IDENTITY THEFT VICTIM ASSISTANCE WORKSHOP - VOLUME 1
PANEL 1 - VICTIMS' PANEL
PANEL 2 - CLEARING UP THE VICTIM'S CREDIT HISTORY - PART 1 91
PANEL 3 - CLEARING UP THE VICTIM'S REDIT HISTORY - PART 2 179
FEDERAL TRADE COMMISSION
IDENTITY THEFT VICTIM ASSISTANCE WORKSHOP
OCTOBER 23, 2000
FTC HEADQUARTERS BUILDING
P R O C E E D I N G S
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MR. STEVENSON: My name is Hugh Stevenson from the FTC, thank you all very much for coming today to our workshop on identity theft. Here to welcome you is the distinguished director of the FTC's Bureau of Consumer Protection, Jodie Bernstein.
MS. BERNSTEIN: Thank you very much, Hugh. And thank all of you.
MS. BERNSTEIN: Thank you so much. Let me reciprocate by thanking all of you for coming to our workshop today. I know that it's going to be a very productive session. I will only take a few minutes to talk with you about it and then we'll get busy, because we have a very, very full agenda for both days, and we look forward to it. You may all recall that at the Treasury Summit on Identity Theft in March, we all agreed that this was a serious issue, and to further our discussion and debate toward bringing some light on this subject, we identified three issues for further scrutiny. As you all recall, I think they were prevention, prosecution and victim assistance. Our workshop today is going to focus on the latter, that is victim assistance. And to update you on the other events for a moment, the Social Security Administration will convene its workshop on prevention this Wednesday, October 25th, and that will be held across the mall at the Department of Health and Human Services. The Department of Justice, the Secret Service, will host a workshop for law enforcement on December 6th on investigation and prosecution. But the goal of today's workshop is to examine the problems victims experience with trying to restore their good name to financial health. And to explore the concrete steps we can take to make the process less burdensome. In particular, in particular, we hope to make progress on two initiatives that were raised at the Treasury Summit, and I must say have been raised in other fora as well. In fact, one of them has been incorporated into legislature proposals introduced on Capitol Hill this session, and depending on what kind of progress we all make, probably will come back again. The first is one we've come to call one-stop shop, a process by which a consumers call to any one of the three major consumer reporting agencies, or to the IDT hotline, will result in placing a fraud alert on the consumer file and all three consumer reporting agencies. The second initiative is a standard fraud declaration report identity theft activity to the bank, creditors, debt collectors or other entities involved. Rather than filling out a separate fraud packet for each of the institutions involved, the victim would fill out the standard fraud declaration once and send signed copies to each of the companies involved. Both of those issues have arisen, as I said, at the Treasury Summit, and both have been discussed in -- on Capitol Hill, and in other fora as well. I'm very optimistic and think that if we can make progress on those two issues, as we work together through these two days, we will have accomplished a great deal. Each and every one of you deserve kudos, and I would like to give them to you today, for being here with us to work through these issues. Especially the financial institutions. We know that your role in restoring a victim's good name is very complicated. And if you hear some minor criticism, not by name, but in regard to your institutions, we hope you'll take it in the spirit that it's offered, as a factual matter, and hopefully in a constructive way, we will work together to overcome any negatives of that sort. The main thing is, though, that you're here and you're indicating your willingness to work with us, and with all the groups that are involved here, and we really do thank you for that. Similarly, I would like to thank the law enforcement people who are here today, they're all stretched thin. We are, as well, but again, it's something that's necessary for all of us to work together. We haven't always in the past, and we intend to further that goal as well. The consumer advocates and private attorneys that are here today, similarly I would like to mention, again, because this involves so many different parties and so many different interests, that without the full participation of all of you, we would not make as much progress as I think we are capable of doing today. So, I know it's a sacrifice for all of you to be here to spend the time with us, but I think it will more than justify it if we achieve what we're setting out to do today. In regard to our part, as you know, we've made some progress I think internally. The Identity Theft and Assumption Deterrence Act of '98 directed the FTC to establish a decentralized victim complaint consumer service for victims. We established a consumer complaint hotline for victims of identity theft and a centralized national data clearinghouse to share the complaint information equally. And many of the -- much of the trend data and other collections will be described to you and some are in your materials today. I think that in itself should prove very helpful. As you know, we also enforce a number of consumer credit laws, some of which touch on the issues that we're involved in today, but law enforcement certainly has its place, however we are not focusing on that today, but rather on cooperative efforts to begin to resolve the number of issues that we're trying to get through. We have a number of distinguished panelists participating in the sessions today and tomorrow. Today's panels will principally focus on the inaccuracies from the victim's credit history and credit accounts. Tomorrow we will focus on other forms of identity theft. That is the hardest phrase. Maybe we need to come up with a different phrase. If anybody does, I'll give them a T-shirt that says you reconstructed identity theft and did us all a favor. Tomorrow's will be the one that the hotline is hearing with greater frequency, that is criminal records, and bankruptcy records in the victim's name. The first panel today is the victim's panel. We will begin, however, with a presentation from our data clearinghouse. Then we'll hear from the victims because that's where the workshop issues all begin. We're fortunate to have victims here today who have been willing to travel from all over the country to share their experiences with us. That first-hand experience, I think will help us better understand what actually happens to victims and what victims think could happen and could be improved in the process of clearing up their problems. Once again, thanks to all of you for coming, for participating, and with that, let's get on with the first panel, thank you very much.
MR. STEVENSON: Okay, I would ask the panelists for the first panel to come on up and take their seats and we will get started with that. As Jodie mentioned, we're starting with the victim's panel, hearing from the victims first hand what kinds of problems they have encountered here. And moderating this panel are Joanna Crane, Joanna Crane is the program manager for our identity theft program, and we're also very glad to have today as a moderator Mari Frank, who is a private attorney who is I think well known to many of you as someone who has been involved for some time in identity theft issues. Before the panel gets started, though, Joanna is going to -- before we hear from the victims here, Joanna is going to tell us in a bigger picture sense what we have heard from victims since our hotline and identity theft clearinghouse started operation back in November when we started accepting calls at 1-877-IDTHEFT, something we want to repeat a few times here, 877-IDTHEFT. And we've had the data since November, and for those in the overflow rooms, you can follow along, if you can't see on the screen with Joanna, in the book that is part of the package that you got today. Joanna?
MS. CRANE: Thank you. I just want to start my program here. I'm sorry to have to ask all of you to sort of look over your shoulders to be able to follow along with the sites that I will be discussing. They are also in, as Hugh mentioned, the report that we've included in your packet. As Hugh mentioned, we launched our identity theft data clearinghouse in November of '99, and the data that we have to show you today goes through September 30th, so that's 11 months of data. And so it's beginning to give us a fairly reliable picture of what's happening in the sort of macro sense of identity theft nationwide. Most of the folks -- I should back up. Our hotline is a consumer complaint hotline, and the data in our database is consumer complaint information, it's not from law enforcement, and so we have to understand that this is as victims understand the situation. We don't have an additional validation process to verify it. It is solely consumer complaints as we collect them. What we've learned about identity theft, though, I think is very interesting. If you look at it on a nation-wide basis, you can see that the largest number of identity theft complaints are coming from the largest states, California, New York, Texas, Florida, Illinois, and Michigan. However, when you look at it on a per capita basis, it breaks up somewhat differently. We see that the highest concentration of per capita is spread throughout the west coast, also, Florida, Maryland, District of Columbia, and -- did I say Maryland and the District of Columbia. When you look at it broken down to a city level basis, actually the highest ranking city is the District of Columbia. We didn't have it on this chart because we're thinking of it more as a state, we like to think of DC statehood, but it is also a city, and it leads all the other cities with a rate of 19.6 per 100,000, then in ranking order it would be Houston, Chicago, New York, Philadelphia and Los Angeles. When victims call us, they give us information that allows us to understand demographically what's going on. Many times they provide their age and thus far we have about 60 percent of the victims providing their age. What it shows us is the average age of consumers calling our hotline is 41 years of age. However, the most commonly reported age was 30 years, that's the mode I guess you call it. People age 65 and over, while they represent 12 percent of the U.S. population, they only represent seven percent of individuals calling our hotline. We're going to watch this relationship. We want to understand whether it means that people age 65 and older are less likely to experience identity theft or whether it means that they are simply less likely to call our hotline, whether there's an outreach effort there that we need to really focus attention on. On the other side, people age 18 and under represent 26 percent of the U.S. population, but only two percent of our victims. Well, I guess this makes sense that many of them are involved in setting up credit, so this number seems quite logical to us. What's happening to these people? What are they experiencing? Well, when you look at it purely in terms of what types of identity theft they've experienced, it's remained pretty consistent since we began collecting the data that by far and away the most common type of identity theft they've experienced is credit card fraud. Over 50 percent report that. Of that 50 percent, about three quarters are new credit cards established in your name. Only about one quarter are people accessing their current accounts and putting unauthorized charges on them. We were surprised to learn that unauthorized phone and outservices are also a very, very common form of identity theft.7 percent of the complainants report this sort of identify theft. Of this, about 40 percent is new phone service, about 5 percent is new wireless service, and about 13 percent is new utility service. So, between phone and wireless, there isn't a great deal of difference, and in general, this is new service, not people tapping into the existing service. We see that bank fraud comes in third at 17 percent, with about 50 percent affecting the existing accounts of the victims, about 35 percent would be new accounts of the victims, and another 20 percent would be electronic fund transfer activity. Fraudulent loans provides about 11 percent of the identity theft that we care about -- well, 11 percent of the victims who report to us report on fraudulent loans. I should back up and say most of our victims have experienced more than one type of fraud, so if you total over 100 percent, because we're going to get people reporting to various categories. With fraudulent loans, it's about 50 percent business and personal, about 30 percent auto loans and about 10 percent real estate and mortgage type activity. About eight percent of the people complain or let us know that a government document or benefit was forged or obtained in their name. Most often this is a driver's license. About 55 percent of the complainants let us know that someone either forged or obtained a driver's license in their name. About 13 percent report that a social security card was forged or issued and used in their name. About 12 percent report that someone has filed a fraudulent tax return in their name, which is enormously complicated to undo, I should say. Other types of identity theft that you see there, 20 percent of the people who are letting us know that identity theft doesn't fall into one of our major categories, complain that someone has undertaken employment in their name. There are consequences such as tax consequences and social security consequences associated with that victim. Eleven percent of our complainants tell us that someone has committed a criminal act and there is now a false criminal record in their name. About eight percent of the complainants let us know that people have claimed emergency type medical services in their name and have left them with a bill to pay. What do I know about what happened to them? About 60 percent of the callers know something about the suspect, they have either gotten bills or they may, in fact, know the suspect. So, 60 percent are able to provide some information about the suspect. However, only 14 percent can readily identify the suspect as someone with whom they had a relationship. In 86 percent of the cases, they only know through some sort of document trail something about the suspect, and that, of course, is the vast majority. If they do have information on the suspect, how often do they have a relationship? Well, again, 188 percent of those, there was no relationship, but where there is a relationship, it's most often with a family member, or someone with whom they've been very close in the past. It can also be workplace acquaintance or neighbor. But again, those are fairly small numbers. Where do the suspects come from? I don't have a slide on this, but I thought it was interesting. The top ten list of cities that people identified their suspects coming from are Los Angeles, Brooklyn, Chicago, Detroit, Miami, Houston, the Bronx, Philadelphia, Atlanta and the District of Columbia. Do the victims know much about how the suspect got their information? The answer is no. I think this is primarily because unless it's with someone with whom you have a relationship or you can actually see what's happened, as you see here, if they do know, it's most likely going to be something that was personal to them, either it was a wallet or purse lost or stolen, or mail bag, something that you can see that affects you in daily life. But in the vast majority of cases where it's more sophisticated means, such as credit card scheming or computer texting or hacking, they have no idea. Which means that 79 percent of the victims overall really have no idea how this has happened to them. Of those who do, again, it's a wallet or purse lost or stolen, mail theft, perhaps they just applied for a loan or a credit card and they thought that was compromised, their employment records were compromised, or someone broke into their house. But it's one of the difficulties in resolving identity heft is the victim doesn't know it's happened for quite a long time. In fact, we found that over the average number of months that elapse between the date it occurred and the date the victim found out is 15 months, which I think jives pretty well with the study done by Cowper, which is again the privacy rights clearinghouse. We find that there are many victims who don't discover it for over five years. Now, we do see that 30 percent discover it in less than one month, and those are the fortunate few, but again, the average is 15 months and it stretches up to over 60 months. One of the things we try and do here at the Federal Trade Commission when a victim calls is let them know what steps they need to take. We have found, we wanted to validate that this was a worthy process for us to go through, and I don't have a slide on this, but we have found that at the time of initially filing their complaint, only 43 percent of complainants had notified all of the three major credit bureaus. So, there are more than half the people had not known to take that step and had not yet taken that step when they called our hotline, so we are glad we're reaching those people with this very important step. Of the 33 percent, we found that almost 100 percent, about 93 percent of those folks did place the fraud alert, so once they got ahold of the fraud reporting agency, things went well based on that report. As far as the financial institution contact, we advised consumers when they call us to call each of the creditors and to put their dispute in writing. Fifty percent of the complainants reported that they had notified the financial institutions before they called us. However, of these, only 29 percent of victims overall had sent written notifications to the institution. So, again, I think we're providing a valuable service by letting consumers know that they just don't need to call the financial institutions, but to follow up in writing. And lastly, contacting the police. How many of the consumers who had called us had already notified their local police department? Fifty-nine percent. That's good, but still there's 40 percent out there that we're getting the message to very late about that. Interestingly, we found that if they had already notified the police, a good 36 percent had not been able to obtain a police report, so we're identifying a little weakness in the system there. That should be 100 percent. If you notify the police, you should walk away with a police report. We're hoping that with the hard work being done by the IACP and other law enforcement organizations that will become a reality. Well, that's all I wanted to say today, because I do think the victims themselves through their experience will be able to tell us how it actually impacts them in their daily lives, but this is just a big overview from our database that I hope has been informative. Mari, do you want to take it from here while I shut this down?
MS. FRANK: If I could just ask that we introduce everybody. We want to welcome you here this morning, and I especially want to say thank you to the victims for coming and sharing your story, because you've already experienced so much invasion of your privacy, and it's really something for you to be able to share this story and help yourself and other people to make a difference. I remember when I testified on the Identity Theft Assumption and Deterrence Act in 1998 with David Medine who is now at the White House, and I was envisioning what would happen, and I think that what has happened with Jodie Bernstein and Betsy Broder and Joanna Crane here has been a tremendous job, and I want to thank you guys for the wonderful work that you have been doing, because I really see a big difference in coordinating and collaborating. Did you want to introduce everybody?
MS. CRANE: Sure, I would be happy to.
MS. FRANK: And then I will take over. Because I want to make sure that we know who everybody is on the panel.
MS. CRANE: We have brought folks who are victims of identity theft from all over the country to be with us here today. Starting on my far right, is Joe Genera, here from Connecticut, Robert Greer, here from New Hampshire, Mari, of course, and myself. Oh, I want to mention Mari is here from California and is also a victim of identity theft, as well as being a professional counselor and attorney who works with clients who have experienced identity theft. Deborah North is here from Maryland, Nicole Robinson, also from Maryland, Eric Graves from California, and Kathleen Lund, who works here at the Federal Trade Commission as an investigative assistant and has spoken to thousands of victims and will be able to fill in from her depth of experience additional information as to what victims do go through.
MS. FRANK: Okay. You know, there's three reasons why someone would commit identity theft. Joanna talked a lot about the financial industry in that someone will steal an identity for financial gain, or to become a legal citizen, or to get health care services, or to forestall that a foreclosure by committing, you know, filing bankruptcy, or they'll do a variety of things to get financial gain. Now, the second reason that someone might commit identity theft is to avoid prosecution, and we have right here someone that's going to talk about that on the panel. And the third reason that someone would commit identity theft is for retribution or they want to get back at someone, such as an ex-spouse will hire somebody to commit identity theft against their spouse, or a CEO will find that someone in the -- in his company has stolen his identity and perhaps sold it to someone else to ruin his identity. So, that's the third one. And I don't know if we're going to have anybody talk about that one, but that's becoming an issue. So, those are the three reasons why somebody would commit identity theft. And once you experience identity theft as I have and as all these people have, it is a nightmare that takes hundreds of hours. And one of the things I hope that you'll consider as we listen today to some of the issues that need to be accomplished, especially with regard to the standard form that would be sent out, please remember that as victims, we have already lost our identity, and what has happened is, that the imposter has been able to get credit and other services with very little information that they had to provide, yet when we have to prove who we are, we give our whole life away. And on the form that you're going to consider today and tomorrow, please consider that there's information there that's going to be disseminated to the entire world, and you might want to consider limiting that and safeguarding that information, because we've already given our whole lives away. So, I know the people here have really experienced a nightmare, in just trying to prove who they are. I mean, when you've become an identity theft victim, you start to wonder, you know, who am I really, you know, how someone can take my identity. I know that it's important for you to know that anybody in here can become a victim. Remember when your chairman of the Federal Trade Commission got up in March and said that he was a victim of identity theft. And someone who is as careful as I am, I became a victim again in July, a victim of skimming. And so each one of us, this is not about quote the victim out there, this is about each one of us. And also the financial industry, you're victims, too. I mean, your companies are victims. You've lost money, you spend thousands of extra dollars on hiring new personnel to help you in your fraud department and for your credit reporting agency. So, all of us here are victims, and when you hear the challenges, what we're going to be doing is the victims are going to be able to share some of their greatest challenges and then we're going to go over their suggestions.Please remember, like Jodie was saying, don't take it personally, take it as food for thought and for information so we can solve ourselves. We're not here to say you're the bad guys, we're here to say look, guys, we've got a problem, you're victims, we're victims, how can we make this work better for all of us. I see Werner Raes out there and I know that the law enforcement agencies are overwhelmed with not enough resources. I see, you know, Diane Terry, from the credit reporting agencies, working as hard as she can, and yet it's overwhelming. And so all of us here should be working together and doing hopefully what I call solutioneering. We have brainstormed a number of solutions, and these are out on the table out there, if you haven't picked one up. These are just a few of them, and Joanna had to cut some of mine, because I had more pages, but we have a lot of suggestions. Now, if you say oh, this will never work, take it in stride and say well, this won't work, but this might work. So, we're looking to try and find ways that the victims can be -- that we as victims can be helped, that we as citizens can be helped, and that law enforcement and all of us can be helped together. So, what's going to happen is, Joanna is now going to ask each of the victims to provide, tell us some of their challenges and how they first found out about the identity theft, and then I'm going to help them to do some of that solutioneering. So, thank you.
MS. CRANE: I just wanted to mention that their statements by each of the victims in your packet, rather than having each victim today stand up and give their statement in its entirety, we thought we would have them focus on key areas of their experience that will help us in our panels, tomorrow, for the rest of the day and tomorrow. So, rather than read the statements, they're in your packet. And as Mari mentioned, I'm going to sort of asking the victims a series of questions in three areas. First is basically how they discovered it. Secondly, we're going to talk about what was the response of the various entities they had to go to when they initially reported the fraud. This is, you know, when they made those first phone calls. And then, sort of our third area will be and what was the procedure like, what were your experiences, as you began to work through the process of clearing your name. And while I'll be soliciting the experiences, Mari will be soliciting suggestions on how that might be improved. I guess it seems fair, again, to start on my far right, with Eric Graves. Excuse me, Joe Genera. Joe, would you be able to tell us now how you all came to first discover that you were victims of identity theft?
MR. GENERA: It began in 1998. My fiance at the time, who is now my wife, went to buy a car from a car dealership. And I get a call at home that day, after they check her credit report, and according to Kathleen, she has one credit card account, one ready credit account for $500, and an existing car loan. So, we figured she has a great job, great credit history, car loan is going to be no problem. The dealer calls our home, talks to me, and says Joe, we want to sell her this car, we would love to see her in it, she has too much credit. And I said well, what do you mean, too much credit? Well, she has 16 credit cards. I said 16? He goes yeah, and he starts going through the list. So, I basically say hang on, I hang up with him, I call Kath and I say what's up, you know, you told me you only had one. You know, a great way to start a relationship. Fortunately, she was vindicated. In any case, it turns out that two people related to her through all those free offers of credit, those preapproved offers of credit we all get in the mail, had decided to intercept those at her home, fill out the credit applications using her social security number, sending them back in. Those companies offering all this great free credit, don't ask any identifying information whatsoever, no social security -- I mean no picture ID, nothing, it comes in the mail, you sign it, send it back. They have no way of knowing who the person is that filled out that form. As it turned out, and now with fees, et cetera, it's in excess of $50,000 has been charged just through that -- just through that method. Whether or not -- whether or not additional credit had been obtained as far as we believe it also occurred at department stores and things like that, they generally seem to be the easiest ones to get credit from. That's how we found out. And you want to talk about a heck of a surprise. When we got that credit report, which you would assume would just have, you know, the two credit accounts, nine pages long.
MS. CRANE: That must have been quite a shock. Maybe we'll go to the other end of the table now and ask Eric. How did you first discover that you were a victim of identity theft?
