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April 2005

Identity Theft Scams
Strike Again and Again

   The U.S. Federal Trade Commis-sion just released grim statistics on 2004 complaints relating to identity theft. An estimated 10 million Americans fell victim to identity theft last year, or nearly one new American victim every three seconds. Estimated losses are huge. A projected $5 billion was lost last year by American consumers and nearly $48 billion lost by businesses. The problem only continues to grow. By now you may have read about the reported thefts of financial information from ChoicePoint in

   February and DSW Shoe Warehouse and LexisNexis in early March. For consumer advocates, the ChoicePoint and LexisNexis thefts are startling. ChoicePoint is a Georgia-based spinoff of Equifax, one of the nation’s three largest credit-reporting agencies.

   According to press accounts, identity thieves were allowed to open 50 bogus ChoicePoint accounts where the thieves obtained social security numbers and credit reports on more than 145,000 consumer victims. Included in this total are 830 Wisconsinites. LexisNexis is considered a global leader in legal and business data. According to the Washington Post, identity thieves fraudulently obtained personal financial information on 32,000 consumers in a series of incidents.

   The ChoicePoint theft is notable because the company was only planning to notify potential victims by mail in California, since only California requires individual notification when a theft has occurred. Fortunately, significant pressure was brought on the company to notify all victims in all states. Even so, the notifications only began in February, despite the first thefts occurring in October of 2004. In fact, there have been reports ChoicePoint’s first security breach may have been as early as 2002.

   Several members of Congress are considering federal legislation requiring businesses to notify consumers when an identity theft has occurred. Congressional hearings have already begun and will likely continue through April.

   In my January column, I urged you to order your free credit report from each of the three major credit-reporting agencies beginning March 1. Federal law allows you to order the credit report free once per year. I ordered my credit report on March 1 and was astonished to find a ChoicePoint credit inquiry on my report from late last fall. I haven’t been one of the unlucky who have received a letter from the company informing me that my personal information may have been stolen, but it reminds me of the importance of checking my credit report for errors and to determine if there are indications I may have become a victim of identity theft. If you haven’t already done so, help protect yourself by ordering your free credit report at www.annualcreditreport.com or by calling 877-322-8228 toll-free.

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