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SPENCER MICHELS: Tracey Thomas, a 32-year-old computer programmer from Berkeley, California, had her identity stolen two years ago. She had gone to the hospital emergency room and presented her insurance card, which contained her Social Security number, to the admitting clerk.
TRACEY THOMAS, Identity Theft Victim: Her name is very similar to my name, and her age is very similar to my age. So, you know, when I presented my insurance information, she just stole it, wrote it down and made off with it.
SPENCER MICHELS: Thomas, who has since become an advocate for identity theft victims, discovered her loss several months later, but it was too late. Her imposter had opened charge accounts in Thomas’ name and didn’t pay the bills, ruining Thomas’ credit.
TRACEY THOMAS: I was prevented from buying a house. I had… my finances were destroyed, I could not get credit in my own name because of all the fraud that was on my credit report.
JAMES COMEY, U.S. Attorney: We are determined to find those criminals who are using this information to rip off the consumers.
SPENCER MICHELS: The Justice Department says 700,000 Americans were victims of identity theft in 2001, some in big scams like that perpetrated by Phillip Cummings. He was arrested in New York in November, and charged with illegally downloading private information on 30,000 people from credit bureaus, using passwords he obtained in his job. All the 9/11 hijackers had false identities, though they used them for terrorism and not for personal profit. Their attacks heightened public awareness of the problem. Identity theft occurs when someone takes pieces of someone else’s identifying information– like a driver’s license or Social Security card number– and in most cases uses it to make money or order goods. Although victims are not responsible for paying off fraudulent credit card bills over $50, the costs in time and worry are vast.
TRACEY THOMAS: It takes an enormous amount of time, headache, trial, tribulation. It’s very difficult to clear all those frauds off of your credit report. All of this was the research that I did when I was investigating this crime.
SPENCER MICHELS: Victims spend an average of nearly two years clearing up their credit. Thomas invested months investigating her own case, and she finally tracked down the woman who stole her identity. The woman was arrested and convicted.
SPENCER MICHELS: The district attorney in San Francisco uses this book of fake driver’s licenses, all manufactured by the same criminal, to illustrate how one thief can steal the identity of somebody else and use it to cash checks. Assistant D.A. Jerry Coleman:
JERRY COLEMAN: The same guy, but different licenses from all around the country. Here’s Florida and Colorado. And for each of the driver’s licenses he’s got, he’s got checks to go with it that he cashes for small amounts of money. But on one given day he can get hundreds and hundreds of dollars from these check cashing companies.
SPENCER MICHELS: Coleman himself was an identity theft victim.
JERRY COLEMAN: Curiously, my case was a dirty desk clerk at a hotel in San Jose where I was giving a lecture to cops on identity theft, who ripped me off by skimming– that’s… that’s a huge form of identity theft, skimming– all the information off the back of my credit card, the magnetic stripe on my credit card, onto a hotel room key, and then he sold the room keys along with the credit card numbers that he got by imprinting the card to a bunch of his druggie buddies in the South Bay.
SPOKESMAN: Well, your honor, I believe we have a proposed…
SPENCER MICHELS: In Superior Court, Coleman has prosecuted many cases of ID theft, including recently that of a 34-year-old drug user and his female codefendant.
JERRY COLEMAN: He had in his possession five different forms of both stolen and counterfeit ID’s– driver’s licenses, many of them; credit cards; checks; Social Security cards, and passports.
SPENCER MICHELS: The DA worked out a deal with the public defender, who addressed the judge.
SPOKESMAN: He wants to enter pleas of “guilty” to the charges of conspiracy to commit identity theft.
SPENCER MICHELS: The defendant agreed to an interview in the county jail on condition that his personal identity was protected.
SPOKESMAN: I’ve always had a thing for a second ID; I’ve had collections of them over the years.
SPENCER MICHELS: How did you learn how to make them and how did that progress?
SPOKESMAN: You just… making them… making them’s easy. Anybody… you know, any good art student can make an ID I call it magic. Myself, you know, it does take, you know, some people have a knack, and some don’t.
