How Lenders Overlook the Warning Signs of ID Theft

Despite all the new fraud alert tools and increased awareness of the perils of identity theft, incidence of the crime remains at 2003 levels, with about 10 million Americans falling victim every year. ID theft experts and politicians blame the easy availability of personal data like Social Security numbers. But there may be a simpler reason for the persistence of ID theft: lenders are too willing to extend credit to just about anybody, even when there are big red flags that indicate fraud. That's a thesis presented by a University of California, Berkeley lecturer, Chris Jay Hoofnagle, in a new report: "Internalizing Identity Theft.” Using a 2003 amendment to the Fair Credit Reporting Act that allows victims of ID theft to ask creditors for the fraudulent applications submitted in their names, Mr. Hoofnagle worked with a small sample of six ID theft victims and delved into how they were defrauded. Posted in: Account Takeover Identity Theft