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• What is ID Theft

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The U.S. Department of Justice defines identity theft this way:

“Identity theft is a crime. Identity theft and identity fraud are terms used to refer to all types of crime in which someone wrongfully obtains and uses another person’s personal data in some way that involves fraud or deception, typically for economic gain.”

Nonetheless, a rash of headline-grabbing scandals involving thefts of millions of personal records, together with the advent of phishing and pharming thefts (see page 5), may well change that figure dramatically in 2005. One other troubling finding: the study found that half of all identity thefts are committed by someone the victim knows. In spring 2003, the Federal Trade
Commission (FTC)—the federal agency responsible for tracking identity theft—conducted a major study of this crime. Among its findings:

• 12.7 percent of respondents reported that they had been victims of identity theft at some time over the past five years. This implies that at least 27 million Americans had their identities stolen.
• Victims reported that they spent 30 hours, on average, cleaning up after an identity crime at an average cost of $500.

In another study, covering 2004, the FTC reported that of 635,000 complaints registered with the agency, 61 percent involved fraud and 39 percent were identity theft complaints. This study also revealed the following:

• Credit card fraud was the most common form of identity theft, accounting for 28 percent of thefts reported.
• Phone or utilities fraud was next, accounting for 19 percent of identity thefts reported.
• Bank fraud followed, accounting for 18 percent of identity thefts reported. The FTC also presented some figures about identity theft committed over the Internet. Of 205,568 Internet-related complaints, 90
  percent of the victims reported they had suffered a financial loss. The average loss was $1,440.

According to the FTC, the highest reports of identity theft occurred in Phoenix-Mesa-Scottsdale, AZ; Riverside-San Bernardino-Ontario, CA; and Las Vegas-Paradise, NV. While sunny Phoenix and Las Vegas are retirement meccas, the FTC found that of all those who reported being victimized in the United States, only 9 percent were 60 and over while the largest number, 29 percent, were in the 18 to 29 age group.