Identity Theft: Following the Profits and Victims

web browsingWe know identity theft is a billion dollar business conducted by criminal enterprises. These are NOT mom-and-pop operations! So we must take it seriously. What happens with the money stolen/scammed? And who are the victims and what do we know about their plight?

Here’s what the experts at the 2nd Annual Government Identity Theft Conference shared about where the money goes:

Proceeds from ID theft generally go to five other criminal activities:

  1. Purchase of guns, both for general criminal activity and for use by terrorists.
  2. Purchase of drugs for resale. This is seed money that keeps fueling this country’s opioid epidemic.
  3. Money laundering. This is a very effective method of moving money around and launder drug money into legitimate-looking proceeds.
  4. Sadly, supporting human trafficking. Often of children.
  5. Support of global terrorism. Stolen credit cards are used to obtain cash to keep terrorism networks funded, both operationally (for guns, training, bomb materials, etc.) as well as providing terrorists with paychecks.

What are we seeing?

  1. There is a new victim of identity theft every 9 seconds (ITRC).
  2. In 2016 an estimated 4 million people were hit with some kind of ID theft (Javelin Strategy & Research), about 1 in 16 US adults.
  3. Data breaches have provided criminals with a wealth of available, REAL identities. The FBI reports a real identity can be had via the dark web for only $.35! A Bulgarian crook noted (when caught), “We have years of data to use yet.”

What do victims face?

With more than 15 million victims in 2016, the pain of recovery was significant, and a significant drain on people and our economy. It’s both a physical/economic pain as well as an emotional pain.

It always impacts the victim’s credit history. Always. Yes, it can be fixed, but that takes time and much effort. Along the way, here are some of the things that can happen:

  1. Until you get it fixed, your credit cards are canceled and must be reissued. And your credit rating is wrecked.
  2. Job applicants can have difficulty landing a job if their credit report looks bad.
  3. Insurance rates can go up.
  4. Your tax records can be affected causing you to be billed by the IRS or state tax authorities (fraudulent filings with your identity steal your refunds).
  5. Your tax refund itself can be delayed.
  6. Social Security credits and payments can be affected.
  7. If a stolen ID is used in a criminal activity, you could end up with a legal problem, even arrest.
  8. If your medical records have been stolen or manipulated for the purpose of fraudulent medical insurance claims, your health care could be impacted, even your health could be impacted.
  9. And, your emotional well-being will almost certainly be affected. Most victims experience emotional challenges such as depression.

Victims can fix all of this, but it takes time. How long? The FTC, which tracks such statistics, notes that time to recover is dependent upon the severity of the theft, but estimates that recovering takes an average of six months and at least 200 hours of work! However, a 2016 Identity Theft Resource Center survey of victims in 2015 notes that only 27.9% of victims achieved resolution in six months and the rest took as long as 5 years.

If you are or become an ID Theft victim, there is help available. Start with two organizations:

  1. The Identity Theft Resource Center,
  2. US Department of Justice Office of Victims of Crime,

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