New York Times

  • New York Times Sunday Magazine – free registration required Dumpster-Diving for Your Identity. The Federal Trade Commission estimates that identity theft costs nearly $53 billion annually. Some seven million people were victimized in 2002. Yet little is known about how the perpetrators actually operate. It's a popular perception that most identity theft happens on the Internet, but over the course of dinner, Massey quickly made clear that low-tech methods of getting people's personal information are far more effective. ''Every day was exciting,'' he recalled between mouthfuls of potato skins. ''We went to Vegas, Atlantic City. We made a business of it. It was like James Bond . . . 'Mission: Impossible.'''

    In late October, Massey disappeared, violating the terms of his supervised release and prompting a national warrant for his arrest. It had become clear to me in five months of interviews that not everything he said was to be trusted, although much of it was verified by the detectives and prosecutors who had already investigated his crimes and by Kari Melton. As for Massey's current whereabouts, Steve Williams, a detective in the Eugene Police Department, who worked on the first case against Massey and is once again on his trail, said: ''My gut feeling is that he is in the Seattle area'' — where he has family — ''back to his old tricks, doing drugs, identity theft and counterfeit checks.''

    If Massey has indeed resumed operations, it's a sure thing that he's not working alone. His identity-theft crimes depended on the work of a carefully built ring, one that employed hordes of petty thieves and drug addicts. If he sticks to his old techniques, his crimes will originate in Dumpsters and garbage cans, where information can be culled from discarded personnel files and other trash. It's not the most glamorous crime, but that doesn't make it any less devastating to its victims.

    [ … ]

    ''It was the first time I had ever been to the dump,'' Massey recalled, wrinkling his nose. ''I said, 'I'm not going to get dirty,' so I wandered over to a shed where the recycling was stored. I notice there's a big barrel for recycled paper that's full of discarded tax forms from an accounting firm.'' Each form had the person's name, date of birth, Social Security number — all the information necessary for taking out a line of credit.

    ''The wheels started turning in my head,'' Massey said, smiling. ''The guys profiled here were pulling in $800,000 a year. So I told the tweakers to get all this stuff in the truck. Now! I said, 'This is worth five million right here.'''

    [ … ]

    Some identity thieves do go straight to the Internet, hacking into databases or using ''phisher sites'' — phony Web pages that mimic real banking and e-commerce sites in order to entice victims to hand over sensitive information. But those cases remain the exception, not the rule. For the most part, obtaining dates of birth and Social Security numbers still begins off line, and often in the trash.

    [ … ]

    The schemes developed by Massey and Melton did not initially have a name. Existing federal legislation addressed only the fraudulent creation, use and transfer of identification documents, not the theft and criminal use of the underlying personal information, particularly Social Security numbers and dates of birth. That changed on Oct. 30, 1998, with the enactment of the federal Identity Theft and Assumption Deterrence Act. The new law gave prosecutors better tools to prosecute everything from check forgery to the misuse of someone's credit card to the kind of scams perpetrated by Massey and Melton. The law, like similar legislation passed by several states around the same time, gave a common label — ''identity theft'' — to a constellation of crimes previously prosecuted under different names.

    [ … ]

    But the class of crimes committed by Massey and Melton are far more devastating than garden-variety identity theft. If someone steals a credit-card number and racks up charges, the card is canceled, and the victim walks away chastened but unscathed. But if the identity thief borrows the victim's Social Security number and obtains credit in the victim's name without his knowledge, that's another matter altogether. In many cases, these victims don't realize someone has preyed on their credit until the thief has bled them dry. According to a Federal Trade Commission report released in September, it takes 26 percent of victims between one and five months to realize the imposture; another 12 percent do not learn for at least six months, if not longer. By that time, the damage to a person's credit can be complete.

    Worse, even if the victim or the credit-card companies figure out that an identity thief has taken out an illegal card or loan, and cancel the fraudulent account, the identity thief is rarely apprehended. ''The banks never come after you — they just stop the card,'' Melton (ed. emphasis added) explained. ''No federal investigators. You just throw away the card and know not to do that bank again.''

    [ … ]

    How bad, then, is the problem? Avivah Litan is pessimistic. An analyst with Gartner Inc., a research company that advises financial institutions on security issues, Litan speculated that fewer than 1 in 700 acts of identity theft end with the conviction of the offender. It may be worse: ''People in the industry whom I've talked to have said it's more on the level of one out of a thousand.'' Identity theft, she lamented, ''is a very lucrative, low-risk crime.''  [Privacy Digest]

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