MR. GRAVES: Well, actually, it was my son. He was 19, this was also in 1998. He was applying for a credit card -- not credit card, for a used car loan, and it turned out that he got turned down, it was Lockheed Federal Credit Union that turned him down. And at that point then we started investigating his credit, got a list of the three credit agencies, got reports from them, all of which have different ways of reporting it. It was like trying to figure out a new legend for each report. And it was just brand new to us how to attempt to try to confront the situation. He didn't get the car loan, obviously, but we've taken two years to try to clear his ID of two different addresses, one in Sandy Springs, Georgia, we're from LA, a water and power bill that wasn't paid, and also bankruptcy, someone had gotten his name and his social security number, and claimed bankruptcy under his name. And he is 19 years old. He hadn't lived anywhere else but our house. So, trying to go through all the paperwork was obviously a nightmare. The first people we contacted was over the Internet, the OIG Hotline and the three credit reporting agencies, but we really didn't get any sense of here's the procedure you should do, and it was very frustrating to try to know where to go first, and it all mushroomed from there.
MS. CRANE: Thank you. Robert, what about you, how did you first discover that you were a victim of identity theft?
MR. GREER: My cases had a few different aspects, and every time something new comes up, I find out about it through a different means. The first time it happened, I got a phone call from a fraud investigator at a bank in South Dakota, I'm a New Hampshire resident, it was very unusual. She asked me a series of identity questions, which I answered, and she told me what was going on. And a clerk at a retail store whom this bank handles, as the account, noticed that the ID used was a fraudulent ID. So, they contacted their fraud department who contacted me. The second time it flared up, I received a suspension notice from New Hampshire Department of Motor Vehicles for my license. That's when I found out that the bad guy got a speeding ticket that he never paid. I'm sure he meant to, but he just didn't get around to it.
MR. GENERA: He could have charged it.
MR. GREER: And the third one I'm still working through, and that's criminal activity. And I found out through a firearm purchase, with any firearm purchase, you do a background check, and it came back delayed, and then a couple of days later, it came back denied. So, I went up to the state house in Cochran to find out why. And just trying to describe the shock of having three outstanding warrants for your arrest in a neighboring state, it's not real easy to do. But that's how I found out.
MS. CRANE: That's real interesting, thank you. Nicole, how about you?
MS. ROBINSON: I was on my way to the mall, and my sister paged me, she said some man had called me from Kay Jewelers fraud department, and when I returned the call to him, he had let me know that an individual had come into a store in San Antonio, and I live in Maryland, had come into a store in San Antonio and opened an instant credit report, it was $3,200, she had bought two watches and a ring. And she had did that on Thursday. Well, she returned on Friday trying to obtain more merchandise, and they thought it was suspicious. So, they told her to come back and use the Criss-Cross directory, because of course the number she provided was a Texas number to contact me in Maryland. And he told me at that time what I should do to alert the three credit reporting agencies to the fraud. This individual was arrested, but she was only charged with one crime, she was not charged with stealing my identity.
MS. CRANE: Thank you. And finally, Deborah?
MS. NORTH: I came home from work one afternoon and I had gotten a phone call. It sounded like a solicitor, which normally that call doesn't last very long, but thank goodness that I did listen to the call, because it was from a collections agency. And they told me -- well, actually they asked me if I was this person, of another name, same first name. And I said no, but I knew who it was. So, I immediately was alert. It was someone I had worked with three years prior. They then asked me what my social security number was, and I said well, that was my number, and then they said well, you owe over $10,000. And I tried to explain the story, and, you know, they began harassing me. And so that was the beginning. I found out that this person had gotten over eight accounts with my social security number. Over $27,000 worth. I called all the credit bureaus, I got my credit file. What was interesting is when I got my credit file, it had her name on it, and that is really annoying. And her birthday. Which she's 13 years older than I am. So --
MS. FRANK: Especially that.
MS. NORTH: So, that was the beginning of what they said was a long process, a lot of work, and time, to prove your innocence. You know, normally you're innocent until proven guilty, but in this case, it's the opposite.
MS. CRANE: Thank you. If you can remember back, panelists, to when you first made that phone call, either to the police or credit reporting agency or a creditor, trying to tell them that you were a victim of identity theft, and being handled by whatever procedures they might have set up to deal with victims, I would like to focus on that for a moment, because I think that's a very important moment. It's important for you to be able to get the responses that you need as a victim of identity theft, but let's talk about what actually happened. Nicole, we'll go back to you. When you first reported the fraud to the credit reporting agencies, what was that process like for you?
MS. ROBINSON: Well, I call it my weekend of anxiety, because I was contacted on a Friday night, so I had to wait until Monday morning, and I think it would have been helpful to be able to contact the credit reporting agencies right then. I was on hold at work all day Monday trying to get in contact with the three reporting agencies. I did manage to get two on the phone, I believe it was Experian and Equifax. I managed to get actual live people on the phone. With Trans Union, I couldn't get a person on the phone, and because the individual had applied for so much credit, they had changed the information on my credit file. Like in your case, they had changed my birth date to reflect her birth date. The address was wrong. So, when I entered my zip code, of course, I could not get access to my own credit file. So, what I had to do was go home, find a utility bill, some other form of ID, and my driver's license, and then the next day, faxed it to Trans Union so I could get that fraud alert. And it was really frustrating, because I didn't know that the fraud alert was going to go on there right away. With the other two, I did know that they would put it on right away, but with Trans Union, I didn't know when the fraud alert was going to be placed on there, because I couldn't get a person on the phone. So, it was really frustrating.
MS. CRANE: And when you were talking to live personnel at the other two agencies, how much information were you able to find out from them about what was in your credit report at that time?
MS. ROBINSON: Only one. Experian was able to give me a number of recent inquiries, and because I hadn't applied for any credit a year prior to this happening, she was able to give me phone numbers to the places that had requested my credit, so I was able to get working on that right away. Equifax, I had to wait for them to mail it to me. So, I couldn't get working on that, but through Experian, I was able to find out that she had applied for a loan recently, and that's how she was able to be arrested.
MS. CRANE: So, because you were able to get that information right away, they were able to catch her in the process?
MS. ROBINSON: Yes.
MS. CRANE: And to apprehend her and arrest her?
MS. ROBINSON: Yes, Experian told me that she had applied for a loan, and it so happened that the loan was with my mortgage lender, and I contacted them, and they said oh, yeah, last week this woman came in. And she applied for a personal loan. And I said well, you know, tell her you have a check for her and arrest her, and that's what happened.
MS. CRANE: Great. Eric, what happened when you first contacted the credit reporting agencies?
MR. GRAVES: You mean Joe?
MR. GENERA: Joe.
MS. CRANE: Eric's down there, I'm sorry, I'm switched.
MR. GRAVES: I've already lost my identity.
MS. CRANE: This is to Eric.
MR. GRAVES: Actually now I have, now I know what my son feels like. I don't really remember exactly the response, from my notes it indicated that we had to go through a lot of voice mail, no person. We had to drill down through a lot of different automated messages to get anything. And with one of the agencies, I believe it was Trans Union, we had to fax ID, you know, a copy of the driver's license, a copy of the social security number. And I believe also a utility bill, even though he didn't have one, it would have been ours. And none of them would tell us anything over the phone because we couldn't really get a person. And so, you know, everybody has these weeks of anxiety, or days, at least, and ours was that, because we had to wait in the mail for, you know, wait for the mail to come to show the listings from the credit reporting agencies. And like I said earlier, it was hard to decipher, initially. And so you really don't have anybody to talk to at the beginning, and that's -- as I look back on it, and I think things have progressed where I know the thing that I got from the FTC with regards to, you know, how to handle bad credit with your good name or something like that, that has a lot of good things now, but in '98, I don't know if it was surfacing yet, and I certainly didn't get a feel for what I should be going through. And so, you know, police reports and, you know, putting credit fraud alerts weren't occurring until early this year.
MS. CRANE: Was it particularly hard to get the credit report because it wasn't on your own behalf but on behalf of a dependent?
MR. GRAVES: Yeah, actually it was. I had to have my son go through this whole thing, and it was, you know, I had to try to give him crib sheets on, you know, what numbers to punch to get through the thing, and then he could put his, you know, voice on the recording and request it.
MS. CRANE: And now, Joe. The real Joe.
MR. GENERA: Upon discovery, of course, the first thing we did was contact the three credit bureaus, both via phone call and in writing. I can tell you without exaggeration, over the course of the first three days upon discovery, we were on the phone for nine hours, because I've logged pretty much every minute that we spent on this thing, and later when I tell you the number, you will be amazed, I hope. But literally, in the first three days, nine hours on the phone, either on hold, waiting for the right department, trying to get through voice mails, et cetera. We did the same thing, we faxed copies of IDs, social security numbers, all those cards and all that sort of thing. I can also say, at some point during this process, we went down to the 45th Precinct in the Bronx to talk to their detectives about the frauds we reported initially and do something about it. Because the credit card companies were making us feel like -- as an earlier speaker said, that we were guilty before being proven innocent. And even though the crime was against -- technically it was against the companies, it was up to us to prove our innocence. So, we go to the police department, basically got laughed out of there. We pretty much got forced out, out of the 45th Precinct. It took probably about two hours of sitting there. We got this little slip of paper, it wasn't even a police report, but just an incident number. Never took any pertinent information, pretty much literally forced us out of there. They agreed to meet with us, if I could get up a flight of stairs, to the second floor. In case you haven't noticed, I use a wheelchair. So, the initial reporting did not go well.
MS. CRANE: Thank you. You've raised the -- another topic I wanted to cover, so maybe we'll move on to it, and that is reporting to the police, and how that works out. Deborah, what was yours experience in trying to report to the police?
MS. NORTH: This crime occurred in D.C., initially, and so I tried to call the D.C. police. And of course they told me that they would not take a report until I had documentation from the creditors. Well, I'm still in the process of doing that. So, I was never able to file a report. And the person that committed this crime is now down in Florida. So, it's very difficult to try to get these different agencies to work together. And I called -- I didn't know who to call, I mean I don't have experience with this. So, I called, I'm like well, the FBI, it's across state lines, I don't know, and they're like no, call Secret Service. And so they handle that. And I'm like Secret Service, that sounds pretty strange, you know, but I called them and they're like well, we do handle it, but only bigger cases, you know, $100,000, a million dollars, and yours really isn't a case we want to deal with. So, I really got the run-around, and finally I told them I knew where this person was, that she was down in Orlando, I know it's her, and I had called the Orlando police, you know, given her address, and they said well, you know, this happened in D.C., what do you expect us to do about it. So, when I talked to the Secret Service, who I think he was just placating me, you know, to make me feel better, because he told me he wasn't going to take care of the case, he called me back a few days later and he said that he had someone that they dealt with in Orlando in the economics crimes department. So, I got in touch with that person, and they were really able to help me, and they've been working with me, even though it may really not be in their jurisdiction, but after I gave him information, he found out that this person had an outstanding warrant, they were able to arrest her. They aren't able to arrest her for what she did to me, because they're still trying to prove the case, but I'm still -- it's still being worked on. So, it's a long run-around, basically.
MS. CRANE: Thank you. And Robert, you certainly have had a lot of back and forth with the police. How did it go when you made your initial report, or was it them actually sort of reaching out to you?
MR. GREER: Initially, the -- I went to my town police department. After contacting the FBI, Social Security Administration, and a few other agencies, I've forgotten everybody I contacted, but there was either finger pointing saying we can't help you because the case isn't large enough, but this agency may be able to. There was a lot of empathy, but nobody was actually able to do a thing about it. Clean up the record. I'm still working on cleaning up my record.
MS. CRANE: We will get to that in a second.
MR. GREER: Yeah, when I made the phone call to the Bedford police, the detective there gave it to me in plain English. He said we have your case, yes, you're a victim, but you have not been in physical danger, you were not threatened, your house was not invaded. Over here I have a home invasion, third night in a row, and there were $40,000 worth of jewelry stolen in this night. Where am I going to put my attention? And I fully empathized, that is by far a more serious crime in the scheme of things, but I don't want to be ignored. None of us do. And when it goes to your credit record and your criminal record, it's among the most heinous things that can happen against you.
MS. CRANE: Thanks. Eric, you had an experience reporting to the police, and your case was acted upon, correct?
MR. GRAVES: It hasn't been acted upon -- well, I guess it depends upon your determination of acted upon, or the definition of it. I guess I feel guilty that I didn't file this report earlier. I just didn't think of it as a criminal crime, I guess a crime that the police would follow up on, and I guess in retrospect, I'm still right, but I did file it. You know, I did file it, and it was because it was the only thing that the creditors, actually not the creditor, but the person collecting the DWT bill would accept so that they could see that yeah, I am contesting the issue for my son, that this isn't him that owes the money, and so I had to file a police report. So, from that aspect, we filed it late, and they took the report, but they didn't -- they xeroxed a lot of the information. My son had persevered and actually gotten the court documents about the bankruptcy, so we gave the police department copies of everything we had. I had to send back a form, spend $13 with a check, wait weeks for the LAPD to return my report so I could have a full report of the issue, and then I got a letter about a few weeks after that saying that it's been turned over to their financial investigation team. And this was back in March, I believe, that we reported it, of this year, we still haven't heard from any person, a detective or anything, as far as a follow-up.
MR. GENERA: If I could just add something to this, one of the things that was made plain to us by a lot of the creditors, and as I said, I believe there are 14 total, well, go down to your police department, get yourself a police report number or whatever, and we'll take over the investigation from there. We did that, it didn't do one bit of good with any of the agencies or the creditors themselves. Since that time, last November, we contacted directly ourselves -- in fact we have become very good detectives, by this point. We contacted the Bronx DA's office, and turned the case over to them. In the two -- over two years we've been dealing with this issue, not one creditor, nor credit reporting agency has contacted either the police department nor the DA.
MS. CRANE: That was sort of the next area I was going to go to, and that was making the initial report to the creditors. Just throw it out to the group. How -- what was your general experience with trying to get your banks and other financial institutions apprised of the fact that you were a victim of identity theft? I shouldn't say your bank, I would just say the institutions involved.
MR. GREER: I would say in my case, and I was notified by the fraud investigator about nine days after all the activity started, so I was very, very lucky in that there was minimal activity. And because I was well within the first billing cycle, I had -- it was very easy and almost pleasurable to deal with everybody. And I was able to place the security alerts, find out from the creditors or from the reports which accounts were most active, most recently active, and I was able to contact them directly, and I shut down three of the initial five accounts without any loss to anybody. But initially that's how it went.
MS. CRANE: How about you, Deborah, were you able to close the accounts fairly readily?
MS. NORTH: I think the most problems I've had is with the creditors to this point. In the beginning, everything was difficult, but the crime report is being resolved, my credit file is being resolved, they've worked with me, but when you call the creditors, and you leave these messages with the customer service agent, you really feel like you're just leaving a voice mail to nowhere. You really are not getting a response. You have to continually call back, you're getting voice mail, or they leave a message with you and they say, you know, we haven't received your affidavit back, you know, please get back with me. One individual he left an extension, I called back, he wasn't at that extension, and I was told he didn't even have an extension. He didn't have voice mail. I couldn't get back in touch with him. So, that is still going on. That's the part I really want to have resolved is my credit file is getting cleaned up, but I don't have any confirmation or any correspondence from the creditors to say that we know that you're not involved with this and, you know, you have no need to worry.
MS. FRANK: I have a question, how easy was it for you to get the credit applications and the billing statements that were in your name that were fraudulent? Were you able to do that?
MR. GENERA: If I could speak to that. We have -- there are still six creditors left on this report two years later. There were 14 initially. Not one single company in any of the last two years has provided us with any documentation whatsoever that this account does belong to us. Because basically what we've been telling these people is okay, you're saying this account is ours, okay? Show us the proof. Give me a signed copy of the application, show me my wife's signature, show me the bank statements where the purchases were made. I mean not the bank statements, the invoices where the purchases were made, show me credit card receipts with a forged, you know, with signatures on them. Not one of them has provided it, period. Okay? I'll stop.
MR. GREER: I concur.
MS. FRANK: I concur, too, because I have been through it.
MS. ROBINSON: I did get some statements, only because when I got the inquiries on my credit report, she had opened these accounts -- this happened in March, she had opened these accounts in early March, early April. So, the accounts were fairly new. So, they weren't showing on my credit reports, but the inquiries were showing on my credit reports. So, when I contacted the businesses that ran these credit reports, they would send me the bill. They would say okay, I would say I have been a victim of identity theft, I did not authorize opening this account, and they would send me the bill saying okay, thank you for notifying us of your change of address, here is your bill. That's how I got the bills. I didn't -- they didn't readily send them to me, they didn't regularly send me fraud affidavits, I had to ask for those, but that's the only way I got any bills, was they said okay, it's a change of address, and they sent it to my house.
MS. CRANE: Mari, do you want to work with the group on brainstorming and coming up with suggestions about this initial period when you're reporting the fraud to the police and the credit reporting agencies and the creditors?
MS. FRANK: Sure. Okay, so why don't we start, then, Joe, do you want to begin with any of the suggestions that you have? I mean, I was thinking we could even do it in the categories, you know, if you wanted to do it that way, the categories of creditors and credit reporting. Let's do creditors first and then collection companies.
MR. GENERA: I have one suggestion for creditors and credit reporting companies, follow the federal regulations. Do what you're supposed to do. You know, as I said, 14 creditors, out of those 14, five sent us affidavits of fraud. The others did not. We ended up drafting a boiler plate affidavit of fraud on our computer and sending it out to the remaining companies. If you're claiming this account does belong to us, follow the regulations. You need to provide us, as you would in a criminal case, you need to provide us evidence that this is our account. And if you can't do so, or you refuse to do so, then get it the hell off our credit report, okay? Forgive my anger, okay, we've -- this has ruined our life, okay? I can literally say we have gone through this for over two years, we got married a little over a year ago, okay? We aren't happy honeymooners, okay? This is terrible.
MS. FRANK: I'm sorry about that, it's hard, but just think what a strong marriage you're going to have from that. If you guys can get through this, you can get through anything.
MR. GENERA: We're not lawyers, but we play them at home. I'm sorry.
MS. FRANK: Bob, can you give some suggestions to the creditors and reporting companies?
MR. GREER: From the agencies or anybody really, if we can talk to a real person, that was very, very helpful in my case, because in most cases, I was able to talk to a person, and get the response I needed. A lot of the other panelists here have not had that pleasure, or that experience. And I think their experience would be very different if they had talked to an actual person. And where I've hit stumbling blocks is with any kind of documentation regarding all of these accounts. As the fraud victim, we need to be able to prove that the documentation not generated by us that we are the victim of fraud. And to do that, we need documentation from the fraudulent accounts.
MS. FRANK: And quickly you need the documentation, quickly.
MR. GREER: Not just the creditors, but also from law enforcement. The perpetrator was arrested, and I still don't know what he was arrested for. I know he was arrested trying to use my identity, but I don't know what he was actually charged with.
MR. GENERA: And to creditors, we've opted out with the three agencies, we've opted out of the preapproved credit offers, there was a fraud statement on our account. In the last three weeks, my wife has received nine pre-approved offers for credit. This is what got her in the situation in the first place. We don't want these. Period. If we want a loan, we'll come to you.
MS. FRANK: Okay, how about Eric, can you tell us some suggestions for the creditors and collection companies?
MR. GRAVES: Well, I guess in my son's case, we were really fortunate in that there were no bills put on credit cards like the other panelists' situations, so from that standpoint, we've had it fairly easy. With the bankruptcy that's on his ID, however, you know, it goes to the same things that everyone else is saying. You know, ask for the appropriate ID when you do things. I can't believe that the lawyer nor the bankruptcy court in Woodland Hills, California, didn't ask for somebody's ID. If they had asked for a picture ID and three pieces of identification besides, it wouldn't have gotten anywhere, I'm sure, and it wouldn't have gotten on his record. It seems --
MS. FRANK: Now, were you able to get documentation, though, from the bankruptcy court? Were you able to get the documentation that you needed from all the different agencies?
MR. GRAVES: Well, is that a couple of questions?
MS. FRANK: I'm sorry.
MR. GRAVES: I got all the crediting report agencies, is that what you meant by agencies?
MS. FRANK: Well, yeah.
MR. GRAVES: Like the bankruptcy court, like I said, my son somehow got through the door and got the court dockets that are apparently public information. So, he was able to get that on his own accord, which I was really amazed at. So, we've had that in our hand and we've been able to see the signature and we've been able to see the lawyer's name. You know, the other thing, it benefits these thieves, as much as it benefits us, to have all this information out on the Internet. I mean, I went on the Internet to look up this damn lawyer's name, and I got, you know, his name, his address and everything. I was about ready to go down to his house, you know. And likewise, they can get information from us. Likewise, the Internet could facilitate some things, but you've got to be really secure, you know, you send an email across with your social security number and stuff in it, you better have it securitized so you can do that. That would help the fast response, but I don't know if it's the way to do it yet, because I don't think it can be secure yet. But it also boils down to the fact that I think, you know, maybe now the word is getting out that this is a major problem, but I think everybody is taking the easy way out. Everybody we've talked to, you know, it wasn't their problem, they didn't identify with the seriousness of it. I don't know if my son will have actual good credit down the road. I don't know how it's really hampered it yet, although it supposedly has been cleared. And, you know, people will give you the run-around that's been pointed out here with other victims. And, you know, we went down in December of '98, right after this occurred, it occurred in September of '98, we went down while my son was on vacation, we went down to social security to get my son a new number. With all the documentation I've got, it seems a case that the Social Security Administration would give you a new number. I could guess, you know, everybody's response when I asked, you know, because you ask somebody could you get that number and start doing things. So, they start rationalizing why we shouldn't have a new number. Obviously with a younger person, there's not as much accounting that has to go on with changing, you know, work stuff. Later in life, it probably would be a big mistake, but, you know, we went down there and we got a couple of windows, people we talked to, the clerks just didn't take it seriously. Finally somebody returned -- waived to the clerk's window again, they documented -- they xeroxed all my documentation, this whole file, and they said the supervisor said we could give you a new number. Well, you know, a couple of weeks later, a thin envelope came in the mail, and I -- like I mentioned in my statement, you know, to my wife, I played Carnack and I said what do you want to bet this is just a brand new social security card and new number and that's exactly what it was. So, you know, I got a lot of run-around between the FTC -- I'm sorry, not the FTC, but --
MS. FRANK: They're the good guys.
