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IN DEPTH: BANKING & FINANCE
From the May 14, 2004 print edition
Guest Commentary

Businesses, too, are vulnerable to identity theft
Businesses lost $48 billion to identity theft in 2002

Matthew Mangino

Identity theft is the fastest-growing white-collar crime in America. Unlike other crimes, identity theft requires no direct contact with victims and is particularly insidious in that a victim may not discover the crime until long after it was committed.

According to a 2003 study by Gartner Research, there are 13.3 new victims of identity theft every minute in this country. Over the course of a year that equals 7 million new victims, or 1 in every 50 Americans. The Federal Trade Commission found that those 7 million victims will spend on average 175 hours and approximately $1,000 to fix their credit. Identity theft doesn't just affect individuals; in 2002, according to the FTC, businesses lost a whopping $47.6 billion to identity theft.

According to Pennsylvania law, "a person commits the offense of identity theft of another person if he possesses or uses, through any means, identifying information of another person without the consent of that person to further any unlawful purpose."

The 'unlawful purpose' of identity thieves generally reaches far beyond economic gain. Law enforcement officials around the country are linking identity theft with drug abuse. Meth and crack addicts are trading stolen mail for drugs, and meth abusers are using stolen IDs during their around-the-clock high to make credit card purchases online.

What makes identity theft frightening and each of us notably vulnerable is that it's easier to commit than we think. Any criminal who can access an individual's date of birth, social security number or obtain credit card and bank account information can wreak havoc.

Criminals can get personal information relatively easily through burglary, purse snatching, mail grabbing or dumpster diving. More cunning criminals eavesdrop on bank transactions or look over the shoulder of tax preparers. The most sophisticated identity thieves operate in seedy networks that buy and sell identities in bulk from employees in the banking, finance or credit card industry. Those networks churn out millions of dollars in fraudulent transactions. There are also the careless or uninformed owners of small businesses who do nothing to protect the identity of their customers or clients.