Indiana Consumer Lawyer Blog
I recently came across a survey conducted by the California Public Interest Research Group and the Privacy Rights Clearinghouse. The survey was conducted in the spring of 2000 and included 66 identity fraud victims who were selected because they had contacted these agencies. Since millions of people have been victims of identity theft, the survey can in no way be considered representative. In fact, it is probably representative of victims who were most adversely impacted. Even so, and even though the survey is several years old, I think it is some great anecdotal evidence of the devastation that identity theft can sometimes cause.
Here is a summary of the survey’s findings:
§ Forty-five (45%) of the victims consider their cases to be solved; and it took them an average of nearly two years, or 23 months, to resolve them. Victims (55%) in the survey whose cases were open, or unsolved, reported that their cases have already been open an average of 44 months, or almost 4 years.
§ Three-fourths, or 76%, of respondents were victims of “true name fraud.” Victims reported that thieves opened an average of six new fraudulent accounts; the number ranged from 1 to 30 new accounts.
§ The average total fraudulent charges made on the new and existing accounts of those surveyed was $18,000, with reported charges ranging from $250 up to $200,000. The most common amount of fraudulent charges reported was $6,000.
§ Victims spent an average of 175 hours actively trying to resolve the problems caused by their identity theft. Seven respondents estimated that they spent between 500 and 1500 hours on the problem.
§ Victims reported spending between $30 and $2,000 on costs related to their identity theft, not including lawyers’ fees. The average loss was $808, but most victims estimated spending around $100 in out-of-pocket costs.
§ Victims most frequently reported discovering their identity theft in two ways: denial of either credit or a loan due to a negative credit report caused by the fraudulent accounts (30%) and contact by a creditor or debt collection agency demanding payment (29%).
§ Victims surveyed reported learning about the theft an average of 14 months after it occurred, and in one case it took 10 years to find out.
§ In one-third (32%) of the cases, victims had no idea how the identity theft had happened. Forty-four percent (44%) of all the victims had an idea how it could have happened, but did not know who the thief was. But in 17% of the cases, someone the victim knew — either a relative, business associate, or other acquaintance — stole his or her identity.
§ Victims reported that all of the credit bureaus were difficult to reach, but the hardest one to get in touch with, and the one about which most negative comments were made, was Equifax. Over one-third of the respondents reported not being able to speak with a “live” representative at Equifax or Experian despite numerous attempts. Less than two-thirds felt that the credit bureaus had been effective in removing the fraudulent accounts or placing a fraud alert on their reports. Despite the placement of a fraud alert on a victim’s credit report, almost half (46%) of the respondents’ financial fraud recurred on each credit report.
§ All but one of the respondents contacted the police about their cases, and 76% of those felt that the police were unhelpful. Law enforcement agents issued a police report less than three-fourths of the time, and assigned a detective to the victims’ cases less than half of the time. Despite the high rate of dissatisfaction with law enforcement assistance, 21% of the victims reported that their identity thieves had been arrested, often on unrelated charges.
§ Thirty-nine percent (39%) of the victims reported contacting the postal inspector about their cases, and only 28% (7 out of 25) of those respondents found the post office helpful. Only four of the respondents reported that the postal inspector placed a statement of fraud on their name and address.
§ Forty-five percent (45%) of the respondents reported that their cases involved their drivers’ licenses. For example, the license had been stolen and used as identification, or the thief had obtained a license with his or her picture but containing the victim’s information. Fifty-six percent (56%) of the respondents contacted the Department of Motor Vehicles, and only 35% of those found the DMV helpful.
§ Forty-nine percent (49%) of the respondents contacted an attorney to help solve their cases. Forty-four percent (44%) of those people found their attorney to be somewhat helpful. Many consumers contacted attorneys at public interest law firms and received advice for free. Attorneys’ fees ranged from $800 to $40,000.
§ Respondents reported that the most common problem stemming from their identity theft was lost time (78% of consumers identified this problem). Forty-two percent (42%) of consumers reported long-term negative impacts on their credit reports, and 36% reported having been denied credit or a loan due to the fraud. Twelve percent (12%) of the respondents noted as a related problem that there was a criminal investigation of them or a warrant issued for their arrest due to the identity theft.
Unfortunately, even though this survey is from 2000, my own personal experience dealing with identity fraud victims tells me that the procedures for victims to clean up their credit reports are not much improved from 2000, and, in fact, the nightmares evidenced in this survey continue to occur en mass.