MR. GRAVES: The U.S. Trustee, in LA, and the bankruptcy court in Woodland Hills. And I did talk to someone who was very helpful trying to dig through all this stuff, and he was the only person that took an interest, you know, but he didn't know really what to do, but he did -- he did try to help.
MS. FRANK: So, I think we're getting back to the idea that all of the different, you know, entities that we have to deal with need to understand this problem, and need to give us direction that's clear, and that's concise, and that everybody understands, and then we need to have someone who can kind of guide us through and stay with us, you know, whatever agency you're dealing with, you need to have some -- one person that leads you through the whole thing.
MR. GRAVES: And I think it's a different avenue for everybody, so I think you need to do it by these categories.
MR. GENERA: And consistent, it needs to be consistent.
MS. FRANK: Nicole?
MS. ROBINSON: I'm sorry, what was the question?
MS. FRANK: I'm sorry, what suggestions do you have for the creditors and the collection agencies?
MS. ROBINSON: Because I was notified of mine so early, I think what would be helpful to me would be that the individual can no longer access my credit file. Although the fraud alerts are on there and she has stopped getting credit around June when she bought a car, it would have been helpful that the minute that I was informed, the minute that the guy from Kay Jewelers called me, that my credit file could have been cut off, completely, because I'm finding that and all summer long I found that I was running behind her trying to catch these accounts before -- excuse me, before she was able to run up balances and stuff like that. So, it would have been helpful for me, for my credit report to be cut off the minute that the credit reporting agencies knew that I was a victim of fraud.
MS. FRANK: So, you need to get your credit report taken offline, or did you experience that the fraud alerts were not working?
MS. ROBINSON: No, it did not work in my case. The individual in my case, I know that she got a Rainbow vacuum cleaner, $1,600, which is showing on my credit report right now. She got a car. She got a car insurance policy. She also got a cellular phone. And although my numbers were on there, my cell phone, my work phone, my home phone, nobody ever contacted me when they ran my credit. And the fraud alerts were supposedly put on in April, and this was in May and June when she was opening new accounts. She applied for a mortgage right after her arrest, and I was never contacted. So, I mean it would have been helpful, too, for these businesses to have called me and alerted me that she was still doing this.
MS. FRANK: Right.
MS. ROBINSON: But the fraud alerts did not help at all. So, what would have been helpful was that my credit report was not accessible.
MS. FRANK: And Deborah?
MS. NORTH: One suggestion I could make is speaking to the detective that's helping me with the case, is he says it's very difficult to get the creditors to work with him in investigating. He sent investigative subpoenas, and if they don't want to respond, they don't have to. There's no accountability. So, I think there really needs to be accountability there for the creditors that should work with the authorities and hopefully it would be on a federal level rather than just state by state. So, because he's going across state lines, they don't have to respond.
MS. FRANK: Okay. How about if we go to the credit reporting agencies now and discuss what suggestions that we have specifically for the credit reporting agencies. Do you want to start with that?
MR. GREER: I'm real quick and easy, just real people. And just consistency. As John was saying.
MS. FRANK: Joe?
MR. GREER: Joe?
MR. GENERA: That's one of my aliases.
MS. FRANK: Do you want to add something to the credit reporting agencies?
MR. GENERA: Yes. One of the frustrating things that we run into, and we have probably gotten every two to three months, we get a new copy of the credit report to see where we're at in our struggle to get this clear. Consistently, there are accounts coming back that are not our accounts that are coming back as verified. In one particular example, are we using names or not? Don't use names? Was that determined yet?
MS. CRANE: Go ahead.
MR. GENERA: In one example, or actually with two, The Wiz and Disney. Both credit cards accounts over $1,000. Neither of these companies have gotten back to us ever, period, as far as sending any affidavits, anything. You're still reporting these as verified. We've asked -- we've sent letters stating these companies have never contacted us, you know, to clear it, especially Disney, I mean it's been a black wall. How can you verify a company or verify an account as ours if the company isn't going to investigate it? That's one. There is -- we also have three American Express accounts that showed up. We have in our possession, last November, American Express did their investigations, we have two letters from them stating okay, we agree, account one, two and three do not belong to you. Somehow in the mix, and in the mix of all this, some time over the last summer, American Express obtained judgments against my wife's mother. They happened to -- they used to share the same last name. These judgments are filed in Bronx civil court, and now these three judgments, because they don't have her mother's social security number, they put them back on Kathleen's account. This was last November. They seized our bank accounts. The judgments are still on there. Okay? So, we send letters to Trans Union, Equifax, Experian. We send copies of the American Express letters exonerating us, these are not Kathleen's accounts, these are not our accounts. We get the new credit report back, verified as yours. How can you do that? How can you do this? Our attorney told us that when you guys are verifying, they send a clerk down to the clerk's office, he looks at the paper, oh, yeah, that's Kathleen, yep, verified. That's not how you do it. If you have documentation that this is not our account, call American Express and say you've got to do something about this, this is wrong.
MS. FRANK: Let me just share with you what we have done in California. In 1998 we passed a law that says basically that if you're a victim of identity theft, and you get a police report, and you list all the fraud on the police report, and send a letter to the three credit bureaus, with a copy of that police report listing the fraud, that within 30 days they need to block that, and then it comes off your credit report, and then the burden shifts to the creditor to prove that it's not fraud. Now, all these people are saying we're guilty until we're proven innocent, which was the same thing that happened to me. And what you're talking about, Joe, this particular law that we have in California, if it was nationwide, or if it was applied to all three bureaus in all states, then the burden would shift and you would be innocent until proven guilty, and so that's one very strong suggestion I think that's helpful for victims in California, and I think it should be applied nation-wide. I know Diane was talking about she was going to apply that, Trans Union nationwide, that that way you wouldn't be getting all these verifications, you would have it blocked, and then they would have to prove that it was not fraud. How about you, Nicole, do you want to tell us your credit bureau suggestions?
MS. ROBINSON: Well, you know, since the way the individual who stole my identity got my social, she worked at an HMO, a place that maintained HMO databases, and because her name was Nicole Robinson, she went down, said oh, Nicole Robinson, and she tried out my social, and she hit pay dirt. So, because that information is used in various -- for various things for identification purposes for health insurances, we were just talking about that this morning, that it would be helpful if you cannot block a credit file to have a password or a PIN number, because there would be no way that she would know a password of mine. She would in no way know a PIN number of mine. Protect me from people like her.
MR. GENERA: And not the mother's maiden name. That's the biggest mistake.
MS. ROBINSON: That's easy, too.
MS. FRANK: That's readily available, too.
MS. ROBINSON: And especially if you know me, you know my mother's maiden name. So still, my sister wouldn't know my PIN number, my mother wouldn't know my PIN number. So, what would have been helpful is to keep this from happening, put a PIN number or a password on a credit file.
MS. FRANK: Eric?
MR. GRAVES: I guess I think I answered some of this already, but I don't know, I think because there's three different agencies, it seems like that may be a good thing, because they have different ways of pursuing things rather than just one.
MS. FRANK: And they're competitors.
MR. GRAVES: Yeah, I understand that, but it is frustrating dealing with three different natures of an organization, and to get the fraud alert out, which we finally did, that was different with all of them, too. It would be nice, I think it was mentioned on here that at the beginning of the sessions that there's one hot number or something to dial to get a fraud alert put on all of them at the same time. Well, I didn't have that benefit in '98 and I don't know if it's active now, I just heard reference to it. And I guess from that standpoint, that would help a lot, and just like I said before, having people ask for the right IDs, you know, and really take their job seriously. Especially these -- I think everybody has referred to these instant credit schemes and everything that people are sending out day after day to people's homes, and I think it just adds to the chaos.
MS. FRANK: And I think a lot of the victims that have told me, and I'm sure you've even told me that it would be helpful to have some uniformity in how you read these credit files, because each one is different and it's very difficult to decipher and get through it to have those three credit files a little more uniform and the procedures more uniform so we can work at least for the fraud purposes in the same way.
MR. GRAVES: One thing I was just going to ask, in your comments, I think, Mari, you said that in one of your listings here that sometimes when you're doing, as all of us would do, we want to get reports from the credit reporting agencies. And I guess every time you do that, it adds to your, you know, inquiry, and I'm not sure that looks good on a credit report, either, and in some way, I don't know if you can rectify that, I haven't done that myself.
MS. FRANK: The consumer inquiries don't go to the commercial lenders, right? They don't see those. So, they don't hurt your credit when you get a consumer inquiry, okay? But the other inquiries from all the fraudulent banks, those are important to get off, because those do hurt your credit.
MR. GRAVES: Right.
MS. FRANK: Go ahead.
MS. ROBINSON: Another thing I may want to add, I found that the procedure, and this goes back to everybody having the same procedure. I called Experian, they were willing to just take my word and take some of the inquiries off. Because I had notified them so quickly, and I think probably about two, three weeks after that, Experian sent me saying that we have deleted this information from your credit file. Trans Union, however, I called them, they would not give me the addresses and phone numbers over the phone. The woman told me she would mail me the addresses, she did not mail me the addresses. Two months later, I received the addresses in the mail. And it was a problem because even after I sent the letter saying that I did not initiate this request, they are still not coming off. And I have harassed the businesses that have done it, and they said we've contacted them. They are still not removing these things quickly. Even though I've done what Trans Union has told me to do, and I followed up with the creditors. They are still not removing this information from my credit file, and this woman had put I think all total 80 inquiries on my credit report between March and June.
MS. FRANK: And so one of the things we talked about in our hand-out is we need to have the credit reporting agencies immediately when they're notified of fraud to send out at the addresses and phone numbers of all of the accounts on there, including the inquiries so that we can contact them and get it removed. And they're supposed to contact them, anyone who has been -- any company that has made an inquiry in the last six months, but my understanding is under federal law, you have up to a year to issue credit, and so I think it should be for a year that we give the names and telephone numbers and addresses of all the inquiries for the last year so that immediately, so that you can get those off, like you're talking about.
MR. GRAVES: Can I add -- go ahead, Joe.
MR. GENERA: If we're talking about consistency, I think the one stop fraud alert is a great idea. To the credit reporting agencies, within your own offices, you need consistency. As an example, Trans Union maintains various offices around the country. On the very same day, I believe it was November 9th of last year, Trans Union generated two credit reports, one from their Fullerton, California office, and one from their West Haven, Connecticut office. One showed two of these judgments being deleted, West Haven office showed one of them being re-inserted on the very same day.
MS. FRANK: So, we need consistency and we need training, we need to make sure that all of the credit reporting agencies are training their people in the same procedures. 13
MR. GRAVES: That's what I was going to mention, Joe mentioned, I don't know how these guys did it with as many things that were put on their credits, you know, history, trying to keep track of the reports that you get back, because there's this delay, you know, you're sending a request in to clarify or clear something up, and then maybe you receive -- like in my case, I maybe didn't see the next thing until I sent two requests in separately, and then you're trying to tie one report with another, and sometimes the two reports cross in the mail and, you know, somehow it's got to be a better way to reference your inquiry to the response you're getting back from the credit reporting agency to tie it with this request.
MS. FRANK: If you could be assigned to one person, I think that would make it a lot easier because then there would be consistency like you're talking about, Joe, Rob, is that we're trying to say that one person would be assigned to you so that you could write to that one person and not get mixed messages. Deborah, do you want to add something with regard to the credit reporting agencies, another suggestion?
MS. NORTH: My situation just happened this August, and a lot of the people here, they found out a couple of years ago, and I -- what I would say is that I think it's improved with the work of the people here, that the credit bureaus are getting better, because they have been helpful to me, however one suggestion I would have is when you have specific questions about your file, it should be available to you. I mean, you shouldn't have to fight to have a question answered on your file. For example, I noticed a request for a file just a month after a lot of these accounts were opened, or other requests have been made from other financial institutions, and so I had figured that this person was getting turned down because she had run up so much on my credit that she wasn't able to get it, and that would have helped me if they would have told me where that request went to, because if I had known where that request went to, I could have proved that she made the request, not me. And that would help me with the authorities.
MR. GENERA: Debbie, not to rain on your parade, and I sincerely hope your report stays as it is, don't count on it. You are so new to this, what happened initially when we first reported it, two of the credit reporting agencies did take off every single account, said delete it, delete it, delete it, in fact on the Trans Union file, because we have everything on the Trans Union, I wrote across in big letters, resolved, we're done, yeah. Uh-uhh, it's still going.
MS. NORTH: That's why I want the letters from the creditors, because I know it can pop back up. So, I need those letters from the creditors saying I am clear on this so if they should report it again. And it's not even on that account with the creditors, they don't show it resolved, it's just open, they're going to report me again. So that's why I need those letters.
MS. FRANK: That's an important point, and I know quite a few victims had been saying, and I know you also told me on the phone that, you know, under federal law we're entitled to a free credit report if you're a victim, and then of course you get another credit report until things are cleared up. However, the problem is that often the information is re-inserted and the fraud comes back on or the fraudster goes and does it again. So, we were suggesting that a free credit report be provided throughout the clean-up time, and then even when you think it's cleaned up, you should be given quarterly, for one year, at least, a free credit report, quarterly, for one year, after you think the fraud is off, because it does reappear, and that's happened to everyone. And the other thing is we want you to know that you can ask some questions. We do have a roving mike, where is it? I don't know where the roving mike is. It's over there. There's our rover. So, we have two of them, if you want to ask questions. I think we just want you to know that there's a lot more that we're suggesting that is on this sheet, but let's go now to the law enforcement, any suggestions for law enforcement. Why don't we start out with you.
MR. GREER: I'm really in the thick of it right now, and the problems I'm having with law enforcement is just getting documentation and cooperation. The assistant DA in the jurisdiction that we contacted that had the warrants against me suggested that I turn myself in and have myself arrested, and that was how I was assisted. I am the victim here, and I initiated the action to correct this problem, and as a reward for that, they sent my name to New Hampshire DMV and I had my license yanked, a second time. Just cooperation, and when somebody comes in good faith, I know it's very difficult to comprehend that, because you have people coming all day long to it's not me, I didn't do it, and I don't know how to differentiate between that, but yanking somebody's license when they're attempting to make good on something that they have just learned about two days prior is not really a cooperative way to do it.
MS. FRANK: Okay, so we need -- it would be nice to have some at least national protocol for how do you clean up a criminal record.
MR. GREER: Absolutely, it's got to be national or at least very cooperative between jurisdiction, because I'm a New Hampshire resident, the perpetrator is a Massachusetts resident, and there's criminal activity in Alabama as well.
MS. FRANK: And this happens quite often. Let's go now to Eric. Did you have any suggestions for law enforcement?
MR. GRAVES: Well, I guess because we were suggested to go to the Secret Service, and I was pointed somehow through FBI and Secret Service towards the beginning of this year and somewhat towards the end of the process, and I couldn't believe that I was having to discuss those with them and I knew that my case wasn't going to qualify either, because it wasn't over $100,000, but people wouldn't divulge information. You know, whatever they found, they sort of kept -- because of the different legislation that's been invoked, for rights of privacy, which I can understand to some extent, but when you're sitting on the other side and you feel you're innocent, and you want to get the information that they have found, if any, you know, they say they can't give it to you. And I don't know when they do give it to you, unless they have found something big and then they're going to come and arrest you or something. But --
MS. FRANK: And you know that the imposter, and his or her attorney, if they are apprehended, have a right to all of your information.
MR. GRAVES: Exactly.
MS. FRANK: The police report and everything including those affidavits that we might have to fill out that are ten pages long, and so it is really frustrating for a victim.
MR. GRAVES: And so the West Valley LA -- part of the LAPD, you know, who took my son's complaint, just haven't followed it up. And I just think that they need somebody that's really going to devote time. I don't think it's going to be LAPD, I think it will have to be another branch that's created or something, I can't imagine that they've got -- like I think people have said, there's other things, there's burglaries and such that are, you know, very high priority, right for that instant, and they are going to put you on the bottom. I think it needs to be someone else.
MS. FRANK: And they don't have the resources. Go ahead, Nicole.
MS. ROBINSON: In my situation, I did talk to the detective whose responsibility it was to handle fraud and he told me that the crime was not against me, that it was against the businesses where she got the merchandise. So, it wasn't against me. He refused to take a police report. He refused. I had to -- after I contacted the FTC, I called back and talked to his supervisor and said I have a right to file a police report. And they knew who this individual was, they had had her in custody, and they still have not filed any charges against her, because out of the four or five police officers that I have talked to in San Antonio, they all said this is not a crime against you.
MS. FRANK: And Texas does have an identity theft statute.
MS. ROBINSON: And I found that out.
MS. FRANK: Besides, we have a federal law, too. So, there is training that is desperately needed for law enforcement. Deborah? We're talking about police here, any suggestions?
MS. NORTH: Well, it's difficult because each jurisdiction is unique. So, I don't know what you're going to do, but just like when I called D.C., Nicole and I are both in Maryland, they wouldn't take a report. And they should be required to take a report. There's no reason why you can't make a report.
MS. FRANK: And they need to know that without taking a report, we can't clean up the mess with the creditors or the credit reporting agencies, because no one is going to believe us, so that's so critical, even if it's an informational report. Do you want to add anything?
MR. GREER: I was just agreeing.
MR. GENERA: If I could just add my comment to this as well.
MS. FRANK: Sure, I'm sorry.
MR. GENERA: Police departments need to take it seriously. In our case, sometimes we have been hit with oh, well, it's just a family dispute. No, there's forgery, identity theft, and it's larceny. In fact in this case, serious larceny, over $50,000. That's a very real issue. It is not just a family dispute. That's it.
MS. FRANK: You know, in California, we just passed a law that was signed by our governor to set up a central database for victims so that law enforcement would know that victims are there. What do you all think about setting up a central database with our information with maybe the Federal Trade Commission so that our information is in one place that law enforcement can go into or the creditors or the credit agencies can go into to access our information?
MS. CRANE: Let me just explain what our database is right now and then we can talk about what we mean by our information. Right now our database contains the identifying information of the victim, their name, address, and it is optional, you can remain anonymous. It's name, address, social security number and date of birth, if you choose to give that information. We also have similar information collected about the suspects, so if you have any information at all that you believe pertains to the person who you think did this to you, that goes into our database as well. We code the types of identity theft that have affected the victim, whether it's relating to credit cards or utilities, securities and investments, bankruptcy, so we code it by type. We also try to collect information on the date it occurred and the date the victim first noticed, the amount that the suspect got away with, and the amount of loss out of the victim's pocket. If the victim knows how the suspect obtained their information, we code that in there. We also code in as many of the institutions -- well, we code up too five institutions involved. So, if someone has opened 14 accounts in your name, we don't have the time and resources to collect all 14, but we'll take the top five, which by either were the largest accounts or bills run up, or which five did you have the most trouble with in trying to clear your name. So, all that information is in there right now and we do currently share it with law enforcement nationwide through our Consumer Sentinel system, law enforcement can come in and read reports in every system. Now, Mari, what are you asking for in addition to that specifically?
MS. FRANK: Well, it probably would help to have all the fraud accounts, that would be helpful, but I think one of the things that would be extremely helpful, would have law enforcement to be trained on how to access that, and so when a victim goes there, they will immediately access that information and give you a report. And perhaps if it's from one state to another, you've got this issue that the database maybe then you could -- the Federal Trade Commission then can help to make sure that the law enforcement agency in Maryland is helping to get the law enforcement agency in Florida involved.
MS. CRANE: We have been doing a lot of outreach with police and law enforcement nationwide, and certainly the number of departments that are accessing our database are growing. Once you're on there, it is fairly self explanatory on how to do a search. There are also fields in there on what other law enforcement agencies are involved. So, if the victim has reported it to one or more law enforcement agencies, that police department, that report number, that officer's name and phone number are all in there. So, far as I could tell, we've got everything that you are suggesting.
MS. FRANK: Yeah, it's just a matter of getting the word out and having, you know, someone to do that. Any other suggestions with regard to -- the last category is agencies, other agencies. What suggestions do you have, Eric, for example, from the bankruptcy agencies?
