A Window into the Aftermath of ID Theft
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By Susan Grant, Consumer Federation of America Director of Consumer Protection and Privacy

Since 2003, the nonprofit Identity Theft Resource Center (ITRC) has surveyed individuals who have sought its counseling for identity theft problems to ask them how their stolen information was fraudulently used and how the crime affected them. This year’s report, Identity Theft: the Aftermath 2016™, is even more revealing than previous ones because the ITRC dug deeper into the impact that identity theft can have on victims. It is based on responses from 300 individuals who contacted the ITRC in 2015. 

New account fraud was reported by 60 percent of those surveyed, up six percent from 2014. According to the ITRC, which also tracks data breaches, this increase may be due, at least in part, to the fact that more than 150 million Social Security numbers were exposed in breaches last year. Forty-six percent of respondents experienced fraudulent activity on existing accounts, also up by about six percent. While takeovers of credit card accounts were down by nearly two percent, perhaps reflecting the initial rollout of the new “chip” cards, which are designed to thwart counterfeits, unauthorized transactions on debit cards, checking or savings accounts, loans or lines of credit, and other types of financial accounts such as PayPal all increased.

Some victims left their financial institutions as a result of the fraudulent activity on their accounts (28 percent changed banks, 22 percent changed credit card issuers, and 12 percent changed credit unions). The negative consequences of doing so included inconvenience, losing time from work or school, having to ask friends or relatives for money other assistance, and even having to ask a church or other faith-based organization for help.

Forty-three percent of survey respondents reported that their stolen information was used to file tax returns in their names, get drivers’ licenses, or obtain jobs, up from 32 percent in 2014. Tax fraud in particular increased by 15 percent. This is more than an inconvenience; nearly half of the tax fraud victims did not receive their rightful refunds, forcing them to borrow money from family and friends, apply for government assistance, obtain a payday loan, use a credit card to cover their needs, seek assistance from a church or other faith-based organization, or simply go without.

Criminal identity theft can be even more devastating. When people who are suspected of crimes use other people’s identification as theirs, it can lead to false arrests and erroneous court records, generally and wreak havoc in the identity theft victims’ lives. The 20 percent of survey respondents who said they had experienced this problem, more than 60 percent said that it resulted in their having to borrow money, nearly 33 percent had to use their savings to pay for expenses, 44 percent lost a job opportunity, 31 percent lost their place of residence, 33 percent could not qualify for a home loan as result, nearly half had to rely on friends and family for assistance, and almost 56 percent missed time from work.

As the report documents, identity theft also takes a heavy emotional and physical toll on victims. It’s upsetting and stressful. Victims may feel betrayed if the theft was committed by someone they know. Employers, family members and friends are not always supportive. The Aftermath study helps us understand the full scope of the identity theft problem and think more holistically about how to respond to it, including the types of assistance that victims need.