It can take many years to establish a good credit history in the United States. American businesses have built a sophisticated system of determining a person's credit rating, writes Carol Power
This is then used to determine eligibility for loans or mortgages. Prospective landlords and employers often pay for credit reports in order to determine the credit worthiness of potential tenants or employees.
A credit rating is tied directly to a social security number, a unique number issued by the federal government to each US citizen or alien working legally in the US (much like the Irish Personal Public Service or PPS number).
Ironically, your social security number is one of the most widely requested pieces of information and is required on almost every form from a job application to an application form for your local video rental store.
Identity theft, a crime in which someone uses your social security number, personal information and good credit history to open credit card or loan accounts in your name, was one of the fastest-growing crimes in the US last year, according to the Federal Trade Commission.
An estimated 500,000 to 700,000 Americans each year have their identities stolen. The average identity theft is for about $18,000 (€18,220) and the length of time it takes an individual to recover his identity is often between 18 months and two years. In some cases of identity theft, peoples' homes have been re-mortgaged by thieves arranging fraudulent transactions and pocketing the proceeds.
According to a recent article in the New York Times, two men called Bobby William Byrd and Sylvester Murray engaged in identity theft of the lowest form. Charges filed by the United States attorney said they and others assumed the identities of elderly homeowners who owned their homes outright, took out mortgages on these houses in the metropolitan Detroit area and cashed the mortgage cheques. Because identity theft carries only a three-year maximum sentence, the authorities in Detroit have charged Mr Byrd and Mr Murray with bank fraud, which carries a 30-year maximum penalty.
So serious has the situation of identity theft become that the federal, state and local authorities have set up an identity theft task force. It has photographs of identity theft suspects on file, which helped to identify some of those engaged in the home sale scheme. The task force also examines cases of stock fraud and credit card fraud that are carried out using stolen identity information.
In April, the Attorney General, Mr John Ashcroft, initiated a nationwide law enforcement sweep against identity theft. As a result of that sweep, 73 criminal prosecutions were brought against 135 individuals in 24 districts and United States attorneys have begun 25 prosecutions for identity theft crimes.
One defendant is charged with selling social security numbers on eBay. One hospital employee allegedly stole the identities of 393 hospital patients to obtain credit cards using false identities. Another individual is charged with stealing the identity of a company executive and selling 176,000 of that executive's stock shares. The Attorney General wants to make identity theft a federal crime, which would add two years to each sentence.
Often thieves call one of the three main credit bureaux - Equifax, Experian and Transunion - and pretend to be a prospective employer, landlord or lender and ask for credit information. In May, Ford Motor Company, warned 13,000 people to be aware of identity theft after it found hackers had posed as employees to gain access to personal consumer credit reports from Experian.
This month, a federal district judge in Manhattan sentenced a man to eight years for an identity fraud scheme in which he defrauded jewellers and corporate executives out of $730,000 worth of diamonds and Rolex watches. According to an article in the New York Times, James Rinaldo Jackson, the defendant, said he found the names of corporate executives in Who's Who in America and paid from $50 to $100 to buy their social security numbers from internet information brokers.
Social security numbers and driver's licences can be bought from at least 12 sites on the internet for about $15. He also fraudulently obtained their credit card numbers and other personal data and impersonated his victims on the telephone to buy the jewels and watches. The judge ordered Mr Jackson to pay $376,704 in restitution.
If you're unlucky enough to find yourself a victim of identity theft, you're not liable for the money but you are responsible for getting rid of the fraudulent accounts and restoring your credit. The Massachusetts Public Interest Research Group estimates that each victim, on average, spends 175 hours and about $800 to clear their name.
carolpower@ireland.com