MR. GRAVES: Well, I still haven't satisfied myself that we've gotten Patrick's credit really cleared, because this bankruptcy case was dismissed, but it's still sitting there in the court as an item. In his history, I think it's -- I'm not sure, but my understanding of reading the credit agency report was that it's cleared, but it's still in history on the credit report, and can be, you know, it's still there for someone to really dig out. I wanted to be able to put a motion forward without hiring a lawyer, sorry, and, you know, do it on our own. I mean I think a lot of people are in my situation where you don't want to have to afford a lawyer, there ought to be a means in the court that you would be put on record, similar to filing a police report, that you are on record to contest this particular person's ID with this case. And I haven't found out how to do that yet, maybe it's very simple, but I haven't found a way.
MS. FRANK: We are going to talk about that tomorrow on the bankruptcy panel and I think that's going to be very important, but I think that's a very important issue.
MR. GRAVES: When I went to the court, they just had nothing to tell me, that I couldn't do it, and I nabbed some person who looked like a lawyer on the way out and got their suggestions and he of course gave me a couple of suggestions and then hired him.
MS. FRANK: One of the important things that I hear of hearing from all the victims and the thousands of victims that I talk to and experience myself, the various agencies that we have to deal with really don't have a protocol, don't have a list of what we have to do in my agency to clean up your name. And I think that each creditor, I mean all the creditors and all the credit reporting agencies, and all of the -- and law enforcement and the courts need to say this is the protocol that you need to have that you need to follow and we'll help you. And they need to set up steps, and they need to train their people so that we know what to do to clean up the mess, to expunge that record, because that record is going to be sold over and over by data brokers, and your son is going to have a bankruptcy all over the place.
MR. GRAVES: Well, when we went in to try to rectify this, I think, you know, it boils down to the fact that all of us have experienced, there's one person doing too many jobs, and they don't -- it can't be possible to know all the protocol and procedures, but somehow it has to be disseminated.
MS. FRANK: Right. And the other thing that we wanted to talk about for just a minute is when you talked about changing the social security number, a lot of people think that that's the right thing to do, and I think that the Social Security Administration, or hopefully when they speak today, and I know that there's people here from the Social Security Administration. They need to advise you why you shouldn't change your social security number, and see that social security number is attached to you. Maybe for your son isn't so bad because he hasn't this long history. But I've had a client who too had a criminal record who he changed his social security number because his -- he was mixed with a person who had committed crimes, and so to clean up his record, he was told to change his social security number, and it actually worsened the problem, because the old file and the old social security number gets linked in all the different databases, so it looks more suspicious. So, it isn't always the best thing to do. But any agency that's trying to help a victim to clean up your record need to really tell them, the victims, the ramifications of why they aren't doing something. Any other agency that you want to talk about that could have been more helpful? Joe?
MR. GENERA: My apologies to our host, the consumer assistance group in Texas, is that a branch of the FTC?
MS. CRANE: We have a Dallas southwest regional office, but I'm not sure, it sounds to me like you're talking about a state-level agency.
MR. GENERA: No. Kathleen, hand me my life portfolio, please.
MS. CRANE: We have a southwest regional office in Dallas, and of course we have our 1-800 hotline.
MR. GENERA: We were referred, I believe it was through the FTC, or actually it's the number that shows up on the back of the credit card statements, if this particular creditor is not complying with federal regs, please contact.
MS. CRANE: That sounds like it would be a bank, we don't have regulatory authority over banks.
MS. CRANE: Okay, there's a hand there, could we get a mike.
MR. MIESSNER: That's the Office of the Consumer Credit Division, Austin, Texas.
MR. GENERA: Actually, Comptroller of the Currency. Okay, that's who it is. In any case, this was a name and address that shows up on the back of credit card statements that says that if you're being mistreated or whatever, we sent a complaint to them in regards to Citibank, they're one of the remaining ones who has never provided any documentation, will not respond to us. In addition, these same people opened up a checking account to further the fraud and that's how they were servicing these credit accounts for a period. So, we sent the complaint to this agency here, and I'm sorry for --
MS. CRANE: That's OCC, Office of the Comptroller of the Currency.
MR. GENERA: Yes, I apologize sincerely. The next paragraph on the bank statement also had the FTC list, so I guess I got confused. In any case, we sent a compliant to them asking them if they could force Citibank to comply with the regulations. And I guess they must have misinterpreted our request because they said I'm sorry, actually what it says is as your difficulty with the bank is a subject of litigation, it is inappropriate for the Office of the Comptroller of the Currency to intervene. Basically what that told us, they did not read our letter. We were not looking for -- we were not looking for them to decide this case, because essentially that's what they say later. It's not up to us to decide whether they were right or wrong, basically we wanted them to decide or to comply with the DA's office so we could decide who was right or wrong and determine from there. So, we wanted to provide who was help with us, and we just got a door slammed. Again our apologies to the FTC.
MR. GRAVES: Basically the response that we got back, they obviously didn't read our letter. They had a form sort of thing to send you, but didn't take the time to look at the details.
MS. CRANE: Were there any questions from the audience at all? Okay, there are a couple.
MS. FRANK: We have some roving mikes over here.
MS. FOLEY: Could I ask each of the victims how much time and how much cost out of pocket, not including legal fees necessarily, this has taken from you?
MS. CRANE: That question was how much time and how much out-of-pocket expense has this taken from you?
MR. GENERA: We calculated over the course of the last over two years, at times, believe it or not, at times at least 40 hours a week in computer -- in computer time, writing, phone calls. In total, about 1,700 hours. There are fees for -- because everything we do, and we have done this since the very beginning, I know this from a previous life, everything we do is certified, we do return receipt requested. So, our postage bills, the time going down to the post office, the money involved with copying, we just put together a 1480-page package for our attorney, and for the district attorney's office. MS FOLEY: Telephone.
MR. GENERA: Telephone, faxing, notary. Driving. We have literally driven -- we drove to the court where the -- because we live in Connecticut now and we drove to the court where the judgments are. I mean we've had to drive everywhere. We're talking literally thousands and thousands of dollars, literally thousands of hours, and we're not even close to being done.
MS. FOLEY: Unrecoverable.
MR. GENERA: Unrecoverable. Well, we'll see.
MS. FRANK: Well, it's tax deductible under 165(E) of the U.S. Tax Code, your out-of-pocket costs.
MR. GENERA: We don't need tax deductions, unfortunately.
MR. GREER: I'm just at the other end of the spectrum. I have probably two or 300 hours into it and my out-of-pocket expenses are really telephone and my time and energy. As far as the accounts, I haven't lost anything to the creditors, but just my time and effort.
MR. GENERA: But one thing that we have also lost is Kathleen has had legitimate good credit accounts in her name cancelled because of negative information being reported on her credit account, and you can't put a price on that.
MS. FRANK: When I went through my ordeal, it was over 500 hours, and it was ten months to clean up. And by the time I was done, I had spent like $10,000 just in out-of-pocket costs. And we hear people up to 14 years some people.
MR. GREER: Actually one other thing I would like to add is the time that you're actually spending on resolving this issue is one thing, but the thought always consumes you. Whenever you're awake, it's always in your forethought, you're thinking about it always.
MS. NORTH: I'm relatively new to this, just starting in August, so, and I would really rather not have my employer know how much time I have spent on this, but several days, and of course it's all 9:00 to 5:00, as you know, if you want to do business. So, it makes it very difficult.
MS. ROBINSON: I think all told, well I spent the entire summer working on this, every morning through June, July and August, I spent working on this, and because it happened in Texas, I've -- I got like a six-page phone bill, like $500. So, back and forth. Even when I filed the report with the Texas police, they told me they had to call me collect to take my report. So, I had to pay for that as well. So, it's been -- the phone bills have been higher than the postage bills, because I had to do the mailings to everybody who did the inquiries, and like I said, there were 80. So, the phone bills I think were the biggest, but the time spent on the phone, I mean all summer, like 90 days in the summer.
MS. FRANK: And of course not getting a human on the other end.
MS. ROBINSON: Yes, or getting somebody saying oh, well, we don't handle that, the credit reporting agency has to send us a dispute form and, you know, so it's been a lot of hours.
MS. FRANK: Eric?
MR. GRAVES: Yeah, I guess I'm at the low end as well, probably 180 hours to 200 I would say, and a lot of it like Deborah said is, you know, unfortunately during 9:00 to 5:00 hours, so you're taking time at work and you've got to, you know, somehow make up that time. And so that's been flexible for me, that's been fortunate. And probably $150, but the big thing is my son's credit. I mean he's young, I wanted to get him on the track of getting a good credit reference, and I think he's lost two years in that process.
MS. FRANK: We had some more questions. Could you say who you are and where you're from. That would help us.
MS. NEWHOUSE: My name is Joan Newhouse, I am a commissioner for the Texas Commission on Private Security. I'm also a private investigator in Houston. I concentrate on fraud, and so I've got a great business going in Houston right now. My question is that in the course of my investigations, I regularly come across people who are perpetrating identity fraud. I have tried, and I don't know how many occasions to report it, and there is no one who wants the information. In some cases, it is someone who is perpetrating the fraud against the Social Security Administration, and for purposes of welfare, I have faxed them the names with the multiple social security numbers, I get no response. In other instances, someone's credit is being ruined. If it is like in my looking for a witness, I end up finding the person that I am looking for, their identity has been stolen by someone else. I have talked to that person about it, and then contacted the credit agencies and the credit agencies say that I cannot report it unless I am a member of the credit agency, so I have to pay $1,500 a year to be able to report the fraud that is being perpetrated.
MS. CRANE: I would like to respond to that just very quickly and also we're coming to the end of our session. As of the beginning of 2001, we will have a designation in our database for third party reporting of identity theft. So, we will be taking complaints from third parties, not just victims. So, please, you know, right now we're developing that, but it should be up by January 1st, and so you'll be able to at least report it to us. And as I said, law enforcement will at least have access and they believe be able to see all of the information that you provide when they log onto our system. Thank you very much, audience, panelists, press, for participating in this event today. Most of our panelists, all of our panelists will be appearing on subsequent panels where their specific experience ties into the issue being discussed, but again, thank you, everyone, very much, particularly panelists for attending and your participation this morning.
MS. FRANK: Look at our suggestions here and you can email me with other suggestions and you can talk with us while you are here these two or three days and see what you think. Thank you very much for participating.
MS. CRANE: We now have a 15-minute break and we will reconvene at 11:00 for panel 2. Thank you. (A brief recess was taken.)
MS. BRODER: Thank you all for returning so promptly to your seats. We're going to try to really run on time today, our time is very valuable, as we have learned on an earlier panel. Now we're going to roll up our sleeves a little bit. We're going to roll up our sleeves a little bit and get to work. This next panel is clearing up the victims' credit history part one. We're going to be moderated today by Helen Foster, who is an attorney in our Division of Planning and Information and is on the staff of our identity theft program, and Christopher Keller, who is an attorney from our Division of Financial Practices, and is himself an expert on the credit laws. And so, Chris and Helen, thank you very much, and thank you all.
MS. FOSTER: Thank you. As Betsy mentioned, the focus of this panel will be streamlining and improving the processes of consumer reporting agencies when they are dealing with victims of identity theft. I just want to briefly introduce the panel. And I'm going to start on my far right. We have Nicole Robinson, who you heard from earlier. Well, I'm hoping that she's coming back. Robin Holland from Equifax, Ed Mierzwinski from CALPIRG, Barry Smith from Bank of America, on my immediate right is Chris Keller, my colleague. To my left, Maxine Sweet from Experian, Robert Greer, we missed him, we lost him, he will come back. Diane Terry, from Trans Union, Phil McKee from Internet Fraud Watch, Eric Graves, who we have heard from earlier as a victim of identity theft, and Stuart Pratt from the Associated Credit Bureaus. We're going to begin by talking, we're going to take this in a little bit of reverse order. We're going to begin by talking about consumer reporting agencies dispute processes and the process that a consumer goes through once they have contacted the credit reporting agency, and identify themselves as a victim of identity theft. After that, we will talk about the fraud alert, which we have also heard a little bit about in the previous panel, and then we will move to the proposal for one-stop shop. I know that in the last panel it was mentioned as well as is this something that we have done or is it something that we are going to do. It's still a proposal, it's something that we are really hoping to make progress on today. So, that will be the order of our discussion, and our methodology will be similar to what we pursued in the last panel, where Chris and I will throw out questions and issues and we will ask panelists to join into the discussion and then we will pause to take questions from the floor, as we progress through each topic. And we would ask if you have a question or a comment from the floor that you wait until a microphone gets to you before you start to speak. Now we have Nicole Robinson and Robert Greer. Okay, in the last panel, we heard quite a bit about reporting processes and dispute processes by the consumer report agencies, and I wanted to start by giving the consumer reporting agencies a chance to tell us a little bit about how their processes actually work. And like I said, we're kind of starting backwards, but after a fraud alert has been placed on a consumer's report, and when they're dealing with the individual items on their credit report, Maxine or Diane, could you speak to exactly what they can expect to experience at that point in terms of resolving individual items on their credit report.
MS. SWEET: I'll start. Just briefly, let me -- we do have different processes, so it's good that we're all three here, although they are somewhat standard and they don't vary significantly, there are just some minor differences. But the Experian standpoint, when you contact us and a fraud alert goes on immediately, but it's a 90-day temporary fraud alert, and we wait for you to send us proof of your identity before we put a permanent alert on there. And again, that's one of those you have to make people work harder to protect them. So, if you send us proof of your identity, then we will put a permanent statement on that stays seven years. I was very encouraged to hear the FTC clearinghouse talk about not only sending victims to the credit reporting agencies, but also letting them know that they need to contact the creditors and to fill out the affidavits and documents there, because that to me is a very important part of the process. Yes, they should contact the credit reporting company, obviously we're very important in letting you be aware of what may have gone on, and yes we will dispute the fraudulent items on your behalf back to the creditor, but victims should be informed it is very important that they also contact the creditor directly.
MS. FOSTER: So, once they have done those two, I don't mean to interrupt you, once they have done those two steps, what can they expect in terms of how the procedure works in disputing each item?
MS. SWEET: Okay, they let us know which ones are fraudulent, we send a notice to the creditor that it is flagged as a fraud dispute, and then the creditor comes back to us and hopefully removes the fraudulent accounts from the creditor's report. We then send a new report back to the consumer as some of the victims noted earlier, letting them know the results of that.
MS. FOSTER: Once -- when you communicate with a creditor about -- and I'm not addressing this to just Maxine, any of the consumer reporting representatives can feel free to answer. Once you are communicating with the creditor, do you communicate that this account has been identified as a victim of identity theft, or someone has said that this is not my account, because I understand that there are different ways that someone can have incorrect information on a consumer report. It can be that the information was generally mixed because there were similar names or other kinds of identification errors and then there's the separate problem of someone who has purposefully gone out and gotten credit in your name, so I am just wondering how those differences are accounted for in dealing with a creditor, because that seems to be helpful for creditors to know.
MS. TERRY: Diane Terry from Trans Union. What we have established is a fraud department, and in that department, one of the processes is as we are talking about the consumer, we are adding the alert to the file immediately, but probably the second step in those lines is we're talking to the consumer and we're reviewing the credit file for all recent new accounts as well as any recent new inquiries. Now, when we go over the file with the consumer, if he's unaware of that inquiry or new account, what happens is we're providing the consumer with the address and phone information for that company, as well as we're sending an alert to that credit grantor in his behalf alerting them that the consumer is indicating they're unaware of this account, it's fraudulent. So, we send that alert out the same day we talk to the consumer. Now, we also -- now, that is going to our credit grantor's fraud department. They're most familiar with this type of crime, we need to get it to the people that understand identity theft. Secondly, we do send out a reverification request. That's in addition to this fraud alert. Now, we're sending that out asking them to reverify all the information on the account as well. So, that's part of our seven-step process that we complete on behalf of the consumer.
MS. FOSTER: So, when the reverification request goes out in addition to the kind of creditor fraud alert that you just talked about.
MS. TERRY: Yes.
MS. FOSTER: Is that also flagged as consumer reported fraud, or is it just flagged as, you know, consumer says not their account? Is it treated separately?
MS. TERRY: Well, there's two different alerts, and again, the first alert is very, very specific to we're telling the company that's inquired, for example, the credit grantor, yesterday you inquired, we're giving them a specific day, and we've talked to the consumer and he's indicating that this is fraudulent. We are alerting you, you know, to this effect. We also in that letter let the credit grantor know that we have advised the consumer to contact you as well, but we are getting this to you immediately in their behalf, and we think that's a very important part of the process.
MR. PRATT: Helen, if I could, Stuart Pratt with the Associated Credit Bureaus. First of all, we think clearly with a process like ours, which is fairly complicated, it might be helpful to begin to move towards something that explains a little more easily just generally what your rights are under the Fair Credit Reporting Act, because again, as we're describing what we're doing here today, it is in part what we must do to resolve the consumer's circumstance, the victim's circumstance, as quickly as possible. And it's in part our responsibilities and duties under the Fair Credit Reporting Act melded together that help us get the job done. First of all, ACB has produced a new brochure, which outlines the flow chart, if you will, of the process of dispute resolution, and for anybody, of course, who needs a copy, we make this available to states attorneys general offices and to other consumer protection offices and have been doing so for some time now. And this is one way for every consumer to just say okay, I understand generally with the flow chart, I have heard several of our victims here say, you know, a couple of years ago I wasn't really sure I knew what to do next and I wasn't sure what the flow chart was, what should I expect to happen after I make that first phone call. This is our way of responding to that saying there is a way for you to understand, if you will, what the flow chart is. We have also produced an English and a Spanish language version of essentially all your rights under the Fair Credit Reporting Act, which is just a way to explain in a written form. And, Helen, to answer your question more specifically about these fraud alerts, we also as the Associated Credit Bureaus coordinate the development of an automated consumer dispute verification system which is a nation-wide network that links us with all of our major data furnishers, and we do have specific codes that allow us to transmit a consumer's dispute as a fraud alert or as an identity theft alert, different from, say, a mixed file or different from just a not my account kind of communication. So, we are able to parse through and communicate with our data furnisher customers to make sure they are getting the correct information on their end to they can take the right actions on their end.
MS. FOSTER: Well, like what we talked about on the earlier panel, and we will keep going back to this, part of the challenge has been for you and for us is to get the word out. What we hear often from consumers is I just don't understand what's going on, and the information is out there to be had, but the challenge is on us and on you, I think, to make the system a little bit more transparent so that when a consumer calls and they -- part of the anxiety is not knowing what to expect.
MR. PRATT: I think that's right, I think it's very difficult, because any new crime, it's kind of a vortex. You enter into it, and you have no idea who you are supposed to call first or what the next step is, and candidly, an educated consumer is a much better victim for us because we're going to work through that process more efficiently, they know what to communicate to us. Our whole goal is to purge that file of that negative, fraudulent information, which isn't the consumer's, which is stopping them from getting on with their lives. And you've heard that today.
MS. HOLLAND: Helen, this is Robin Holland from Equifax. We recognize often that when consumers call us that they are so shocked and overwhelmed that fraud may have been committed that we will speak with them on the phone, but we also mail out to them five steps that they should follow. We place that fraud alert on their file immediately and that fraud alert stays for six months, and then we transfer it to a permanent alert if they are verified as victims of fraud. But we outline that when we send them a copy of their disclosure and we tell them the five steps that they should go through and we explain it in what we believe is very user friendly English.
MS. FOSTER: One of the things that we are drifting into now that I want to come back to is effectiveness of the fraud alerts and how fraud alerts work, but while we're still on the process of clearing a consumer credit report, one of the things that was thrown out in the earlier panel was about standardization of being able to look at a credit report from each of the three consumer reporting agencies and read it relatively the same way, and I know recognizing that you're competitors and that you can't, you know, share information the way that non-competitors can share information. Is there a movement afoot to do that, to make credit reports standardized in terms of how to read them?
MR. PRATT: Well, let me respond to that in part by the challenge we have, which is there are three different, as you know, three different file disclosures that are out there today. Put those three disclosures in front of maybe just the panelists or if you put them in front of everybody here in the audience and they each looked, you would probably find almost as many opinions about favoring one of the disclosures versus the other two. And one of the great challenges is, for example, some of our members have moved towards text-message-based disclosures, meaning I can read what's on the file. My wife candidly hates those because she's very analytical and she prefers numbers and columns and prefers to read it in a more compacted form. Now that wouldn't suit somebody else who is just interested in reading it. I get a greater sense of comfort. So, one of the challenges, Helen, is to design something, a disclosure which works for the 180 to 200 million consumers who may have access to their file disclosure. So, we know that there will be some unevenness, in terms -- I think, in fact,
Ms. Graves just said, sometimes learning in first, how to read that file disclosure is an element of the frustration. We are always working with focus groups, individually the companies are, to try to move those disclosures to make them work properly for consumers, but I think you will still see some variance out there in the future, because I don't think there is one right answer. I think it's going to be very difficult to get to that point.
MS. FOSTER: I understood, and maybe I'm having a misrecollection, but I thought that there was a process evolving now among the credit reporting agencies, the big three, to make some sort of standard report. Are you guys working on that, or have you just told me that that's not happening or it's not able to happen?
MR. PRATT: I think what you saw in our initiatives, you may be referring to our initiatives.
MS. FOSTER: I am.