SPENCER MICHELS: He got much of the private ID Information he used in garbage dumpsters.
SPOKESMAN: You find the garbage somewhere and sift through it. I’ve seen a signature card with an account, the account holder, the account number, the amount of money in the account, where the business is located, their taxpayer ID number for the business.
SPENCER MICHELS: And this was all in the garbage.
SPOKESMAN: This was all on one sheet of paper.
SPENCER MICHELS: That was in the garbage.
SPOKESMAN: That was in the garbage at the bank.
SPENCER MICHELS: He and other identity thieves would use computers, scanners and printers to concoct new identities and fraudulent checks, which, he says, banks accept without much scrutiny.
SPOKESMAN: There’s not a bank in the world that’s going to want to throw one of their clients in jail. And if they look at that piece of paper, and it all matches up, then they’re basically obligated to pay you. And there are certain limits that they… each bank has, some’s $500, some’s $800, you know, at the teller, which means no manager approval required.
SPENCER MICHELS: San Francisco fraud detail inspector Earl Wismer says crimes like that keep police phone lines busy with complaining consumers.
EARL WISMER: Well, that scenario happens probably around 50, 60 times every single day. We have a limited amount of resources, a limited amount of personnel. In the identity theft arena itself, we are unable to assign most of the cases.
SPENCER MICHELS: While police departments often can’t keep up, law enforcement criticizes many banks, credit card companies and credit reporting services for offering easy credit and not cracking down harder on identity theft.
JERRY COLEMAN: Many businesses feel that it’s a lot easier to us to get credit out there to people and get money from the 98 percent of the people who are willing to pay money over time and bear the cost of the 2 percent who are committing crimes.
SPENCER MICHELS: Banks disagree. Anissa Yates is Vice President of the California Bankers Association.
ANLISSA YATES, California Bankers Association: Identity theft is a very high priority in the banking industry. Our financial institutions, our member banks, we loose billions of dollars a year because of identity theft, and that is not an acceptable loss for us. We would like to see this eradicated.
SPENCER MICHELS: Still, banks, which issue most credit cards, say they want the freedom to solicit new business by sending out pre- approved credit card applications, even though thieves can get a hold of them.
ANLISSA YATES: Identity theft is a crime. Stealing this information is a crime. Offering somebody credit is not a crime.
SPENCER MICHELS: In the past few years, most states and the federal government have passed laws criminalizing identity theft. Now, the California legislature is considering a bill by State Senator Jackie Speier that would make it harder for financial institutions to share or sell private financial information about clients. Speier says protecting privacy would reduce identity theft.
JACKIE SPEIER: It just makes common sense. If more people have access to this information… and this is not just your name and your address, this is your Social Security number, this is your credit card number, your balances on your accounts, they have all that information. They can recreate your identity. And they can take that identity and use it to run up big bills.
SPENCER MICHELS: Banks and credit companies have strongly opposed the privacy bill, arguing that it is an infringement on the right to market their services. And, says Fred Main of the California Chamber of Commerce, the bill would not reduce identity theft.
FRED MAIN, California Chamber of Commerce: We don’t think that that’s a bad thing that you’re being marketed to. It’s not what leads to identity theft. Identity theft leads to criminals stealing things, even inside criminals stealing information that whether you have this bill passed or not, will still occur.
SPENCER MICHELS: But experts say consumers can take certain precautions: Shred or burn financial records and advertisements for credit, monitor personal credit reports twice a year, avoid giving out Social Security numbers when possible. While Tracey Thomas endorses those safety measures and others, she says her imposter has made her a permanent victim.
TRACEY THOMAS: It’s not over. It’s never going to be over. She still has my information. She could have sold it, she could have given it away; you know, a million other people that I’ve done business with have my Social Security number. This could happen again. There’s no way I can protect myself against this.
SPENCER MICHELS: Still, Congress and some states are considering increasing penalties and otherwise toughening the laws against identity theft.