ID theft victimizes 27 million in 5 years

WASHINGTON — During the past five years, 27.3 million Americans, including 9.9 million in 2002, were victimized by identity theft, the Federal Trade Commission reported Wednesday.

In Utah, the Bureau of Criminal Identification reported identity theft grew more than 1,500 percent from 1996 to 2002. The Identity Theft Task Force said ID theft had increased from 32 cases in 1996 to 527 in 2002.

Announcing consumer losses of $5 billion and business losses of almost $48 billion, Howard Beales, director of the FTC's Bureau of Consumer Protection, said the statistics were based on a national telephone survey of 4,000 people taken this year to assess the impact of identity theft.

"We knew we had a problem but this is the first survey to measure the dimensions of it," said Beales. "ID theft is a big-ticket item. These numbers are the real thing. This is affecting millions of consumers and costing billions of dollars."

He said that credit card reporting agencies and banks were being urged to use more caution about new accounts and to establish a "red flag system" to recognize irregularities. Beales added that there is consideration on Capitol Hill of legislation expanding the Fair Credit Reporting Act to make identity fraud more difficult.

Several bills to beef up penalties for identity theft are pending on Capitol Hill, including a measure by Sen. Dianne Feinstein, D-Calif., calling for a five-year prison term.

Beales also urged consumers to exercise care when using the Internet, where he said the latest scam was an attempt to persuade people to e-mail their Social Security and credit card numbers so that they could be "updated."

Asked why identity theft had soared over the past few years, Beales said, "It is a fairly easy way to make money."

In addition to physical theft of data, computer hackers and corrupt employees of financial institutions contributed to the problem, he said.

Consumers' legal liability to identity theft is limited by current law, which does not cover all costs, according to Beales.

The survey showed that in the past year, almost 10 million Americans

discovered they were victims of some form of ID theft, either by misuse of existing credit cards or by fraudulent invention of new accounts.