MR. PRATT: And the Associated Credit Bureaus did in March of this year issue a press release describing six points that we wanted to address in this year with regard to identity theft, to change practices, to improve basically based on interviews with victims ourselves. One of those initiatives which is an ongoing, it goes beyond a particular effective date is just standardizing. We heard this on the panel this morning, it's not really a revelation that the more consistent I am between the various systems, for example let's take a conference call we had just last week where we talked about which validating documents would be good ones to use. And, Mr.Graves I have just learned something today, which is if you have a young son, they may not have a utility bill yet, for example, so maybe just saying rigidly you will always use utility bills isn't very effective, because we will have some younger -- in fact we had a young fellow who testified at an ID theft hearing on the Hill, who is also young enough. He didn't actually have a utility bill yet. So, we are trying to learn, for example, standardize what requests we might make so you don't have to dig up ten different documents to meet the needs of three different companies. We are also hosting conference calls on a regular base to standardize and learn from each other what kinds of practices are working when we're interplaying with the consumer. Helen, that's different, though, from saying what we're moving towards a single file disclosure standardization, is it on the table, is it off the table, it's really neither. If that makes sense as we work our way through this process beyond this press release, that will be on the table for discussion.
MS. FOSTER: I am going to switch gears here to an issue that came up and comes up frequently when consumers call us, which is the issue of reappearance of information. We heard this on the panel this morning, earlier this morning, where accounts that you've cleared and you think okay, I'm in the clear, and then suddenly the accounts come back either reported by the same creditor, or reported by a different creditor, for example, a collection agency has now taken over that account and they are now reporting it under their name. Without going into the issues that will be addressed after lunch in terms of furnishers of information and how all of that works, I'm wondering if there has been thought, and I would like to hear if there has, or if any of the panelists have thoughts on this topic on what -- how reappearance cases could be handled differently. Maybe I'll move to this end of the table.
MR. KELLER: Let's say we first hear from the victims. How did you find out, and this would be in an instance where you were initially successful, for whatever reason, the accounts were taken off the report, but then you discovered at a later date that they had been re-inserted. How did you find out about that? Were you notified, or did you find out in some other fashion? Can we start with the victims, because I think that might be an interesting context.
MS. FOSTER: I'm not sure that we have a victim who had that.
MS. ROBINSON: I didn't have re-insertion.
MS. FOSTER: I don't think we have a victim here.
MS. BENNER: I might be able to speak on that actually, Janine Benner from CALPIRG. Last spring, along with the Privacy Rights Clearinghouse, we conducted a survey of a bunch of victims of identity thefts asking them about their situations, and we found out that almost half of the people that we surveyed actually had fraud reoccur despite the placement of a fraud alert on their credit reports. And I think the one thing that we have discussed that might help that from happening is to actually prevent the issuance of credit completely after the fraud alert has been placed on the account.
MS. FOSTER: But you're talking about the issuance of new credit in new accounts, what I'm referring to is when a single account has been cleared from a person's credit report, you know, X, Y, Z, creditor, you know, 160 days late, and then so it's been cleared and you get a credit report and it's no longer there, and then three months, six months, a year later, that same account seems to reappear on a person's credit report, either reported by the same furnisher, or reported by a debt collector, and I'm wondering again, back to an issue of identifying these problems within the consumer reporting agencies, once these issues have been addressed, or once these accounts have been cleared, are you able to know that this was an account that was cleared and therefore won't come back?
MR. PRATT: Helen, part of the response, we do have a responsibility, of course, under the law, to make sure that we maintain an accurate credit history. I mean, we can always start with the predicate of what the law requires of us in the first place, reasonable procedures to assure maximum possible accuracy.
MS. FOSTER: No, I'm understanding that, I'm kind of looking at it from the victim's point of view, is there a way I can communicate with somebody at the credit reporting agency who will know that I was a victim and this has happened to me before.
MR. PRATT: I was just going to say, with regard to the law, we have the responsibility to inform the conumser if we re-insert data that was previously deleted as the result of a re-investigation, so the law does trigger at least one type of communication, it's going to be important to know whether that is working properly in the marketplace, but that is an element of what was built into the 1996 amendments to the FCRA.
MS. FOSTER: Can we have a microphone.
MS. FOLEY: Linda Foley, Identify Theft Resource Center. Besides being a victim advocate, I am also a victim, and the information from my imposter, her address, kept reappearing on my Trans Union report four different times, and what I was basically told was it was being rerecorded as a current address, and that's why it was like a ghost that kept reappearing. My recommendation is once it's been flagged as a fraudulent address or an address that should be identified with the imposter, if it's been rereported, ideally, I would hope Trans Union would have some sort of even a postcard notification that this information has been rereported, it's been reported by this particular company, and you need to investigate it.
MS. FOSTER: And you're saying that didn't happen, because that was what I was understanding Stuart was saying was going to happen.
MS. FOLEY: It did not happen. Now, this happened in 1997, and it continued happening through 1999.
MR. PRATT: Helen, I just wanted to try to fill in one blank on that. I think that is one of the areas where we've identified that the law, if you will, doesn't go far enough. A victim of identity theft has a crime which extends over a period of time, as opposed to this is just a problem, the account wasn't mine, it's now been taken off the file. So, we are looking at pilot testing programs that will allow us to stay in touch with consumers, that is one of the initiatives we announced this year and we are in the process right now of pilot testing programs to try to determine what kinds of triggers should cause us to get back in touch with that consumer, beyond the initial re-investigation time frame. So, I do think that's one of the more progressive steps we are trying to take because, in fact, this is a different crime and it's newer and it's different than the kinds of crimes we've experienced previously when working with law enforcement and so on. So, hopefully as we progress down this road, maybe we're on the right track with that one that that's something that will help victims and us as well, that will keep that file whole down the road.
MR. McKEE: And if I could make one addition, also. Philip McKee from the National Consumer League's Fraud Information Center. We receive phone calls from consumers from all 50 states, the district, territories, and even from many foreign countries, and when we receive calls from domestic consumers about identity theft, our counselors try to get as much information as they can to help them determine what kind of information they need to give the consumer to guide them where to go and to figure out where, in addition to the FTC's phone number, what other phone numbers they should give them. In the process, our counselors hear a lot of times that information keeps reappearing on the credit report. And it would be curious to me to find out, because I know that when we take in consumer complaints on other types of fraud, we are one of the data contributors to Consumer Sentinel. And frequently the consumer has contacted us and they may have also -- they may inform our counselors after the report is made that they have also spoken with Operation Phone Busters in Canada, or they may have also spoken to one of the other data contributors to Consumer Sentinel. And in our discussions with Consumer Sentinel, the actual gatekeepers at the FTC, we know that there is a suppression database, that if one of our reports has already been entered into Consumer Sentinel by one of these other agencies, the computer does match up the information and is able to make a note. So, I was wondering if it would be possible to have a similar suppression database so that not only for renotification, because you said, you have a duty to respond and to let the consumer know if the same company has placed it on there, but I'm not sure whether that gets triggered when a new company, the collection agency, then places that on the report.
MR. PRATT: Philip, you're describing some of the challenges of the databases we have. We do maintain suppression databases, because obviously if you simply delete information from your data base, you will never know whether it's coming back in again. So, of course, you have to suppress, and then maintain it as a suppression database. You've also made another good point, which is that it is more challenging if, for example, the data has been sold as part of a portfolio from one lending institution to the other, and whether or not the lending institution is transferring the right fraudulent information so the account doesn't become once again a collection account, for example, at the new institution. This is a challenge in student loans, for example, even in the governmental area where student loans move from several different agencies and so even student loans often. So, we have actually produced for the data furnishers and we've standardized this in the early nineties, and this is the most recent edition of this, this is called the Metro 2 format. This actually, if we can get every one of our data furnishers to use the Metro 2 format, we will do a much better job and continue to improve the job we're doing to block those incoming trade data where we have taken it off the file in the first place. So, this is yet another step that we have taken. This is available on our website for the customers to access, if you will, the data furnishers to access, and this Metro 2 even includes a whole series of guides that are very specific to utility company reporting, student loan reporting, guaranteed agencies, lender servicers, third party collection agencies. These are guide posts in the back of the book to tell them specifically how to handle their data properly in order for us to do our job. So, hopefully, again, this is part of our effort to standardize. Now keep in mind, we have up to 8,000 data furnishers loading information into the system. It's a lot of information, and that's not an excuse for loading fraudulent information back in the file. But the more we can progress with this effort, the better we will be at doing our job.
MS. FOSTER: I believe we have a question in the back and now is a good time to kind of segue into taking some questions from the floor and then we will move on to fraud alert and one-stop shopping. Can you stand for us?
MR. MEISSNER: Gary Meissner, Office of Consumer Credit Commissioner out of Texas. You talked about a website, sir, what website are you speaking of? Because that's one thing that we're trying to amass down there is we've got the FTC's website, we've got all the consumer websites. I'm not familiar with yours.
MR. PRATT: Our website is for the Associated Credit Bureaus, and we're the trade association that represents the consumer reporting industry, it's www.acb-credit.com. www.acb-credit.com.
MS. FOSTER: Are there other questions from the floor? We'll take this lady right here on the aisle.
MS. WOODARD: Yes, my name is Gwendolyn Woodard with Worldwide Educational Consultants. I would like to know how do we get 50 different state attorney generals working together along with the District of Columbia and other territories in resolving this issue with the advent of the Internet and a possibility of our economy riding on this vehicle to get a handle of this problem now, because we've only just begun.
MS. FOSTER: When you're speaking to attorney generals and law enforcement, I think that we're going to be addressing that issue tomorrow specifically on our criminal panel, and also on the panel 3 this afternoon, so kind of stay tuned, we will be talking about law enforcement issues. And also, because we are focused on -- mostly on victim assistance, the Department of Justice and the United States Secret Service are jointly convening another workshop in conjunction with these that will focus specifically on prosecution type issues, and that is in December.
MR. MIERZWINSKI: Ed Mierzwinski with the California PIRG's D.C. office. Getting back to the question of the reappearance of previously -- previously described fraudulent records, I think that's a problem that the banks have not satisfactorily answered, nor the credit bureaus, and I would encourage the agency to consider enforcement actions, because under the 1996 amendments, it's my view that it's very clear that there should be no reappearance of disputed information for either an identity theft victim or any consumer who has disputed an item on his or her credit report. We did have great difficulty in 1996 gaining any right to sue banks and other furnishers of information. We did gain a very modest right to have individual consumers sue them, a private right of action, if they failed to comply with re-investigation procedures. Unfortunately, many creditors have been seizing on one bad opinion by one judge out there in the hinterlands, and they've been trying to overturn that private right of action, which is really a disappointment to me. Because it was very clear that Congress created that private right, but obviously I think Congress needs to go back to the well and give consumers a private right of action against furnishers for any violation. That will help a great deal.
MS. FOSTER: I appreciate your comments. We will be addressing furnisher issues more specifically in panel 3, that is issues relating to creditors and other institutions that report information to consumer reporting agencies. The second or the first part of your comments, as we said at the beginning, and I know you weren't here for it, but the Federal Trade Commission is active in this area, we do FCRA enforcement, unfortunately, what we do is nonpublic, so we can't really talk about it in this format, and we're hoping that today will focus on voluntary initiatives so that we don't have to pursue as many enforcement actions, if we could have more voluntary kind of initiatives. Over here on this side.
MR. CLARK: Drew Clark with National Journal's Technology Daily. I hope I haven't missed something, but I'm still not clear on what the obligations of the credit bureau is with regard to material that's been flagged as fraudulent or a victim of identify theft. We've heard different things about the credit bureaus are required to notify the person before, but then we've heard that they're not required to notify, and that, Mr. Pratt, you've discussed a pilot program for keeping in touch with people, but I wasn't clear whether that meant you were contacting people in this event or not. For instance, Linda Foley mentioned that, you know, addresses were reappeared four times by Trans Union. Do addresses, even though they're reported again, need to get flagged, need to get a contact with the consumer before they get put on the credit report, or is that something that doesn't qualify under the requirement that the consumer be notified again?
MS. FOSTER: Let me try and summarize your question, since you were kind of going in and out of the microphone. Your question is, what are the obligations of the consumer reporting agencies in the first instance when something is reported to them as fraudulent, and then as we were going down the line, we were talking about obligations under reappearance. So, you're asking about both --
MR. CLARK: It's really more the reappearance question I'm concerned about.
MS. FOSTER: What are the obligations under a circumstance of reappearance. My understanding, and correct me if I'm wrong, Stuart, I think what you were saying was that under the 1996 amendments to the Fair Credit Reporting Act, items, trade lines, credit accounts, if they reappear, or if they are going to reappear, the consumer reporting agencies have to notify, but those requirements do not necessarily extend to other information like name. Am I summarizing correctly?
MR. PRATT: I think that's right, that's absolutely right. This is why, again, we're looking for voluntary efforts for our industry to move forward and explore what other triggers, if you will, might create the right communication. Now, keep in mind that at the same time, I know when we're victims of any kind of crime, we're very focused on it, but at the same time, we have 42 million consumers moving in this country every year. Six million second homes in this country. A large percentage of consumers have at least one address for work, and one address for home. And so an address management system is just one area of discussion, but it is difficult to parse through just volumes of activity that occur. And at the same time distinguish that from the victim's circumstance where it's coming back in again. So, this is a challenge that I think we're still working on as an industry, but I think it's a well taken point.
MS. BENNER: May I make a quick comment?
MS. FOSTER: Sure, over here.
MS. BENNER: I guess as a consumer from the outside, I understand the difficulties that you all must have with the amount of information flying at you, but also as a consumer, I understand that you are able to make money off of my personal information, and therefore I believe that you have the responsibility to be careful with it and to figure all of that out, I don't care how difficult it is. I've given you that information, perhaps against my will sometimes, but because you're able to gain financially off of it, I believe that you should have the responsibility to take care of it, no matter what the difficulties are.
MR. PRATT: It's a good point. Again, that's why I think we're trying to move behind the pale of what the law requires and not sound like an industry that says well, this is what the law says, and that's what we're going to do. Now we may not have met all of your expectations today, but I can tell you that the people I'm working with are very committed to doing the job right for consumers and for victims both. I really believe we're on the right track with this one, Janine.
MS. BENNER: Doesn't the law say that the information cannot reappear?
MR. PRATT: I think that Helen made it clear with regard to what the statute requires in terms of the information reappearing. Keep in mind with an address coming in, it's also information. In other words we don't load an address by itself, addresses coming in with other financial information. So, I think, again, we'll just have to go back and understand that more systemically. It's difficult to speak to it more directly than that here today.
MS. FOSTER: Switching gears a little bit, and we will continue to take questions from the floor, and particularly at the end, but I wanted to move on to the fraud alert, because I know it was something that the victims talked quite a bit about earlier. And one of the things that we hear repeatedly, and I know we have heard this morning was, how can a fraud alert be made more effective in terms of once that fraud alert is placed on a consumer report, how can we make sure that the creditors or other users of the consumer report who look at it are understanding what it is, and are honoring it and giving it the type of attention it deserves. And I would like to kind of direct that open-ended question to Barry Smith, who graciously agreed to be the sole furnisher on -- or the sole creditor, representative of creditors on this panel. Barry, do you have ideas about how credit fraud alerts could be made more effective or how they work or don't work?
MR. SMITH: Well, I was pleased to come and join this panel today and talk about fraud alerts, because my brother was recently a victim of ID theft, okay, and he turned to me as, quote, a professional in the business, and said what's the best way to get this resolved. And I went up against many of the problems that they're talking about today. And we went through the standards of entering fraud alerts on the bureaus, and then since he was not doing business with Bank of America, I said why don't you apply for a card at Bank of America and let's see how the process works. And I took an application, I submitted it to the credit department, and the credit department was on the phone back to me in about 15 minutes and said there's a fraud alert on this person's file, do you really want to approve this account. Well, they went through the contact, of course they received the information and said yes, but a decision point was reached there, I mean they could have approved that application, they may not have approved that application. We happen to take the business of fraud alerts and identity theft very, very seriously, stopping somewhere between 500 and a thousand attempts for credit each month that come in to us just through applications. And when we do that, we do go out and contact the consumer, we find the correct consumer, and we notify them and send them information about the account. As I said, we take that very seriously. But if the fraud alert had not been picked up, or somebody just wasn't doing their job the way they were instructed to do it, an application could have been bought. And I don't know, I kind of throw out to the group, maybe we shouldn't send back full credit information when there's a fraud alert on the file. Maybe we should send back something that's truncated, something that's not enough information for the bank to make a prudent financial decision to grant credit to that individual. On the other hand, I think we're going to hear some disputes and some questions from people who have put fraud alerts on the file, and if that stays on the file for seven years, do they really want to stay in that process for seven years, if, in fact, they are not a victim to the extent that we've heard people talk about today. In my brother's case, he had eight or nine different inquiries. And I think it would have been very beneficial if we had been notified by the bureaus when the inquiry came to the bureau, and there was a fraud alert on the file. So, instead of just responding back to the credit grantor, maybe some kind of notification should have come back to us. And there's really two sources for that. It's either the credit bureau sending that information back, or of course there is the credit grantor on receiving the information back with a fraud alert on it, should they notify the individual that an inquiry has been made. And even if we decide to deny credit, because most -- most fraud alerts on file say if you decide to grant credit, don't do so without notifying me first. Well, when I pursued this with many credit grantors, I was told we didn't contact you because we didn't approve this application. We realized your application address was different from the application address that we had received the application from, and therefore we declined the application, so therefore we didn't notify you. And I said boy, I really wish I could have been notified. I called some people who had inquiries, and they told me I can't talk to you, I can only talk to your brother. And I said why is that? And they said because he's the one that applied for credit. And I said no, I think you've got that wrong, it was somebody else entirely. And if you expect me to find the crook and have the crook contact you to give you permission to talk to me about the application they submitted, I said this is getting a little bit silly. So, I think that in our next session we're going to talk about some issues on the fraud affidavit and I am going to stay with that.
MS. FOSTER: That's right.
MR. SMITH: But I think the fraud alert, maybe we should consider or maybe we should have some hearings and talk to people about whether or not we want truncated credit information going back to the individual. Maybe we have to get truncated information back and get a name and address, a telephone number, to contact that person. But if we ask the audience in the last seven years how many people in this room have moved or changed their telephone number. I've changed cell numbers at least once, okay, I haven't moved, but I know an awful lot of other people in my family have, and who would remember three or four years down the line to go back and update that fraud alert to say I no longer live at this address, now you have to contact me at that address, when, in fact, the whole thing may have gone away. Many of these situations get resolved and get resolved pretty cleanly. As I said, we deal with a lot of people. We notify a lot of people that there is fraud coming in on their -- of somebody's attempting to perpetrate fraud on them, and the situations get resolved much, much easier than what we heard from the victims today. My heart certainly goes out to the victims today and all that they have been through, but there are a lot of cases where the process seems to work. But I suggest notification to the customer, and maybe a truncated credit information with the -- when there's a fraud alert on the file.
MS. FOSTER: I want to come back to one of the suggestions that you just made, that kind of the idea of a gateway system has been -- to build on what you just said, has been tossed out as if you are a creditor and you ask for a credit report from one of the bureaus, and the credit bureau has a fraud alert on that file, that they would then not transmit a full report back to you with a fraud alert, but rather require you to go through some additional verification type steps. Now, the hurdle that you point out is a significant one, which is -- and it's open for discussion, length of time versus how do you make sure that the information is going to be updated when there's changes in address and changes of phone number, you know, it may be that, you know, you put that on -- if you put that on to some of the consumers, I think you're right, for seven years it's a little bit much to ask people to remember, oh, yeah, I have to update my fraud alert phone number or address. On the other hand, that's what we're seeing. We're seeing, you know, perpetrators who come back to the same individual over and over and over again, after a period of time, because they know that that person, you know, will have -- it's analgous to police who will tell you if your house has been burglarized, you know, be very careful, because the thief will wait three months until you get paid off by the insurance company and get all new stuff and then they will come back. So, it's the same kind of process once they find somebody who is a victim who has worked for them, they come back. I want to toss the idea of having a gateway system to the consumer reporting agency folks for comment.
MR. KELLER: Let me ask, perhaps there's a threshold question that perhaps will be more successful than the last time, which is do the consumer reporting agencies currently differentiate in any fashion when they supply the consumer report, either pursuant to consumer disclosure or in response to a request from a credit grantor between those just normal ones and those that are flagged with a fraud alert?
MR. PRATT: Well, let's go to that first, and I think the first part of that answer is that one of our initiatives, again, was to look at the security alerts, because we wondered are there systemically any significant problems with them so that if BofA can recognize that alert, take the actions which thankfully worked in the case of BofA. We are now standardizing text messages in all three systems, so that where a system, a creditor system is scanning for the text message, they won't have to scan for three different text messages. We're also inserting an alphanumeric sequence, which is a spiffy way of just saying some numbers and some letters that don't mean anything, but they'll be consistent across the three companies. So, here again, every creditor, we can tell them, go look for this alphanumeric sequence. If you don't want to scan for the whole text message, scan for the alphanumeric sequence. This is in addition to codes companies transmit today. All three companies have products as well as free-of-charge services today that are telling our customers unusual pattern of inquiries that are associated with this file. For example, which is -- we think is one of the partnerships we have, it's an obligation we have, and it's really you as customers who drive a lot of that for us, you know, what can you do to help us. That's one example. We do tell you when the inquiring address is different than the address on the application -- than on the file, so that you know that there's some difference between the two and that gives you a chance as the customer to authenticate and take additional steps to validate that application. So, I think we are trying in partnership with our customers to find the right mix of triggers to communicate back-up stream. By the way, that security alert goes with every file, whether it's a highly quantified risk score or whether it's a full file mortgage report, it goes with every single file that we send.
