- The Washington Times - Thursday, December 13, 2001

Credit-card issuers and consumer groups are working to educate Americans about fraud and the theft of personal identification, as consumers whip out their plastic and checkbooks to buy gifts for the holidays.
"Certainly at this time of year people are doing to be spending more, they are going to be asked to show identification, they are writing checks, using credit cards," said John Byrne, senior counsel for the American Bankers Association. "So it's just the time to be extra careful."
Identity theft involves using a person's information such as name, address or Social Security number, to open new credit-card or bank accounts and fraudulently use the funds. Other types of identity theft include the fraudulent use of a person's checks or withdrawing money from a bank account.
The number of incidences of the crime has been rising steadily, according to the Federal Trade Commission, which set up a data clearinghouse in November 1999 to track identity-theft cases. The agency processed more than 40,000 calls in its first year. The number of calls had risen to nearly 100,000 as of June 30, indicating that the number of complaints doubled in just half of the year.
"Fraud in general is on the rise," Mr. Byrne said. "And at this time of year, criminals like to take advantage of the fact that people are harried and trying to do many things at once."
The bankers group sends out educational brochures on the subject. Hints on avoiding fraud include instructing shoppers not to give out personal data in a store and checking out a retailer before giving out billing information while shopping online.
Most credit-card companies offer protection tips through mailings or their Web sites.
American Express, for instance, advises its customers to review their credit reports regularly. The card issuer has its own protection service tracking such information for consumers.
Visa, which also offers protection tips, started on Dec. 3 an identity-verification process for its customers to use when they shop online.
The system enables card issuers to validate a cardholder's identity by creating a password that only the consumer and the creditor know. The card issuer requires the consumer to enter the password when he is about to complete an online purchase.
"Consumers have very little control over who has access to their personal identifiers," said Stacey Pinkerd,senior vice president of Consumer Solutions at Visa. "Their Social Security number in conjunction of other personal identifiers are used all the time for the granting of credit … or just about anything."
Some identity-theft cases are high profile, such as a Biloxi, Miss., woman who was convicted of not delivering Beanie Babies she sold on the Internet. She is now accused of stalking and stealing the identity of the investigator who helped send her to prison.
Being the victim of fraud is a hassle, said Nicola Straker, who still isn't sure how to deal with having her identity stolen.
Two months ago she gave a salesman at a suburban Maryland car dealership a $100 check, for a friend's car deposit.
Five weeks later, Miss Straker paid her $75 Sprint cell-phone bill over the phone. She checked her bank account online several days later, and saw that a check for that amount had cleared, although it was a later check number. She didn't think much of it as the amount matched, assuming Sprint typed in the wrong check number.
But then Miss Straker got a call from Sprint saying her check had bounced.
She immediately called her bank to investigate, and discovered that the dealership manager, to whom she had given the $100 check, had used her information to pay his own Sprint account.
"What's scary about this is that I spoke with the bank and they said, 'We do hundreds of checks and we can't read the name, just the routing number,'" Miss Straker said.
The car salesman told her he used her account by mistake. She called Sprint, and the company disconnected the salesman's phone.
Miss Straker also called the owner of the car dealership. He asked her to identify the salesman, but she wouldn't tell him because she didn't want the salesman to leave his job before she talked to the police and filed charges against him.
She also discovered that the salesman had forged the check she gave him, by changing the amount to $575 from $100. The bank returned the check.
Miss Straker said she is talking to the police and likely will file charges soon.
The growth of the Internet has "created fertile ground for fraud," Eileen Harrington, associate director of the Division of Marketing Practices at the FTC told lawmakers at a congressional hearing in May.
"Fraud operators are always among the first to appreciate the potential of a new technology to exploit and deceive consumers," Miss Harrington said.
More than 25,000 complaints about Internet fraud were reported to the FTC last year, compared with about 1,000 registered in 1997 when the agency began tracking it.
"It's relatively simple for criminals to obtain personal history information through a variety of sources, particularly through the Internet," said Brian Marr, special agent with the Secret Service.
Between 1994 and May, the FTC brought 182 Internet-related cases against 593 defendants. By May, the agency had obtained injunctions stopping the schemes and ordered more than $180 million in payment. It also had obtained orders freezing millions of dollars in cases still in litigation.
The agency's federal District Court actions have stopped $250 million in Internet scheme sales, Miss Harrington said.
Fraud cases have grown in step with online sales, which are expected reach nearly $40 billion this year. But those numbers could be growing even faster if consumers felt more comfortable shopping online, according to a recent Visa survey. About 70 percent of consumers who use the Internet told Visa that they would feel safer shopping online if they could verify their identity before completing a purchase.

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