November 16, 2005
One in every 20 persons is now the victim of identity theft – and that number is expected to rise dramatically within the next five years.
“Never believe that you can’t be a victim because your information is out there and has been for decades,” said Ed Hewitt of American Criminal Investigators Network.
Detective Hewitt, a nationally known speaker and expert on identity theft, briefed 55 Hood River County law enforcement officials and community members on the growing problem last week. He also made recommendations during the two-hour forum about how citizens could avoid being targeted. Hewitt’s presentation at the Hood River Inn was arranged by A.G. Edwards & Sons, Inc., of Portland.
“This is the fastest-growing criminal activity in America today. Typically, it’s all evolving from methamphetamine activity – a plague that’s attacking our entire country,” said Hewitt.
He said identity theft during 2000 accounted for a $2.5 billion loss in financial markets. By 2005, that number had skyrocketed to $8 billion. Within the next five years, Hewitt said that number will rise even higher since one out of every four people is expected to be hit by an identity thief.
Hewitt said meth users have a lot of time on their hands to indulge in crime since they rarely sleep. Instead, he said they get high and spend hours looking for ways to support their habit by draining someone else’s bank account. Typically, he said there are three people working together in an identity theft operation. The “collector” dumpster-dives, steals mail and uses other illegal methods to obtain personal information. That data is then turned over to the “converter,” who checks for a good credit score and open accounts to work from. The converter then creates counterfeit checks and false identification that a “passer” can take to the bank.
Often, said Hewitt, credit and bank accounts are also accessed over the telephone or via computer. Money is drained away within hours after the thieves have gotten their hands on the necessary information.
“Identity theft is so easy and it produces such great profits,” said Hewitt.
He said the problem is complex to resolve because there are multiple avenues for thieves to obtain data. Hewitt listed the following criminal methodology to underscore the scope of the problem:
* Old files thrown out by physicians and other businesses that contain an individual’s name, Social Security number and date of birth.
* “Mole” employees working for an insurance company or bank who pass along data to a collector. Insider theft is blamed for millions of “lost” files from major corporations.
* Wallets and purses stolen from vehicles or shopping carts. The majority of car prowls resulting in identity theft have been linked to health clubs, said Hewitt. He said people using sports facilities are more likely to leave their purse or wallet in the vehicle, and be gone for a predictable period of time.
* Paying a waitress or service worker to swipe the credit card of a customer on a “skimmer block” during payment. The hand-held device is small and can be stowed in clothing or under a counter. It stores account information that is later downloaded and turned over to a converter.
* Fitting ATMs with a special data collector that captures the user’s information for later transmission to a converter.
* Mounting a camera unseen near an ATM to capture the Personal Identification Number of the user. If a receipt is left behind then the account number is also available.
* Compromising computers to allow outside access from a hacker into internal software programs.
However, Hewitt said the most “egregious offenders” for identity theft are usually known to the victim. He said many times family members who are using drugs prey on trust relationships to feed their habits.
There isn’t much overhead involved in working an identify theft, according to Hewitt. He said the typical operation requires only an apartment or motel room, a computer, a high quality printer, financial software, and Internet access.
“Identity theft is seen by many as a victimless crime but I disagree,” said Hewitt. “It is a nightmare that costs the individual in both reputation and time.”
Hewitt recommends that business owners lock all confidential documents in a location secured by burglar alarms at night. And that a background check be done on every employee, and no one be allowed on the premises without an identification badge. He said encrypted files should be used to store data on a computer. In addition, all machines need to be checked periodically for devices that store information from the keyboard for transmittal to a converter.
“If you’re in business you need to prepare yourself and have a plan to communicate with customers if you lose data,” said Hewitt.
He said residents should not put outgoing correspondence in a mailbox overnight. Nor should they signal there is something in the box by putting up the red flag. Hewitt said wallets, purses, files and laptop computers should not be left unattended in a vehicle. And no personal information should be given out via e-mail or telephone.
Hewitt suggested that citizens look into protection from an identity theft insurance policy, which costs an average of $30 to $120 dollars per month. He said most consumers do not discover an identity theft until six months after it has occurred, and then spend 60-175 hours clearing up the problem.
He also recommends that a cross-cut shredder be used to destroy both home and office documents. He said the dual cut makes it much harder to piece paper back together.
“Everything that you carry in your wallet is subject to somebody stealing it, so minimize what you carry,” he said.
Hewitt advises that residents keep an eye on their credit reports to spot fraudulent activity. Free copies are furnished once each year by all three major credit bureaus. These records can be requested by calling (822) 322-8228 or accessing www.annualcreditreport.com
If you do suspect identity theft, Hewitt said a police report should be filed immediately. He said that will lend credibility to loss claims filed with lenders and financial institutes.