MR. KELLER: Perhaps I didn't make myself clear. I understand that there are proprietary products that you'll attach to any file.
MR. PRATT: I think I just said that some of those were free, though, Chris.
MR. KELLER: If you see an anomaly. What I was concentrating on is where there's been a report of an identity theft and a fraud alert placed on the file. Do the supplying consumer reporting agencies have any differing procedures, just in terms of mechanics, the nuts and bolts of supplying those?
MR. PRATT: I think today the step is to transmit the report and work with our customers to make sure they have the right information, Chris, but no, there is no gateway today, I think, using Helen's term.
MS. FOSTER: Is there a variation, and I just want to get the three representatives of the reporting agencies here to kind of follow up on Chris' question. Is there variation in how that is handled, or is it very uniform that a -- I guess where I'm going with this, a fraud alert is a fraud alert in terms of a consumer reports it and it's consumer reported as opposed to products like what Chris was talking about, which are anomaly alerts? Are those the same for you all or are there differences or are they different products?
MS. TERRY: Diane Terry, Trans Union. We all have fraud alerts, but the verbiage may be a little different on each one. But basically what they're saying is to contact the consumer, to verify the application. Ours is dated, we allow two phone numbers, a day or evening number so that, you know, depending on when this application is made, the credit grantor can contact the consumer. Now, we do have a second type of alert as well, and this is a case where we deal with law enforcement and credit grantors directly, many times each day, and what happens is they can alert us, if they're aware that there's a fraudulent situation, but they've not contacted the consumer yet. We do have a different type of statement that we can add to the file that will say potential fraud victim, verify all information on the application, until we can get ahold of the consumer to confirm the situation. And we feel that's a very important part of what we do as well.
MS. BENNER: Can I ask a question here?
MS. FOSTER: I just wanted to give all three a chance to respond, is that okay?
MS. BENNER: Um-hmm.
MS. SWEET: I'll jump in. What she was saying is true, the idea of the fraud alert is already pretty standard, and we're taking it even further to actually make the wording exactly the same. So, there will be no question when a creditor receives a report that it is a fraud alert. And we're even adding a code so that it will even be more machine readable. And I might add that Experian, another step beyond that, in the form of an alert, is we're just announcing a national fraud database that we're building so that actual experiences with fraud are captured, all the credit bureaus will have an opportunity to contribute to it, and it will be available to new lenders, as well as law enforcement.
MS. HOLLAND: Robin Holland from Equifax. When we deliver a file, at the top of the file, right in that header information, we state in bold letters that the consumer is a fraud victim, and then at the end of the credit report, in pretext, we talk about fraudulent applications may be submitted, please call, et cetera, whatever that consumer would like to say. Of course as Mr. Pratt said, we are moving that we will all have the same alphanumeric codes and the same standard message, but we do at the top, when you first see the file, it clearly states fraud victim, and as well we add some other information at the end of the file.
MS. FOSTER: I want to give Janine a chance to give her question and then I will follow up with mine.
MS. BENNER: Thanks. I was just listening, Stuart, you mentioned that some services were free of charge, some services you charged for, and I'm wondering if that means that there's some information that you could be providing to a creditor about my record if I was possibly a victim of identity theft, but if they didn't pay a little extra for it, that you would withhold that.
MR. PRATT: I think this has more to do with, for example, let me give you an example, a type of scoring system that would evaluate applicant data. We also help our customer evaluate applications. And, for example, if you took my street name, my street name could be two words, it's in fact one word, it happens to have an E on the end of it, which by the way makes your house a lot more expensive apparently if you put an E on the end of anything. But suffice it to say you might find an identity theft perpetrator putting my address in as two words, and they might miss the E on the end of the second word, or they might drop one of the numbers, or they might flip one of the elements in my social, or they might spell my name S T E W as opposed to S T U. Those variations might not be very evident to Bank of America automatically on its face, all of that looks fine and there is an address that looks very, very similar to that, but we have systems that we are building today, and I say we, generically the companies, where they go out there and they build systems that will analyze those files, those data elements, and when they see that there's enough variation in this prediction, maybe the lender ought to look at that one again, even when nothing is materially wrong. So, I think that's an example of one of those for-profit products.
MS. FOSTER: That would be something separate from a consumer-placed fraud alert.
MR. PRATT: Correct.
MS. FOSTER: I can see why you would want those to be different, you want the banks to definitely know this consumer has reported fraud, as opposed to we have identified anomalies that may indicate fraud.
MR. PRATT: Exactly. And that is the challenge, anomolies that don't create a myriad false positives, what we call false positivies, where the credit grantor is overwhelmed with half the files coming in are indicating anomalous activity, if you will. So, there is a balancing act here with that.
MS. BENNER: So, if someone were to, say, pass a law requiring that information to be included in the fraud alert, that might cut down on your profits?
MR. PRATT: I don't think that's really fair, Janine. I mean we're talking about apples and oranges here. We are delivering the file data to the lender, just as I think every consumer expects us to. We are delivering a security alert to every lender, just as the consumer expects us to. We are going beyond the nature of the law to try to understand what our victims themselves have said. And they're our victims as well. We have to work with them as well. I think we're taking a responsible road on this one.
MR. SMITH: You know, Janine, when we negotiate pricing with the bureaus, I think they'll tell you that we're pretty tough when they offer a new product and say this is what the price is. We do a pretty good job trying to knock their profits down just that way.
MR. PRATT: They do a very fine job actually.
MR. SMITH: And in fact, one of the things that we we do is we often try to play one bureau against the other, and say if you had a tool and you included that, then maybe that would make you the preferred credit bureau in a particular area and would look to more volume into those areas. So, it's not totally a one-sided street where they have all the cards. I think we do -- I'll be honest with you, my boss doesn't think it's quite as good a job as we can keeping the costs down, but we certainly do try.
MS. FOSTER: I would like to follow up on a theme that was started earlier in terms of length of time for fraud alerts and I think that we heard from Trans Union and Equifax -- Experion, I'm sorry, about theirs, and I didn't give Robin a chance to tell us.
MS. HOLLAND: Oh, yeah, when you contact us and say that you're a victim of fraud, we immediately that place that fraud alert on your file for six months, and then, of course, we would then switch it to seven years if you are a verified victim of fraud.
MS. FOSTER: I would like to just toss out what or talk about what verification is required, and many victims, and again we're bleeding into what's going to happen on panel 3, talk about the onerous nature of what's required to verify themselves to different institutions, so I was wondering if you would just give us an idea of what's required currently to verify from a temporary fraud alert to a permanent. Or more permanent, I guess not really permanent.
MS. SWEET: I think it's the same pretty much. For the temporary, there's no requirement, you just call and let us know and we don't put a phone number on at that point because we could be putting the criminal's phone number on there and you could be calling them and verifying. So, at that point with the initial one that goes on immediately, we just say please verify my identity before granting credit, and then that would give the consumer an opportunity to send us the proof documents, which typically are a copy of your phone bill and utility bill, but phone bill specifically so we can verify phone numbers. That's the one that we put on that stays on permanently.
MS. TERRY: We don't have a temporary, so to speak. When we talk to the consumer, we're verifying the information on their file and identifying information. We add the alert to the file for seven years. Although we do educate the consumer that they can remove that at any time. I was a victim and I kept mine on about a year, and I felt that that was adequate and it worked.
MS. FOSTER: How do you distinguish in that circumstance between consumer victims and perpetrators when the request comes in to have it taken off?
MS. TERRY: Well, we require the request in writing to remove it and we think that that's very reasonable and most of the consumers like it that way. They would not prefer a call to be made to have that removed.
MS. FOSTER: Robin, I wanted to give you a chance to respond.
MS. HOLLAND: Sure. We certainly require, if you want the fraud alert removed, we, too, require that information in writing. In terms of information, we at he Equifax would like to say that California law in terms of a fraud victim submitting that police report, we accept a police report from all of the states, not just California.
MS. FOSTER: So, when a victim reports that they are a victim of fraud, you place it on a temporary fraud alert and then to get a more permanent one, you require a police report?
MS. HOLLAND: A police report would be one of those, the affidavits from the credit grantors could be something else, a utility bill could be some other documents that are requested to be submitted.
MR. PRATT: I just want to say, this is one of those challenging areas where as we all know that falsifying documents is easier today than ever before, in fact I think, Mari, we talked about your own situation, it's also easier to get a valid driver's license these days. So, unfortunately, in society today we have a lot of points of entry, where in one sense we want more validation, authentication to make sure that we're offering the right governmental document or other document. I have a pile of documents in my office right now, Helen, that are falsified requests for consumer reports. Now, one of the jobs we have to take on is to make sure we're not issuing those. Now, this particular perpetrator of what we think is essentially a crime, and in fact under the FCRA is a crime, wrote them all in the same handwriting and submitted the same address to which all of those files were supposed to go, so it wasn't the smartest crook on the street, but it's an example of the challenge we have, where we have thousands of proof documents coming in every month where somebody is falsifying BofA's letterhead. So, again, it's not to say that that's an excuse for not doing anything, it's just part of the challenge we have in a desktop publishing world where almost anything can be produced and look pretty good.
MR. McKEE: If I could make an addition to that. Two parts. One of our actual staff members wound up becoming the victim of identity theft and she had a lot of problems when she was trying to make her fraud reports because she had to have everything notarized. And she was lucky, on that score, because we have a notary in our office. However, this can be quite difficult to someone, especially if they're in a rural environment, or if their bank does not offer free notarization service. I know my credit union notarises everything for me for free, but many people don't have that, and so this adds another level of financial things. A notary may not be as expensive as the hours on the long distance phone call, but it still is an added expense, and to some victims that we hear from on the phone, it's almost considered an insult, because from their perspective, the crook was able to get the information onto their report without much verification, and yet they're not even trusted to sign their own name. The second thing that I wanted to mention is actually takes one step further back, and I thought it was important to mention, because I didn't -- wasn't sure whether it would ever get mentioned anywhere else, and that was brought to mind by what Stuart just said about the Internet. It's important for people to remember, when they go online, not to fill out all of those forms immediately. I don't know how many times at the Internet Fraud Watch we've heard from consumers who a few days after they filled out that survey, or a few days after they filled out this huge long form with all of their demographic and personally identifiable information so that they could get a chance to win some fake prize, that they wonder well, maybe I just gave away all of my information, since they did ask me to give name, address, phone number, social security number, driver's license number, mother's maiden name.
MS. FOSTER: Prevention is important, and I think your point is well taken, and since I plugged the Department of Justice and the Secret Service's workshop in December, I will do the same thing for the Social Security Workshop on Prevention which will be on Wednesday of this week, and they will talk in depth on topics about sharing information and how information can be compromised. Your earlier point is one that we will -- your notarization point, and it's a similar issue to getting a police report, it kind of under the rubric of burdens on consumers to verify their information will be talked about in panel 3, but it also has application here in terms of the consumer reporting agencies, and that's why I asked the question about what you're requiring, because often times, it's almost a toss-up, what's more difficult, to go to the police and ask them for a police report and then they say no, or to have to find a notary, if you are, as Phil said, in a rural area or just don't have access to a notary, like some of us who, you know, work in a lawyer's offices do. So, your point is well taken.
MR. PRATT: And Helen, that's why we have to be careful about choosing one document and saying well, there it is, that's the document. Because if we choose a police report, for example, which we don't, that's not an impediment. I think that Robin has said that, for example, that's one on the list of a number of documents that we think could be helpful because it may be the case where the victim just can't have access to a notary to notarize some sort of document. And a lot of our documents are being faxed anyway. So, it doesn't make a lot of sense to have some sort of notarized raised seal on it, for example. But we have to be careful about choosing the documents to make sure that they are ones that work but are not impediments to getting the job done.
MS. SWEET: And if I can speak on that, the notarization and the difficulty. In defense of the creditors who are going to be on the later panel, I know what that experience is, because we experience the same thing. Everything that we do to try to help consumers and make it easier, the criminals are just as quick to pick up on it and take advantage of it. So, it's always a balancing act. Everything that we try to do to make it easier for the real consumers, we're opening the door for the bad ones. And the lenders are in the same position on these documents. When you claim fraud, and they make it easy, then they're opening the door that the credit repair firms are sending us hundreds of thousands of disputes saying fraud. So, the lenders are getting these stacks of documents saying it is fraud, it's not mine, when, you know, only this many of them are real fraud. So, they're having to, you know, how do we deal with it. It's a challenge.
MS. FOSTER: I would like to get back to the victims right before we take more questions from the floor. And Nicole, in particular, I know that your experience was one where a fraud alert didn't necessarily stop, and I was wondering if you could -- stop further fraud, and I was wondering if you could expand on that from your earlier statements.
MS. ROBINSON: Yes, I placed a fraud alert on my credit reports on April 10th, and the criminal in my case, although she was arrested, and released, she was able to open new accounts in June, even with the fraud alerts on there. I know that she had gone to at least 15 car dealerships in June attempting to purchase a car, and only one of those car dealerships looked at that fraud alert on the credit report and called me. Although they didn't leave a message, I did see when I got home later that they had called. And I think it's irresponsible of these credit grantors to look at a fraud alert and even though they don't grant credit, not contact the consumer and say hey, this is going on. You know, it's just irresponsible.
MS. FOSTER: Thank you. Robert -- or I'm sorry, Eric?
MR. GRAVES: I guess in terms of the alerts, my son who had the alert put on earlier this year, he had one phone call from a department store I think that was a -- that was having someone try to access his ID, and he was able to respond accordingly, and say no, that's not me. And the other time, he didn't get any notification. I think as a victim, you would want to be bothered by that kind of information. And I guess the question we've all got is why do these -- what do these places like Best Buy, all these computer stores and department stores, who do they go to to confirm that somebody's credit is viable? Do they go to the three agencies that are represented here or do they go to some central source, or do they sometimes just put it on hold and say well, if the computer is down, we'll issue the credit now, and then get back to the computer verification later. They do have to be held to a higher standard than they're currently doing.
MS. FOSTER: I think if you ask ten creditors that question, you get ten very different answers, but generally we know that they are using at least one of the big three consumer reporting agencies to get credit information, and that's why the fraud alert plays such a vital role in stopping the continuing issuance of credit. Diane, did you have something?
MS. TERRY: Well, it concerns me that some of the victims have said that the credit grantors are not looking at those, and that's certainly a problem. That's what that alert is for, it was one of the first processes that we established to help the consumer victim. So, the fact that they're not -- that would be a problem. So, in addition to that, though, day in and day out, we do get calls from credit grantors that do look at those statements. We've had some very successful cases where someone goes to Circuit City or an electronics store and is applying there, and there's an arrest made, you know, right on the facility, because the alert is retrieved by the company, they make that call, they talk to the victim, confirm it's not them, and that's the success story. So, we do see some good, you know, and certainly it's intended to be and we do find that it does work.
MS. FOSTER: We will be exploring the topic of fraud alerts more with the creditors on the third panel, so stay tuned for a continuation along this vein. I do want to go to the floor now with some questions briefly, and then we have one more topic to cover in our short time left. How about right here?
MS. BHAGWAKAR: My name is Bhavna Bhagwakar, I work for Volkswagen Financing Company, and what I am noticing is that the fraud alerts are not consistent with all three bureaus. I would see it on one, and we don't run all three bureaus when we look at the credit application, so if I approve the person based on one bureau, later appointment he is a skip, I try to look at three bureaus and one bureau is showing fraud alert and the other two is not showing that.
MS. FOSTER: That's the perfect segue into our next topic which is going to be one-stop shopping, again the proposal that one call by a consumer could activate a fraud alert on their report for each of the credit reporting agencies. So, we're going to be coming back to that momentarily. Any other questions about fraud alerts? Over here.
MS. FRANK: I just wanted to get back to the address change, because that's really the biggest issue. When a victim finds out that new credit has been issued to a new address, I mean that's the issue. Stuart, I know that people move all the time, and the problem seems to be when someone applies for credit in your name, at a different address, and somehow they have all the proper information except the address, and then they get a credit -- they get credit from a credit grantor. So, I know there's some legislation pending out there to hold creditors and credit reporting agencies accountable. Who do you think should be more accountable, the creditor or the credit reporting agency with regard to change of address? I think the real key issue is that when we screamed and hollered a couple of years ago at the Postal Commission, they established a really great procedure where when you move, the Postal authorities will send a postcard to your present address and the address that you're moving to, and if there is fraud, they ask you to, you know, verify it, have you really moved. And it seems to me like that's really working very well. And I would just suggest that either the creditor be held to that, or the credit reporting agency be held to say someone has applied for credit at a different address, is this truly your address or is it not and clarify with us and update your credit report record. But the biggest issue for all of the victims that I think we talk to is there is always a change of address, unless somebody is going to do skimming or a quick bank, you know, quick access to your credit card, but if they're going to establish a whole profile in your name, they're going to get a new address. And that is probably, at least in my view, the biggest issue. So, what do you think about having a notification like Postal authorities have, you know, either Barry or Stuart.
MR. SMITH: Let me say this, I think you may have mixed a couple of subjects together there. I don't think there was always a change of address, at least the way a credit grantor looks at a change of address where somebody has infiltrated our file or managed to get somebody at our bank to make a change of address on an existing account.
MS. FRANK: No, I'm talking about new profile.
MR. SMITH: When somebody applies for credit with a different address, then that address is going to appear on the bureau, and that's going to appear whether the credit was granted or whether the credit was denied. The new address is going to appear on the record. We're certainly suspicious for a particular time frame, and we challenge addresses that are on file for particular time frames, and we'll vary those from time to time. I think that it's a problem, because there are so many address changes that are out there, and I think that one of the things that I have asked the bureaus to look at, is to say if they could tell me as a credit grantor how many subscribers are reporting address A, and how many subscribers are reporting address B, then I would be in a much better position to determine whether this is a true application for fraud, or whether it's a fraudulent application for fraud. I know the people sent cards have them sent to their office address as well as to their home address, and those records are going to be out there on the file, but if over a period of time, and I think you mentioned that you had been a victim for many years before you found out that that was a problem, if I had applied -- or if you applied for credit at Bank of America and Bank of America looked at this and said gee, there are three accounts out here, or two accounts out here, that are reporting one address, and there's five out here that are reporting another address, and we looked at them and said they don't look like they're a home/work type address, we would be suspicious of that and we would follow up. So, I think that's one of the things that I would like to see the bureaus look into. Now, back directly to your question, okay, your question about notifying people, I believe that's the law in California, starting in is it next July that all address changes to all credit grantors?
MS. FRANK: No, it didn't pass.
MR. SMITH: I understood that it did pass, and we are going to comply with that, because we think that that's a good idea, and we think that's a good idea for across the country. We think it's a good idea to send -- I don't understand why it was defeated. It sounded like to me like it's a -- it would be a good law to follow.
MS. FOSTER: Stuart, do you want to briefly jump in here and then we have to move on.
MR. PRATT: Yeah, address management, Mari, as a whole, is a part of our discussions. You're right, it's both trying to -- I'm not sure, by the way, we're building our databases based on inquiry data coming in, we build our databases based on tape data coming in from the suppliers when the credit account has been opened. So, we're not just loading in an inquiry, I don't believe, just because the inquiry data is coming in. So, just to clarify that. But with regard to address management, it is on the table for continued discussions, but it is part of the competitive world of these big three companies, it's also part of trying to manage the large volume and make sure that you somehow identify the right pattern where it's different and where it it would be a victim's circumstance. It's out there, Mari, but it's a big chore working through that one.
MS. TERRY: And, Stuart, if I could add, again Diane Terry, we have several alerts right now if the input address differs from the one on the file, you know, that alert is given out. It in itself alone, you know, it should not be taken as fraud, but it is a red flag that the credit grantors should be looking at it more thoroughly. Keep in mind, you know, that many of our consumers use home address, they will use a P.O. box or a work address, a student goes off to school, we may now have a temporary address. We have elderly that have two residents. So, it's very complex, but we are looking at any way that we can do a better job in assisting the fraud victim. We have another alert system that mail drops, those are typically used by criminals. All of that data is added routinely and daily to our fraud alert system so that again another alert is given out so that the credit grantor can recognize again here's a red flag, take a look at your application, take a look at your consumer.
MR. PRATT: Also, our challenge is to make sure, and we're actually exploring this with the Postal Service in terms of their system. For example, victims of spousal abuse don't necessarily want a card going back to the previous address saying we know you've moved, is this your new address. And so then do you send a card that just says generically we know you've moved, have you changed your address. And then of course in the context of fraud, does that just simply spur the perpetrator forward to say I have other identifying elements, so now I can call back to the credit bureau and say well, no, I haven't moved, I am at this old address, here's all of my other identifying information that validates who I am. So, one of the challenges is to make sure that we're not just thinking we're solving the problem, there may be a difference in behavior between just a generic Postal Service kind of service versus somebody who has economic motivations to continue to perpetrate a crime. We've got to stop the crime, but we've got to do it with the right tools in place, Mari. That's one of our challenges right now, and we have heard from individuals that there are concerns like that.
