Attorney General asks Legislature to enact several measures to prevent identity theft and help consumers remedy the situation if someone has improperly used credit card or bank account numbers, PIN codes or other personal information.
Des Moines-- Attorney General Tom Miller today asked the incoming General Assembly to take several steps to help consumers avoid the growing problem of "identity theft" -- and help consumers remedy the situation if they are victims.
Miller said identity theft occurs when someone obtains and uses another's important personal information such as credit card numbers, PIN numbers, social security numbers, or bank accounts.
"It's a growing problem, and it sure can ruin your day if you're a victim," Miller said. "Actually, consumers tell us it usually takes many months of work to set things right again."
Miller presented draft legislation that would make identity theft a crime, provide civil penalties for perpetrators, allow consumers to block information on credit reports if police reports document it resulted from identity theft, and require businesses to examine three forms of identification before they offer "instant credit."
"This package will deter some identity thieves and make it a little easier for victims to correct the situation, but consumers still need to be on the ball to protect themselves," Miller said.
"There has been an explosion of opportunities for identity thieves," he said, citing the proliferation of PIN numbers, credit card offers in the mail, and ATM and Internet transactions.
Miller said identity thieves obtain information in many ways, from "shoulder surfing" (spying someone's PIN entry at an ATM or telephone), to taking key information off of checks, to opening an account based on someone else's credit card solicitation -- which the recipient might have discarded as "junk mail."
"Identity thieves don't always drain money out of people's existing accounts," Miller said. "They might use the information to set up their own new account, or secure deposits on cars or housing, or even to rob retirement earnings. This may not be a direct theft under existing law, but it sure can cause a mountain of work for the consumer to set it right if it spoils or tangles up their credit record. That's why we propose that the identity theft itself should be a crime."
Miller said the Consumer Protection Division started logging identity theft calls and letters this year. From January to November, the Division received 44 complaints and 284 inquiries. In his book "Scam School," Chuck Whitlock estimated that a thousand people a day in the U.S. are victims of identity theft. U.S. News & World Report said that victims and institutions lost $745 million to the problem in 1997, compared to $442 million in 1995.
The Division published two consumer education booklets last year on the topic: "How to Avoid Identity Theft" and "A Guide for Victims of Identity Theft." Both are available at the Attorney General's Office or its web site: www.state.ia.us/government/ag. (Click on "consumer brochures," then identity theft.)
Miller suggested several tips to avoid becoming a victim of identity theft:
Do not give your credit card number or other personal information over the phone unless you initiate the call and know you can trust the business.
Tear up papers with personal information, such as billing statements and mail solicitations for credit cards. Always take or destroy ATM and credit card receipts.
Consider removing extra information from checks, such as social security number, date of birth and address, since checks easily can be lost or stolen.
Do not carry PIN numbers or passwords -- memorize them -- and try not to carry extra credit cards, SSN, or other key information unless necessary.
Study your credit card bill every month to catch any unauthorized charges.
If you do have a problem, prepare to work hard to set it right by contacting credit reporting agencies and taking other steps. See the Attorney General's detailed booklet on how to remedy identity theft.
Details on proposed legislation:
1. Make identity theft an aggravated misdemeanor if the value of the credit, property, or services is less than $1000, and a Class "D" felony if more than $1000.
2. Provide a civil penalty of $1000 or three times actual damages against a person convicted of identity theft. Give the victim a civil cause of action and give the Attorney General enforcement authority.
3. Give consumers the right to block information placed on their credit reports as a result of identity theft, if the consumer files a valid police report.
4. Require entities that take credit applications in person to examine three forms of identification before they extend "instant credit."