Identity Theft

“Identity Theft Has Exploded” – A Government Review

By Catherine Hubbard
CCH Washington Staff Writer

Everyone’s mailbox, whether personal or business, is usually packed with stacks of these offers. Some are solicited, but most are not. And while these extensions of credit from financial service agencies, credit card companies and banks certainly can be annoying, they are definitely dangerous–to your financial health.

The reason is identity theft, which is increasing rapidly, according to Michael DeLuca, chief of data analysis at the Department of Treasury’s Financial Crimes Enforcement Network (FinCEN). And the overflow of these offers is creating new opportunities for criminals.

DeLuca has reviewed recent trends in Suspicious Activity Report (SAR) filings and found that “identity theft in the last year has exploded on the scene as a topic of interest” for law enforcement officials. He noted that South Dakota’s filings have increased 500 percent this year alone. DeLuca spoke at a recent meeting of the American Bar Association in Washington, D.C.

Government reports indicate that identity theft has increased mostly due to criminal use of credit and debit cards, counterfeit checks, and credit card convenience checks, said DeLuca, noting a dramatic rise in the latter. “These checks that we all get in the mail and a lot of us throw away” are being used more and more by identity thieves, he said, also recommending that people carefully shred any such offers received in the mail before disposing of them.

According to a recent SAR review through September of 2002, filings increased from roughly 80,000 in 1997 to an estimated 260,000 this year, DeLuca said. The top 10 states filing SARs include: California, New York, Florida, Texas, Illinois, Arizona, New Jersey, Pennsylvania, Michigan, and Connecticut, according to the review. “These top ten states make up over 65 percent of all the SARs filed to date,” he said.

The growing problem of identity theft seems to reflect a larger trend in financial criminal behavior: Traditional crimes are becoming less common as changing technology and other influences allow greater opportunities for new types of suspicious activities.

“We have seen a drop in some violations and literally an explosion in others,” said DeLuca, noting that, while identity theft is on the rise, reports of bribery have decreased. Computer intrusion has been increasing, with a total of 11,000 SARs that mention that activity since June 2000, he said. In addition, wire transfer fraud “has had a big jump.”

SARs that mention terrorism increased from only 42 before September 10, 1991, to 446 in October 2001, DeLuca said. However, mentions of terrorism have decreased over the last several months, he added. The primary activities reported were wire transfer use, excessive use of automated teller machines and large cash transactions, he said.