MS. FOSTER: Regretfully I think we have to move on to the one-stop shop or we won't get there. As I explained previously, the proposal is that there would be one phone number, be it to one of the individual agencies, or to the identity theft hotline run by the Federal Trade Commission, 877-IDTHEFT, that would effectuate a fraud alert for a victim at all three of the national consumer reporting agencies. And I want to address this first to the victims on our panel in terms of if you could put in your mind had that been in place at the time that you began dealing with identity theft, can you give us an idea of the importance of that initiative or how it would have helped you, or if it would have helped you.
MR. GREER: In my case I think it would have helped an awful lot. Would I have depended on that solely, no. I've been so proactive in chasing down all of the different accounts and all of the other issues that I have contacted each of the agencies as well as all the creditors and their companies that have made inquiries on my account. So I would have used it just as a third avenue, if you will.
MS. FOSTER: Eric?
MR. GRAVES: I guess if I had known, I would have put it on immediately, too, but I also wouldn't have stopped pursuing what other activity was going on, just like he said, and however, maybe if I had applied this alert first off, it would have been more credible to the, you know, reporting agencies, too. Because when I first started reporting miscellaneous incorrect data, you know, they did ask for ID, but maybe they wondered why there wasn't any alert on it to begin with. I mean, maybe there should be some procedures internally there, too. If there was a fraud alert, then other things -- it's not good to make assumptions, but at least some things would piece together. So, I wasn't aware of that, like I mentioned at the prior morning session, that that fraud alert was an option to us, until actually the spring. And if it was in the material that was sent, I guess I didn't take it as serious as I thought it should have been, and it wasn't -- I guess regarding all those reports, some of them are text oriented, so as a result you don't know what's important and what's not. So, you really have to read every word. And be that as it may, we didn't report it until later, but no other activity was put on during the course of the two years, either, so that was positive. But if it had been the other way around, I would have regretted not putting it on earlier. And if there was one place to give all the information and have it put on all three credit agencies, that would have been the way to go, because we had to do different things for all three and it was time consuming.
MS. FOSTER: Nicole?
MS. ROBINSON: Yeah, it would have been helpful for me, although as I stated before, the fraud alerts didn't do any good. The victims -- the criminal, in my case, I'm the victim, the criminal in my case was able to open three other accounts even after the fraud alert was placed on my credit report, but it would have been good for me not to have to spend two and three days just trying to place the initial alert.
MS. FOSTER: Having heard that, and I would like to ask the consumer reporting agencies and Barry as well, and the rest of the panel, this is a proposal that has been around for a while. It was talked about at least back in March, but perhaps before that at the Identity Theft Summit, and we would like to move forward on it. We have a break-out session tomorrow specifically to address the hurdles, and I'm hoping we can identify now in this session what we're seeing as the hurdles, why haven't we moved further up until now and what can we do now to move further on this important initiative?
MR. PRATT: I think I can give you at least part of the response, and that is that one of our concerns as the consumer reporting industry is that once you have contacted us you have begun triggering a series of duties we have under the law. And I don't want to make the law a reason as an -- I don't want to make the law an impediment to doing the right thing, but keep in mind that even in trusting the FTC and saying we're going to do the following, and then the consumer misunderstands and thinks they've submitted their dispute, along with the fraud alert, so now there's more confusion rather than less confusion. So, keep in mind, what you're suggesting is to re-orient the system away from the first three calls. Now, we ought to make sure that those calls get you through quickly and efficiently to the people that you need to speak with. I think that's the point that was made very clearly in the first panel. We've agreed in our initiatives that we will simply load a -- if you just leave your name and information and say I've been a victim of fraud, with no additional validation, on a voice mail system, even on a weekend, we will load the alert, we will opt you out of prescreening and we will send you your file, you know, we will get it in the mail within three business days. We have done that because we have heard consumers saying we want to escalate, we want to have assurances certain steps are taken quickly and efficiently. We don't want to be an impediment, but we do have certain duties under the law, and it's just difficult for us to know whether cycling through the FTC, consumers will assume our duties to have been triggered at a particular point or not.
MS. FOSTER: Well, the FTC, speaking on behalf of my own organization, has a long history of consumer education. I think we could take up that challenge of making sure that when consumers call us, as we do now, that they get the right story and they understand what the process is, if we could get the process in place to work. The second thing that you mentioned is something we wanted to talk about on the fraud alerts and didn't get to, but if you are placing an automatic fraud alert, if you're calling as you're saying and leaving a voice mail and your information by virtue of identity theft doesn't match what is in the file, we have consumers repeatedly telling us well, I called and tried to place the fraud alert, but it wouldn't take, because the fraudster's information is what's in my file, I can't verify anymore with the consumer reporting agencies who I am.
MS. BENNER: I think something that would help that is just to get a live person on the phone when you call a credit bureau. A lot of victims that I have spoken to say I go through, you know, number after number and I enter all my information, I don't know what happened because I'm not talking to anybody, any real person, and while I think one-stop shopping is a wonderful idea, I understand there are problems with funding that sort of a system. I think the first step is definitely just to make sure that the credit bureaus always have a live person on the phone to deal with victims once they call.
MR. McKEE: I would like to agree with that. When we had the one member of our staff that tried to go through the process, she was pretty specific when I was brainstorming with my other staff members that she really didn't get to deal with a live person except at one place. And she found that to be very confusing, very difficult, even though we give out information, we have brochures about identity theft. So, though she doesn't work specifically on the fraud issue, she had ready access to all of the information about what she should be doing. She herself had a problem caused by the lack of communication, and the inability to make a direct contact with anyone except at Experian.
MS. FRANK: Not Experian.
MR. McKEE: If I can expand on that. We were lucky in that one of our staff members is on a board at Experian, and so there was another traction method there.
MS. FRANK: You do not get a live person at Experian.
MR. GREER: I was in a situation where just this last August, my -- the whole ID theft began for me in March of '99. In August of this year, I tried to get all new accounts from all of the -- all new reports from each of the agencies, and I don't remember which one it was, but they've got an automated system where you enter in your address and some other information and then they automatically mail you the credit report. Well, the fraudulent address was in as my current address, and I could not talk to a real person, and I was asked to leave a voice mail message with all of my personal identification, which I will not do, but what I did leave is my phone number at home and at work and said that those numbers matched the numbers on my security alert, please call me. It's a way of verification. My call was totally ignored. I got nothing. Ended up searching for a few hours and making dozens of phone calls and I ended up going in through some of the business offices down in I think it was Georgia, and I got transferred and I just worked my way through until I got somebody that could actually help me out. They grilled me, which is the whole purpose of the fraud alerts in the first place, and when they finally said, I mean they're asking -- not only -- one of the accounts, they asked when I obtained it. They wanted a month, day and year. On the card itself, you have the month and the year. I haven't a clue what day you get a credit card, and I doubt that there's any person here that can say that. And I pay off the balances every month, so I couldn't say what my balance was on one particular month or another. The person on the phone finally said the reason I'm putting you through this grilling is the address isn't matching, and then it clicked, and I said okay, if the address isn't matching, you either have this one, that one, this one, or the other one. And I heard on the other end of the phone yeah, yeah, yeah, my real address was four or five addresses down, and once I got that established, everything was very well established and worked through. But -- getting through that stage is very, very difficult.
MS. FOSTER: I wanted to give Maxine and Robin a chance to jump in here and respond.
MS. HOLLAND: What we at Equifax really believe, we understand how difficult it is for fraud victims to go through and do everything that they need to do, and so what we do is give a special number to credit grantors, so if the consumer has notified the creditor grantor before anyone else, the credit grantor can give them an 800 number that allows them to speak to a live person. It is not a long BRU system, it says you can give an alert or press 2 for a live body. So, we recognize that, and I think I would like to point out, as Deborah said this morning, I think there's always areas for us to improve. I think it's getting better, but are we where we need to be? Absolutely not. And we want to work together, because not one entity is responsible for identity theft, and not one identity is going to solve it alone. We must, must, must work together.
MR. McKEE: I would like to suggest, though, that that number not be given to the credit grantors, but should be made more publicly available. Many times consumers are getting turned down for credit, that's when they request the credit report and discover that oh, my God, I don't have all -- I didn't have all of these accounts, I didn't request all of this stuff. But the credit grantor, when they turned them down, didn't realize it was a case of identity theft, the credit grantor turned them down because they had too much credit. And so this phone number isn't making it to the consumers.
MR. PRATT: Well, when the consumer has been declined and if they have gotten their file, then they do get a number with live personnel available, so at that point they do have live personnel.
MR. McKEE: But often --
MR. PRATT: I'm not saying it's the whole solution, Philip, I'm just saying it's a question of let's make sure that we know in the right order when a consumer has acces to personnel.
MR. McKEE: I agree, but unfortunately the live personnel at the dispute, at that line for when the person gets turned down for credit, are not always the best trained on ID theft. And we do have, we have heard lots of problems on that, because they get told, they're telling me this is my credit problem, it's not my credit problem, my credit has been stolen. And they are not getting to the right place in the reporting bureau.
MS. TERRY: If I can add to that, at Trans Union, we have been working in credit fraud many years, but in 1992, we actually had a group of dedicated associates that are familiar with that type of crime, and very familiar, deal with it day in and day out. We have 800 lines that go into this unit that over 100 associates that are there to talk to consumers. Further, to, you know, we certainly are looking at any way that we can assist the consumer victims in a better, more accurate way, but right now, we do feel, and I'm convinced of it even more hearing some of the victims speak, that allowing them to talk to an individual, I mean immediately, is the most satisfying and timely way that we can help the victim.
MR. GRAVES: Could I interject something?
MS. FOSTER: Sure.
MR. GRAVES: In terms of that, my son was turned down for credit for a used car loan, and it was turned down by Trans Union, that was the credit reporting agency that Lockheed had used at the time, but we couldn't get to any people, you know, it was all still a menu driven thing, and because that's the time that we first got notified of this, and he was only 19 at the time. Granted, I'm sure that your databases don't really check on age, but, you know, why didn't we -- this goes back to address changes, why didn't we get notification of this spurious address in Georgia where there wouldn't have been any traces for that social security number, or why didn't we get any kind of notification that I was listed as my son's spouse. You know, some of these kind of things would just be a little proactive to help in eliminating some of these things.
MS. FOSTER: Maxine, did you want to respond?
MS. SWEET: Well, we are at this point automated, and the good news of that is that it makes our number available 365 days a year, you know, seven days a week, 24 hours a day kind of thing. We, too, recognize that we still need to improve the access, especially when the automated system fails. But I would also point out -- well, another point is that we only have the one number, so no matter where you get referred to us, you will always have the fraud option or the option for all the different situations that you might -- why you might be contacting us. And then -- I lost my other point. Oh, the other point I wanted to make is in terms of one-stop shopping and how do people know and why do they only have an alert on one file. We also, several times have mentioned that we send out advice and information and tips to victims, and that's part of the information that we provide is to refer victims to the other two credit reporting companies so that they do know that they should contact them and get alerts on as well.
MS. FOSTER: And that's also a part of what the Federal Trade Commission has done with its hotline, when you call here to get information or to file your complaint with the Federal Trade Commission, in addition to telling you you need to place these fraud alerts, we do provide the information on consumer reporting agencies and how to contact them and the other steps that you need to take. So, those sources are available. I want to go back to the floor, we only have a few more minutes left, so I am not going to get to everybody and I apologize. Let's go all the way over here on the left.
MR. CARMODY: Frank Carmody from the New Jersey Division of Consumer Affairs. Have the credit reporting agencies had experience with phony claims of ID theft? In other words, just for that person to perpetrate things where they've gotten credit and don't want to pay for it type of things, and also, how much have they found collusion with the credit grantors in putting phony applications, let's say, through in order to gain credit for someone else on that side as to finding out that the actual, let's say loan company or jewelry store or something, employee is doing it.
MS. TERRY: Diane Terry, Trans Union. Yes, we do get, you know, fraudulent documents. We've received fraudulent police reports as bold as the criminals are, they have no problem doing that. The collusion, that would be a very care rare unusual situation, typically that's not the case at all in identity theft.
MS. FOSTER: Robin or Maxine, do you want to add to that?
MS. SWEET: Yeah, I checked, and especially like in California with the police report, the estimates are maybe as much as 10 percent of those are fraudulent. So, just it opens the door.
MS. HOLLAND: We do get some of that as well, but we have a special unit within Equifax that handles those type of things and I really wouldn't want to comment on what we do to pursue that, but just as Diane said, we really don't have any knowledge of collusion.
MS. FOSTER: All the way in the back on this side.
MS. LEWIS: Janice Lewis from the U.S. Postal Inspection Service, the victim witness coordinator. My question is, are you standardizing or thinking about standardizing processes for law enforcement agencies? I had a situation where some victims were contacting the credit reporting agencies and they were -- some of the agencies were asking for case numbers or complaint numbers and other agencies weren't. So, are you trying to standardize processes for law enforcement agencies? Also, real quick -- that's fine.
MS. FOSTER: So, the question is standardizing processes for law enforcement communication? Diane?
MR. PRATT: Let me just respond on behalf of the industry and that is that I think it's a great suggestion. We have been in touch with the Postal inspectors in a couple of regards. One of which is to help with the effort to educate law enforcement about the need to issue police reports and about the need to investigate the crime and what are some of the criminal statutes that are out there on the books today. But as an extension of that, I think it's a great suggestion, that if we can work in our fraud areas to make sure that we're asking for the same information and there's consistency there, that seems to be exactly why we have this task force in place within our industry. I don't know if individually the members have anything to add.
MS. TERRY: Well, Mari had mentioned the California law relating to police reports, and I do know at Trans Union, long before that law existed, the police report was still a very vital part of information that was supplied to us by the consumer victims. So, we've been looking at police reports, you know, for years. But certainly the police report and the California law changed our process, and we do accept them nationwide. It can be a Postal report. We know Postal inspectors, we deal with them, you know, on an ongoing basis as well, in the area of identity theft.
MS. FOSTER: Any questions? Right back here.
MS. NEWHOUSE: Joan Newhouse. I'm not clear as to who is responsible for the initial notification of the victim, and to give a quick antedote, which is similar to what Eric's experience was. I was speaking with a gentleman who was denied credit from a banker that he knew and had known for a long period of time. He then asked for his credit report and found that there was another gentleman who had the same first name and whose social security number was one digit off. This gentleman lived in Houston, the person I spoke with lived in the Dallas area. They had different spouses, different addresses, different dates of birth, the only thing that was similar was their first name, and their social security number was one digit different. And yet he had never been notified until he was applying for a mortgage on a second home, and this friend of his who was a banker had said this fellow is on your credit report.
MS. FOSTER: So, your question is at what point does a consumer get notified of --
MS. NEWHOUSE: Right, and should there be some responsibility if the person who picked it up, I mean there was -- that would have -- it was a mistake, it started as a mistake, and somehow their credit reports were merged, yet this person who had -- was the one with the good credit and the other one had very bad credit, was never notified by anyone that it had happened, even though they didn't even have the same last name. They did not have the same last name, the same spouse, the same date of birth or the same address.
MS. FOSTER: I think this takes us a little further afield from identity theft into what the bureaus I know refer to as a mixed file problem, which is something that they work on and have different processes to identify those types of anomalies. Do any of you want to speak to that?
MS. TERRY: Yeah, I would think that sounds like someone with very similar identifying information but not credit fraud as we're talking here on identity theft.
MS. NEWHOUSE: But whatever the notification process would be would be the same type of notification process that should apply to an identity theft victim.
MS. FOSTER: It's a little different, because usually the onus is on the consumer when they discover that they are a victim of identity theft to identify that to a consumer reporting agency, which may not necessarily know that this information is anomalous or they think that one person has several addresses or that kind of thing. So, it is a little different in the respect that if it's not, you know, a fraud situation where a consumer has been notified by multiple creditors that there are multiple fraudulent accounts, that the consumer is usually the first person to know. So, they are the ones on the front lines saying to the consumer reporting agencies, this is a problem. So, in your situation, they found out because an alert creditor realized that there was this anomalous information, but unless it's picked up that way or by the consumer themselves checking their credit report or through some sort of anomaly package, there's no way, you know, that's the first --
MS. NEWHOUSE: So, there's no proactive mechanism?
MR. GRAVES: Yeah, that's the problem, I think. I mean there's enough technology out there to parse data and compare what's what. I know there are all sorts of ramifications, especially like the one that was cited like spousal abuse and stuff, you certainly don't want information going to the wrong sources for those kind of reasons, but you don't normally get notified of this until you're in a crisis, it turns into a crisis mode. You're trying to apply for a home or you're trying to get a car loan. All of a sudden it's all stymied and you have to go 360 degrees around and then you have to fight this as well. So, I don't see why it isn't really the same thing.
MS. FOSTER: That is a topic that needs further attention, I think, and in terms of being able to monitor credit reports. We suggest that the Federal Trade Commission recommends that consumers check their credit reports at least once a year and be very rigorous in that check for any information that doesn't look right to you, inquiries that don't look right to you, accounts that you don't recognize. But as Stuart mentioned earlier, there are also processes that work where there are packages that can recognize those types of anomalies and to be able to get that information readily to creditors is, I think, really an annual goal would help a lot. I am afraid we have to stop now. We're already over our time for our lunch break. We will be reconvening back here at 2:00 for the panel 3, which is on credit information furnishers, and these topics that we have discussed here, particularly one-stop shopping will be explored in more detail tomorrow during the break-out session on one-stop shopping.:00, please.
(Whereupon, at 12:40 p.m., a lunch recess was taken.)
AFTERNOON SESSION (2:00 p.m.)
MR. STEVENSON: I think we're ready to start again. If everyone would like to take a seat, we would appreciate it. We're ready for our next panel this afternoon. Before we start that, though, I just wanted to mention a couple of things. Just a couple people said that a lot of this is about raising awareness of what's happening, and I wanted on that subject to make sure that everybody was aware of the brochure that's in your pamphlet that you received this morning When Bad Things Happen To Your Good Name. This is something that we at the FTC have handed out to ID theft victims and that other institutions have also handed out to ID theft victims, and we just want to emphasize this is available to be reprinted and be handed out by your organization. We can get you copies, Photo Ready or on ZIP Drive to get copies made, and we would suggest this is a really helpful first step to provide to the victims, and I just wanted to make sure that we didn't fail to mention that.On the subject that came up this morning, I think Mari mentioned the importance of making sure the law enforcers were aware of the information that's available to them when consumers provide it to us, and we would encourage any law enforcement people with interest in finding out more about that to contact us to (202) 326-2913 or by Email to Sentinel@FTC.GOV, S E N T I N E L to FTC.GOV. And finally, for consumers reaching us, obviously we would encourage you, if you have an identity theft complaint, to call 1-877-ID-THEFT or also visit us at the web site WWW.Consumer. Gov/IDTHEFT.With that brief commercial message over with, we'll move on to panel three, Clearing up the Victim's Credit History, and this is moderated by Betsy Broder, Assistant Director from the Division of Planning and Information, and also Bill Haynes, who's an attorney in the Division of Financial Practices here at the FTC.
MS. BRODER: Thank you. And did I mention that our toll-free number was 1-877-ID-THEFT? Thank you all for being here. The earlier panel this morning addressed the issues with credit reports, cleaning up erroneous reports and other mischief left by the identity thief. We're now going to go a little bit earlier in the process for identity theft victims and talk about how the victims report identity theft to creditors and to law enforcement. Our consumer education material that Hugh referred to advises consumers to do three things immediately upon discovering that they're victims of identity theft: First, contact the three major consumer reporting agencies; second, contact each of the creditors or other entities where a fraudulent account was opened or where your identity was corrupted; and finally to file a police report.We're going to focus on the second and third of these issues this afternoon and ask if currently these practices are accomplishing all that they can. As to the creditors, are they gathering all of the necessary information? Are their practices user friendly? Can it be made easier for the consumer, and are there opportunities to expand the use of the information that is given by the consumers? We're not the first to ask these questions about streamlining and to suggest that there are easier ways of reporting identity theft to creditors and financial institutions. As Jody Bernstein noted this morning, this has been a subject of legislative proposals, both in the Senate and in the House, and there was one proposal that called upon creditors and the consumer reporting agencies to draft a model fraud declaration and establish model protocols, and if they were unsuccessful in doing so within six months, the Federal Trade Commission would take on that obligation. I say let's beat them to the punch. Let's do it ourselves. We have distributed to everyone a copy of a model fraud affidavit. It's in your packet. The participants in the panel and some other folks have had this for a few days and have given some clear time and thoughtful attention to this document, and so in the second half of this afternoon's session, we'll go through this model fraud affidavit and talk about what it does, what it doesn't do. We take no pride in ownership, although a lot of work has gone into, thanks to Helen Foster, but what we do in this process is look to fraud affidavits that are currently being used and to lift out information that appears to us to be critical for the financial institutions and try to trim that down, consolidate, and we would look to you for your comments and hopefully and ultimately your buy-in to this system so that a consumer, a victim of identity theft need not fill out a different fraud affidavit for each creditor or financial institute. They would fill out this one form, attach their supporting documentation and send it to everyone. But let's talk about the other point here which is reporting to law enforcement, which is very important. We heard about it this morning. What is law enforcement doing to take these complaints? What are they doing with the information that they receive from victims? Can they help victims in reporting this fraud? What are police best practices in dealing with victims of ID theft, and what about law enforcement that still does not see a consumer as the victim of ID theft but still focuses only on the financial institution that may have assumed most of the financial loss? I'm confident that we can address and make meaningful progress on these issues in the next two hours or so. We have representatives from -- key stakeholders in this discussion, from banks, from creditors, law enforcement, and we also have the guidance from victims, from consumer advocates and others in this area.So to this point I would like to introduce our panelists, and let's get to work. Starting on my right, your left, our report performer Joe Genera who is a victim of identity theft and hails from Connecticut. Next to him is James Fishman, an attorney from New York City who has represented victims of identity theft. He's with the firm of Fishman, Neil & Armentrout. Nicole I don't see, but Linda Foley, who has confounded me by moving her space is the executive director of the Identity Theft Resource Center. Oh, my goodness, why did you do this? Jim Flynn next to Linda is with the Bladensburg Police Department and also is a key member of the International Association of Chiefs of Police.And Judith Welch sits next Thompson. She's an assistant vice president of Chase Manhattan Bank, and to my right sits Patsy Ramos from SBC Services hailing from California. To my left is William Haynes, who as Hugh said is an attorney, an expert on financial and credit laws from our division of financial practices.And to his left is Barry Smith, the senior vice president for fraud, police and strategy with the Bank of America. Jack Jordan, no. Janine Movish is with, don't tell me, vice president of risk and fraud services, GE Capital. And who is sitting to her left?
