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FTC Says Identity Theft Is Rampant
10 Million Cases In the Past Year, Survey Concludes


_____On The Web_____
Press Release: FTC Releases Survey of Identity Theft in U.S. 27.3 Million Victims in Past 5 Years, Billions in Losses for Businesses and Consumers (Sept. 2, 2003)
Full Text of Report: Overview of the Identity Theft Program (PDF)
FTC ID Theft Page
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By Caroline E. Mayer
Washington Post Staff Writer
Thursday, September 4, 2003; Page E05

Nearly 10 million people in the United States were victims of identity theft in the past year, crimes that took a total of 300 million hours to correct and cost people a total of $5 billion, the Federal Trade Commission concluded in a report issued yesterday.

In the first federal survey that tried to measure the extent of the problem, the FTC estimated that 27.3 million people have, in the past five years, had their personal information, such as credit card account numbers or Social Security numbers, misused to fraudulently buy products or establish credit for another person. More than a third of them, or 9.9 million, had such experiences in the past year, the FTC said. Such fraud, the report said, cost businesses $47.6 billion, or $4,800 per victim; for individuals, losses and expenses incurred to correct problems averaged $500.

J. Howard Beales, director of the commission's Consumer Protection Bureau, called identity theft a "crime of the times" and said the survey showed a significant increase in the past three years.

Previously, government statistics on identity theft were limited, such as the 400,000 consumer complaints filed with the FTC since the fall of 1999. "For the first time, we think we know how big" the problem is, Beales said. The numbers, he added, "are considerably higher than I expected."

The FTC's findings were based on a random telephone survey of 4,057 adults, taken in March and April. Beales said the agency surveyed a large group because "we were afraid we'd have a hard time finding victims. Unfortunately that was not the case."

The survey found that 4.6 percent of respondents said they were identity-theft victims in the past year; a response rate that, applied to the entire U.S. adult population, translates into 9.9 million victims. Using such extrapolation, the FTC report concluded that there were 6.9 million identity-theft victims nationwide two years ago; 3.4 million the year before that.

The biggest problem last year, the survey found, involved misuse of existing accounts, such as unauthorized charges on credit cards or telephone bills. Of those surveyed, 3.1 percent, said they were such victims. The survey said such fraud cost businesses an average $2,100 per victim, while victims' losses averaged $160.

Fewer respondents -- 1.5 percent said new accounts were fraudulently created in their name. The cost of that form of identity theft was significantly higher: Businesses lost $10,200 per victim, and each victim lost an average $1,180, the report concluded.

Yesterday, consumer advocates said Bush administration proposals to limit identity theft, including stricter penalties for offenders and tighter regulations for financial institutions, did not go far enough, given the large number of victims. The FTC and Congress "need to go the core of the problem and penalize credit grantors" for extending unauthorized credit, said privacy consultant Robert Gellman.

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