These and similar training sessions have been held in 10 cities across the country, and 1,000 officers representing more that 280 different agencies have participated. Other outreach initiatives include participation in a CD-ROM resource guide produced by the Secret Service that instructs officers on identity theft, investigative resources, and victim assistance. These CD-ROMS are being sent to over 40,000 law enforcement departments across the country.

The FTC report notes that the Agency also has worked with private industry on identity theft issues. In conjunction with industry and consumer advocates, the FTC developed a single, standard form for victims to use in reporting identity theft. In addition, the FTC has worked with the three major credit-reporting agencies, who now share victims’ requests for fraud alerts with each other, eliminating the need for consumers to contact all three agencies. The agency will soon publish a guide to help businesses and other organizations securely maintain the personal identifying information they have.

Copies of the reports are available from the FTC’s Web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center , Room 130, 600 Pennsylvania Avenue, N.W. ,

Washington , D.C. 20580 . The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint, or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1 877-382-4357 ), or use the complaint form at

http://www.ftc.gov. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.