This article incorrectly said that the company Identity Theft 911 is based in San Francisco. It is based in Scottsdale, Ariz.
Identity Theft Gets Personal
When a Debit Card Number Is Stolen, America's New Crime Wave Hits Home
Sunday, January 13, 2008; Page F01
It had been a pleasant Saturday afternoon until I got the dreadful cellphone call. The woman on the other end said she was from Bank of America. I immediately thought she was going to offer me another credit card. I told her I was busy.
Wait, she said. Are you at a Pacers Running Store in Arlington trying to buy $812.18 worth of merchandise?
No, I said.
Someone claiming to be you is there doing just that, she told me. My heart raced. The rent was due soon -- this was not a good time for money to disappear.
Suddenly I was a personal-finance writer whose finances were a mess thanks to an identity thief.
I took solace in the fact that millions of other people have had the same sinking feeling. In fact, 8.3 million, or nearly 4 percent, of American adults were victims of identity theft in 2005, according to the latest figures from the Federal Trade Commission, which enforces identity theft laws. Of those victims, 1.8 million had accounts opened or other types of fraud committed with stolen information. The rest had their credit cards or other financial accounts hijacked.
It is one of the nation's fastest growing crimes, so pervasive that President Bush has established a task force to combat it. That group issued recommendations last year, including reducing the unnecessary use of Social Security numbers by federal agencies and creating a National Identity Theft Law Enforcement Center to help local agencies coordinate investigations. Federal lawmakers also have taken notice, introducing legislation to protect Social Security numbers.
"Unfortunately, the way things are set up today, there is way too much information available in way too many places," said Adam Levin, chairman of Identity Theft 911 and a former director of New Jersey's Division of Consumer Affairs.
Theft Trail Leads to Debit Card
While there is much the federal government can do, and much the private sector should do, I realized that there was also much that I could do to better protect myself. I set out to figure out how this happened and how I could keep it from happening again.
In my case, it was a debit card that was compromised. In my unsuccessful quest to keep myself debt-free, I avoid using credit cards whenever possible. So I end up using my debit card for purchases big and small. That way, I have reasoned, I am spending money I actually have. When I want to indulge in a new purse or treat a friend to dinner or buy a latte, I whip out the debit card. Apparently, that's not the wisest thing to do if you want to protect your bank account.
I also learned that if someone fraudulently uses your credit card, you are reimbursed for nearly all the money lost. That may not be so with a debit card, especially if you do not notice it right away. According to the Electronic Fund Transfer Act, your liability is capped at $50 if you notify your bank in the first two business days. After that, you could lose up to $500. If you wait 60 days, you could lose it all. "You are more protected with credit cards than debit cards," said Levin, whose San Francisco company specializes in identity-theft prevention and consumer education.
Luckily, Bank of America seemed willing to work with me. During that initial, alarming phone call, the employee put me on hold while she talked to the Pacers Running Store merchant. The store clerk had grown suspicious when a woman showed up to pick up a phone order and could not produce the debit card. The clerk called my bank.