Identity theft could hit victims harder during economic downturn, survey finds
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Victims reported that they have missed payments because of ID theft and suffered serious repercussions as economy worsens.
A survey of identity theft victims found that one in 10 had missed a payment because of the theft, leading to problems such as lowered credit scores, utility shutoffs, repossessions and even bankruptcy, foreclosure and jail time, according to Nationwide Insurance.
The insurance company, based in Columbus, Ohio, commissioned the study in which 400 people, including 200 victims of identity theft, were interviewed. The survey claims a 5 percent overall margin of error.
Nearly half of the respondents said that they did not know whether they had enough cash reserves to survive an identity theft.
Identity theft has been the No. 1 complaint to the Federal Trade Commission for eight years, and the wholesale exposure of personally identifiable data continue to occur on a weekly basis, many of them from government IT systems. According to the Privacy Rights Clearinghouse, which tracks publicly reported breaches, 31 incidents involving federal, state and local government have been reported so far this year. They include the hacking of up to 43,000 names and Social Security numbers from the Federal Aviation Administration in February, and the alleged theft by a Library of Congress employee of information on 10 people that was used to open phony accounts with which $38,000 worth of goods were purchased.
Stolen laptops were a common source of lost data, although the U.S. Consulate in Jerusalem reportedly auctioned off a filing cabinet that contained hundreds of paper files with Social Security and bank account numbers. Colleges and universities also were frequent offenders, and state agencies also exposed information on thousands of persons on Web sites, through inappropriate e-mail attachments or other mistakes.
The largest single breach was an archived tape with records of 807,000 criminal background checks that went missing in February from the Arkansas Department of Information Systems/Information Vaulting services. The New York Police Department reported the theft of eight tapes with information on up to 80,000 current and former officers.
Although many data breaches do not result in the misuse of data or an identity theft, the possible exposure of personally identifiable information can put a strain on the individuals and organizations involved. The Veterans Affairs Department, for instance, has spent millions of dollars providing credit protection services to persons whose information was exposed in a number of breaches, and recently agreed to pay $20 million to settle a lawsuit over the 2006 theft of a laptop computer containing records of millions of veterans, even though the computer was recovered with the data apparently intact.
Nationwide said previous polls had found that ID theft victims spend an average of 81 hours trying to resolve their cases, and that one in four cases were unresolved after a year.
“Identity theft is the only crime where the victim is generally presumed guilty until he or she can prove innocence,” said Nationwide Chief Privacy Officer Kirk Herath.
The typical ID theft victim in the Nationwide survey was Caucasian, female, between the ages of 35 and 54, college educated, married and employed full time. People who are separated or divorced and those making more than $75,000 a year also are more likely to be victims.