In the past five years, more than 27 million Americans have been victims of identify theft, according to the Federal Trade Commission.
The problem is growing. In a 2003 study, the FTC estimated that 10 million Americans were victimized in the previous year. Each victim lost an average of $500 and wasted 30 hours to sort out the situation. That adds up to out-of-pocket losses of $5 billion, and 300 million hours. The cost to businesses and financial institutions is much higher. Their losses from identity theft totaled $48 billion, according to the FTC.
Moreover, the American Bankers Association’s 2002 Check Fraud Survey revealed that attempted check fraud doubled in the past two years, and surpassed $2.2 billion.
In the most common types of cases, the perpetrators use the victims’ identities to use their existing credit cards, open new credit accounts, apply for loans, or empty their savings accounts. In nearly one in three cases, the thief is someone the victim knows. In the majority of cases, however, thieves prowl mailboxes, trash cans, the Internet, and company databases for information.
Most of the time, the criminals are based in the U.S., but that isn’t always the case. In earlier issues of Trends, we’ve analyzed the benefits and risks of offshoring. One risk that is often overlooked is that American’s personal information is being sent overseas. Workers in India, Russia, China, and Eastern Europe now process U.S. citizens’ income tax returns, insurance claims, and medical bills.
All of that data is particularly vulnerable because the newest laws that guarantee the privacy of consumer and medical information do not extend to offshoring firms. Public Citizen, a public interest group, has asked the federal government to prohibit companies from giving foreigners access to information that is protected within the U.S. but not in the other country.
Even in the U.S., the workplace exposes personal information to identity thieves. Pay stubs offer thieves access to employees’ social security numbers, income, and bank account numbers if they have direct deposit. Expense reports can reveal the employee’s credit card number and driver’s license number on a car rental agreement.
Not long ago, an employee of Ligand Pharmaceuticals found a box of personnel ...
