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Identity theft tops consumer woes ... again

Reports of Internet-related fraud now account for more than half the consumer complaints filed with the Federal Trade Commission, the agency said Thursday.
/ Source: msnbc.com

Ain Jones is haunted by an imposter.  Her money was stolen, her car insurance doubled in price, she lost her driver's license, there were warrants out for her arrest and she had to pay a $300 court fine. There are fraud warnings and notices on every digital record of her person, from credit bureaus to the motor vehicle agencies.  For now, the thief has stopped, and she has her identity back, Jones says.

Today, she carries with her a "golden file," which includes copies of her birth certificate, her court documents, letters from her lawyer and other paperwork she needs to prove she is who she claims.

"I am still me. But I still have to prove I am me," she said.

Jones was just one of the half million identity theft victims who have filed complaints with the Federal Trade Commission in the past four years, indicating they have a digital imposter.  For the fourth straight year, identity theft is the top consumer complaint, the FTC said Thursday - with 214,000 consumers saying they were hit with the crime in the past year, an increase of 33 percent over 2002. Another 301,000 reports were filed in 2003 dealing with all manner of consumer fraud -- more than half of them Internet-related. 

In all, consumers told the FTC they lost $437 million to con artists last year. The average Internet fraud victim reported losing about $200.

Jones figures her two-year fight with her imposter has cost her much more than that, at least several thousand dollars, just in legal fees.  And last year, she was ordered to pay a $300 fine by a judge who wasn't interested in her identity theft story during a court appearance related to an outstanding warrant for her arrest.

"You are here, you pay the fine," she says the judge told her. She paid the fine at the time, rather than face the legal expense of challenging it, which would have been higher.

"Her story is frightening, but all too common," said Chuck Harwood, the FTC's Northwest Regional Office director.

Jones was the human face at a press conference held in Seattle by the Federal Trade Commission, which is trying to drum up support for its nationwide Consumer Sentinel database.  Law enforcement agencies from around the country can tap into the database and look for patterns of crime, often the best way to catch identity thieves and other con artists.

Launched four years ago, the database now has a log of 1.5 million consumer complaints, 500,000 of them related to identity theft.  The prompt publication of annual fraud statistics also helps get attention to the digital crimes. Some 900 law enforcement agencies, ranging from local police departments to the U.S. Postal Inspection Service, regularly tap into the database. Still, that's only a fraction of the 20,000 or so agencies that are eligible to become part of the Sentinel network. In 2002, a General Accounting Office report on identity theft said broad participation in Consumer Sentinel was the best way to fight the crime.

Another Seattle-area victim, Mary Hale, described falling for a telemarketers pitch that she had been awarded $300 by a court order.  She shared her bank account information with the telemarketer, and eventually lost nearly $800, and her account was overdrawn. When her December Social Security check arrived, the bank deducted $300 to cover the difference, she said.

"I didn't have any Christmas," she said.

Consumers from the Seattle metropolitan area are frequent contributors to the database, said the FTC's Harwood.  The region was second only to Washington D.C. in the number of complaints filed last year.

"People in this area are very tech-savvy," he said. It's not clear if they are victimized more often than people in other parts of the country, or they are just more likely to report their crime to the FTC, he said. 

Other commonly-reported frauds include: Internet auctions, which represented 15 percent of the complaints; shop-at-home/catalog sales, at 9 percent, and Internet services and computer complaints at 6 percent.

San Diego, Calif. had the third-highest per capita rate of consumer fraud reports.   Phoenix, Los Angeles/Long Beach Calif., and Riverside/San Bernadino, Calif., residents filed the most IF theft reports, on a per capita basis.