MR. JORDAN: Jack Jordan.
MS. BRODER: Thank you, and Jack Jordan is a lieutenant with the Los Angeles County Sheriff's Department, and I'm hoping that Debra North -- that looks nothing like Debra North, talk about identity theft, Werner Raes who is with the Anaheim Police Department and who is also a long time concerned person with the prosecution of identity theft.Is there anyone between him and Shannon McCallum? Yes, Debra North, a victim of identity theft who is helping us out today and seeing these issues from a victim's perspective. Next to her sits Shannon McCallum from Travelocity.COM who has taken a lot of initiatives to address ID theft as it affects his industry, and next to him Robert Cross joining us from National City Bank. What I would like to do, as I mentioned, is hold off on our discussion of the fraud affidavit until the second half. We will be talking for about an hour now. We'll take a break and then reconvene and address the model fraud affidavit. I would ask people when they talk to identify themselves by name, please. We have a new court reporter, and it would be very helpful for her if she could get all the right names in the record. I would like this panel to be as conversational as possible. I would like to see interaction between the members, to the extent we want to hear from you in the audience as well, but I would ask for the audience to more or less hold off until we can sort of develop a momentum on our own on this panel.So I would like first to start out and ask the question generally, and I think among -- directed mostly to our creditors sitting on the panel of what you found to be best practices that have been adopted by your company for taking fraud reports and proving the fraud for identity theft victims and maybe, Barry, I will open up with you.
MR. SMITH: I would be glad to. We see disputes about identity theft and fraud applications coming in from several different ways. The most common seems to come in from our collection folks, when they place a call to somebody and say, "Where's our payment," the people that can't make a payment turn around and say, "I don't think I ever applied for that card, that's not my transactions, I'm not responsible for them." Well, we've wrestled with this within the bank going back and forth about just what do we do. Here's a dispute. How do we resolve it as quickly as possible and get back on track doing the day's business and yet handling things correctly for the consumer? The process we came up with is we pull a copy of the application. We attach a questionnaire to it, and we send it to the customer with a letter that says, Please review the application, comment in the questionnaire about the information on the application, send it back to us within 30 days, and if you read the application and you recognize the information as being yours, then you don't have to go through the problem of sending it back.0 days later we'll resume collection efforts so we will expect that you will have started to pay your bill.We found this process to be very well received by our customers, and we get back a tremendous amount of investigative information. People tell us that they did live at that address. They tell us the name of the people. They tell us this may be an ex significant other. It may be a friend that lived with them for a little period of time that's gone out and applied for credit in their name. In a lot of cases they just own up to the fact that -- or don't really come back to us and tell us, but they just accept the fact that the application is really theirs. 60 percent of the documents that we send out this way are just accepted by the consumer, so that means that more than 50 percent of the people that are telling us on the phone that they don't recognize the account, they have nothing to do with the account, once they see the application, they accept responsibility for it. Now, of the people that send it back to us and say, "I had no part of that, however here's the person that did," this is still a fraud application, and they are usually pretty happy to tell us how we can get in touch with that person, especially if there's been a relationship in the past and they know where that person is today. Once we get that information, then we can either go set up a billing account for the second person. We can start collection efforts with them. We can clear the bureau for the primary person that's on the application if in fact they had nothing to do with it, and everybody can get back to their normal business. In the cases that we get the dispute back and then proceed to find the other person to get them to take responsibility for the application or the debt, about 50 percent of the ones that are returned to us, we actually find the other person and resume collection efforts with that other person, so that kind of skinnies the number down quite a bit.The other place where we get our applications are, of course, just normal consumer disputes coming to us because they found something on the credit bureau, and they've contacted us. In those cases we do the same thing. We pull a copy of the application, send it to them with the questionnaire, and we get back a tremendous amount of leads and information also through that source.So I think that if there's something that Bank of America feels that they're doing right in regard to this dispute process, it's just this because we are giving the people the information, and we're letting them make the decision about whether or not it's fraud.
MR. FISHMAN: I want to commend Bank of America for that practice because I think you're the exception. Most of my clients have a very hard time getting the application when they ask for it when they've been a victim, and often that can clear up the problem very early on, and I think Bank of America may be the exception in that area as opposed to certain other banks.
MR. SMITH: Thank you. But let me ask you this question: If you can't provide the application, then how can you continue with collecting the debt?
MR. FISHMAN: I don't know that it's an issue that they can't. It's that they won't, and I don't know why they won't because it seems to me that your rationale of giving the application is a sound one, and it should be one of the first responses when somebody says, Fraudulent activity or not my account because often I've seen -- finally sometimes it takes litigation to get the application.And when I see that application in litigation, I say, "Well, they didn't even spell my client's name right, and if we had gotten that application long ago, we could have cleared this up long ago and we wouldn't be in this lawsuit now."
MS. BRODER: Let's see what the other creditors are doing. Thank you, James. Patsy, am I right, to SBC Services, what is your process?
MS. RAMOS: We're a telecommunications company, and our process differs depending on what region. Currently we've used the opportunity of merging companies over the last few years to go in and take a look to what the existing processes are in each of the regions and to try to pull out of there what is best practice.And what we're aiming to do is to reengineer the process to take in what we learn from the work being done here and to centralize the claim handling for all of the three regions. So what do we do today? Basically, although the processes differ, when we get a customer that calls us to tell us that they have no knowledge of the telephone debt on their account, we ask them to provide proof of residency during that period of time. We do ask them in the states where they can place a police report to do that, and we ask them to sign the affidavit, send it to us so that we can exonerate them from the debt.
MS. BRODER: Do you provide them with copies of the application for the account or any of the documentation about the account?
MS. RAMOS: That's a good question, and I think it's probably typical for the telecommunications industry that the service application is done over the phone, and it's not done in person.
MR. FISHMAN: Sometimes there's a tape --
MS. RAMOS: No tape.
MR. FISHMAN: -- over the phone.
MS. RAMOS: No, no tape, and so there is no application to provide the customer, and it also brings up a question that we're kind of struggling with right now. When a customer comes to us and says that I have no knowledge of this account or we identify that they're serviced to a different address and they become aware of this, they want the information regarding that fraudulent account to try to understand where was the service installed, what was the telephone number.And we're struggling with whether or not -- because of privacy issues and also because of risks of whether or not that's information that we want to provide to the victim of identity theft, our concern is that they may want to go by there and confront the person which could be a problem.
MS. BRODER: I'm moving to the online world, Shannon, what do you do to Travelocity?
MR. MCCALLUM: You bet. We're kind of unique, the Internet is. It's growing every day. We don't actually issue credit. You dial in or you go through your web browser to our site. We are a web portal so you use your Internet service provider. You come to us looking for airfare, hotel, rail, et cetera. We provide a list of those services. We take your transaction online, pass it through to that actual carrier, for example. What we see is identity theft left and right, hotels, rental car agencies, et cetera, et cetera. Your information is mined there. Usually they have the right to have that. They are a merchant. They've already verified your billing address, and perhaps you're open to buy. We say, "No, you have a little bit more left." They come to our site or any of the Internet sites, and they establish a profile to conduct business, and they pose as you and in turn book a flight for themselves or somebody else who needs to fly, and most of those flights are related to other criminal enterprises.To this time, when we do find out that a flight has been booked through ID theft as far as use of credit card, we want to immediately -- because we can pinpoint people usually to a particular space and time, to an airport terminal, to a city on a particular date. We want documentation right then and there from the true credit cardholder, and we get that from the issuing bank. And we need something from you right a way that a police department will take, and we've been very successful with this program, with the port authorities, with the airport police, with the federal agencies if it's an out of country, and we're to 100 percent prosecution right now.
MS. BRODER: It seems to me a pretty fast turnaround for a consumer to realize that their account has been accessed in order to obtain travel.
MR. MCCALLUM: It is, absolutely.
MS. BRODER: And you're able to be there at the gate to welcome the traveler home. How often is it that a consumer would be aware that quickly?
MR. MCCALLUM: Probably one out of every five, but we still feel like that's a good rate, and we're trying to increase that every day. Being an Internet company, there are certain Email accounts that you can just imagine that are only used for fraudulent purposes. They get to us by using an IP address which is a definite string of numbers. We report that to the ISP security department at the individual Internet service providers. We do everything that we can. It is literally a net that we throw out. I try to catch as many people as we can. With that in mind, we need something, either something that's been provided to the issuing bank as far as an affidavit or we have a little to go by form that we hope to replace with something more permanent.Once I give that and it's notarized, most police departments, with us also being a victim, and under UCC since we do not collect a signature, it's all on us so we are a victim, and we will send in a statement usually from my office backing that up, and then we can do the apprehension after that point.
MS. BRODER: I would like to call on some of our victims. We've heard a lot of discussion this morning already on barriers that you encountered in trying to establish that you were victims of identity theft, but I wondered if you could point to any best practices that you encountered also, companies that you called or entities that you dealt with where you said, Finally they get it, and they're responding. Joe and Debra?
MR. GENERA: It seems like we've had the most success with companies that did what they were supposed to do, immediately sent us a fraud affidavit. We filled it out, sent it back, and very soon thereafter they went away. The toughest one we had to deal with was a credit card that for a year and a half I mean literally on Saturday afternoons would call us up cursing, their collections department call us up cursing, swearing. We're like, We're not even supposed to be talking to you, we're supposed to be talking to your fraud department, but eventually even they went away. Again I think it's pretty much the ones who listened and also did what they were supposed to do as far as providing a fraud affidavit, have us fill it out. We got them notarized and sent them back, and for the most part I believe there were five of those that went away cleanly. There were three that we contacted initially that we've never heard from since, but they have disappeared for the last few years, so we don't know -- what worries about that is that they may come back to some point as some creditors do, will come back at some point, either show up again on the credit report or start hounding us for the money. One of them we're talking about, we got cleanly out from, we have actual letters from them, yes, this is a fraud account, we won't be bothering you anymore.
MS. BRODER: I'm going to ask people, we're kind of squeezed in here, but we need both mikes in order to be picked up. How long was the process for those banks or entities that had good practices and got back to you?
MR. GENERA: The first three legitimately went away -- I believe we notified in November, they went away by January or February, so three -- about two or three months. Average for the good guys were about six months, and the worse one that did go completely away was about a year and a half maybe.
MS. BRODER: And Debra, I know that this is a fairly recent occurrence for you, but were there any times where you called a bank or creditors and you said that they were very responsive, and you could describe what some of those practices were that they helped you with?
MS. NORTH: Right. It's only been two and a half months, so I don't think I've given it enough time to get the complete response, but the customer service department is friendly enough and they take your information, but as far as forwarding you to a fraud department and finding out that they're actually following up with it, I had one creditor who took the information and said they would take care of it, and I said, Please send me a letter confirming this discussion.And they sent me a letter, but they addressed it to the other person, so that was upsetting, and it just continues to -- I don't think they really get the picture or listen to the story sometimes, and I think the fraud department and these institutions could really be worked on.
MS. BRODER: Were there any other thoughts on best practice? James.
MR. FISHMAN: Yes, one that I think you touched on briefly is whether you get hooked up to somebody in the customer service department or the fraud department makes all the difference in the world, but one thing I hear all the time from clients is that every time they have to call in, they get to deal with somebody different from scratch and start all over again from the very beginning. For some of the people who have maybe the more severe cases, I don't know, but if they were assigned a fraud assistance person in the fraud department who knew their problem from the beginning and they didn't have to go over it every time, who they could get a direct line to and not have to be on hold for 20 minutes or so, that would go a long way even just to give the consumer a sense that they are helping them and not feeling like just a number.
MS. BRODER: Robert Cross, what do you think about that?
MR. CROSS: Well, we have a distinct advantage of being a relatively small credit card issuer with several million credit card accounts, and we do that. We assign a case worker in every case that comes up, and they work the case and work with the consumers. They also have affidavits customized for each type of fraud. We've got for account take over, you wouldn't necessarily want to provide that information, and you do have to be careful and make sure you're not conversing with the wrong parties, so it's always a challenge.
MS. BRODER: Let's talk about that.
MS. FOLEY: May I jump in for a minute?
MS. BRODER: Please do, Linda.
MS. FOLEY: Linda Foley, and besides being a victim advocate, I'm also a victim of identity theft. For those who don't know, my employer stole my identity. The information I gave her in terms of employment was what she took and used to buy her credit cards and cell phones. I found out quickly because Citibank VISA called and wanted to confirm a change of address which got me on the process. The only way I found out who was doing it and I found out so rapidly was I was able to get an application form from First USA. that was how I could point to the person who did it. The police were out there with a search warrant within three weeks. It did end in conviction, and she was eventually -- she is a convicted felon now out on probation unfortunately. You would always like to see more, but the idea of getting an application, and we're going back to that again, is so important. The one group that I couldn't get an application from or any information from and I had to argue and argue and argue was Pac Bell, which again is in the telecommunications area, and I hear it over and over again from victims. It's almost easier to get an application form, whether it was given by telephone, by the Internet or by mail, from a credit card company than it is any company in the telecommunications industry, so that is a concern. I do think they need to see those application forms. First USA did have someone who worked with me step by step. When I had problems, I simply called back that exact same person, and I said, Hi, it's Linda Foley again, I've got a problem. They pulled up my file, and I didn't have to spend ten minutes explaining the whole thing again. I have a sheet back there, and I think we need directed victim assistance personnel all the way down the line from the credit card companies, the credit reporting industry, the CRAs, law enforcement. We need someone who works with these people. It doesn't have to be everyone. Some cases can be handled easily, but on these worse case scenarios, they do need that assistance.
MS. BRODER: It's interesting. We've heard this several times today that if consumers were only given access to the application form, it would really go a long way, and, James, you've mentioned that sometimes you've had to actually litigate to get access. How successful have those litigations been?
MR. FISHMAN: Once you get the -- just looking from a problem solving perspective, once you get that document and you say, Here's the signature, it doesn't match, it isn't even close, they didn't even spell the name of my client correctly, so the chances that a court is going to find that my client is the one who opened this account is pretty slim, and those cases tend to get resolved.But as I said before, it shouldn't have to go that distance. I'm sure that -- as an attorney I try to avoid litigation, I really do, because it's very often not in my client's interest either, but I find that I am often forced as the only -- the only way I can go to solve the problem is to go that route when my client has tried and failed and I've tried and failed. And it does raise another problem, which I want to mention, which is as an attorney we -- as the FTC has said that we are covered by the Credit Repair Act under the FCRA, and that makes it more difficult for attorneys who really want to help consumers who have been unable to help themselves, and that's something I want to throw out to the FTC to change so that it is easier for lawyers who want to help consumers to do that because what we're forced to do is bring lawsuits because that's exempt under the act, but non litigation resolution is covered by that.So that's something that would make it a lot easier for lawyers to help consumers who have been unable to do it themselves.
MS. BRODER: Thank you. I think I want to open this up a little more for our law enforcement participants too and to talk for a little bit about the balance between making it easy for consumers to report fraud but also making certain that they are bona fide victims and not simply people trying to get out of debt.So I think this actually encompasses all of us, whether law enforcement and private industry and our victims on the panel, but I would ask, Jim, if you have some thoughts on that and taking reports.
MR. FLYNN: Well, I'm an advocate of the police throughout the nation taking reports, the initial report from a victim. Sometimes we get a little lazy. Sometimes we don't want to take a report, but regardless, I've put it to my chief of police who has taken it to the International Association of Chiefs of Police. They are presenting it in November, I believe it is in San Diego, to make it a national policy. Don't know if it's going to happen. They're going to present it. It probably is going to take at least another year for it to become standard throughout the United States, but we are attempting to get that pushed in one direction, and that is for -- if you are the victim of identity theft or fraud, that you should be able to contact your local police department where you live and report that. We take accident reports. We take theft reports. We're not there when the theft occurs, but we take the report anyway.0 percent of the time we're not there when the accident occurs, but we take the report anyway. So there really isn't a reason why we shouldn't because it doesn't qualify as an actual crime to that point in time. We just want the report written that there is a victim, that the officer specifically met with that individual and that a report was written. Now, the flip to that for most people that don't understand is that that means that you are reporting to me that you're the victim of fraud. I really don't know who you are any more than I know who most other people are. So while I'm taking this report and everybody is real, real comfortable now that the police officer is taking that report, you want to keep in mind that the officer doesn't know these people that are making the report. He's only going to try to do the same thing that the banks and everybody else are doing, and that is look to some identification and things of that nature. If you have good false identification documents, passports, things like that, you could probably scam most of the police officers out here to a certain degree, so we're not the total answer, and why the bank would require a police report when the bank's not going to get a scope of the police report, they just want the number. I've been doing it for 21 years. I've gotten five requests from the bank regarding those reports, so why they want a number, I don't know, but they want a number. I personally believe that if that's what they request, they should get one. I also believe in the FTC's database, and I will club this forever, if you're the victim of fraud and you have a police number, a case number, report it to the database. And the reason why is because that database does 80 percent of the work that I used to have to do for the last seven years. I'm the guy that you're calling. I'm not -- not me specifically, but I'm the guy that you're calling, and if I can have a computer system who's getting all the information inputted into it by someone else and the only thing I have to do is access the information, 80 percent of my job is done. I can go out and catch bad guys all day long. That's what I do for a living. Sitting around talking on a telephone and asking if the bank has gotten an affidavit of forgery, whether you've sent us an affidavit of forgery and how many different credit cards were compromised, it really doesn't matter to me, the law enforcement officer, because I want to catch the bad guy. I already know you're the victim. I feel bad for you, but to ten o'clock tonight when you're in bed going to sleep, I'm the one that's out here hitting the door with a ram trying to get into the house to get the evidence to catch the bad guy. That's how I do my best for you, the victim, is to catch the bad guy. So the FTC database and their hot line number takes care of all of those problems that I've had to deal with for six years and that's, Feel sorry for you, try to help you out and get you in contact with the different credit reporting agencies. These are the type of things that that database does and that hot line does, and I'm a big, big strong believer in it. My best friend, who's a lieutenant from Metropolitan Police Department, two weeks ago became the victim of identity theft through scamming or through skimming his credit card. He was unable to get the information from the bank. He's a lieutenant for the Metropolitan Police Department, and I'm a sergeant. I make one telephone call. I can get everything in the world. He's a lieutenant, can't get anything. They delivered the product that was purchased with the card two days after the fraud was reported, two days after, and they wouldn't tell him where it was being delivered. So when you all start deciding that law enforcement is really going to help out and do all that, I'm going to tell you if you're going to deliver two things two days after the fraud was reported, I'm not going to go real, real hard on this case, okay? I've got 4,000 cases. People that really want to work them, I'll work with those. A bank's going to give the property away and come back three months later and ask me to go and investigate the case, I'm just telling you I'm not gonna, so that's where we wind up with law enforcement. We are trying to get the banks to work with us. We believe in the victim being the victim, not a suspect in the crime. We feel for you. We want to catch the bad guy more than you do, so what we want you to do is be very, very adamant with, number 1, law enforcement that you want just a miscellaneous incident report, just an incident report that says you're the victim of fraud or identity theft. That's all you want, just a case number, and then report that because now we have a centralized location that we can find the actual victim to the crime anywhere in the United States through the FTC database. I'm a big, big -- I push for it. I believe in it, so that's where we are. You've heard it from law enforcement because I'm the guy you're going to call. Like it or not, this is what you get.
MS. BRODER: I would just put in a plug and then we'll go to Joe that usually in our ID theft hot line, we receive about a thousand calls a week, and as of this morning Kathleen told me between 9:00 and 11:30 we received almost 200 calls, so clearly this is touching a nerve, and we know that. Joe, something to add?
MR. GENERA: Yes, I would like to ask a question, this is open both for law enforcement and the credit providers, credit grantors. It seems to me when we're talking about ID theft, that there are two crimes going on here. You have the identity theft and that fraud in and of itself which is a crime against me. But it seems to me the greater crime to times is going to be against the credit granter, okay. If Citibank or Discover is out $15,000, then they have been stolen from. They didn't take money from me, so if that's the case, I have yet to hear -- both talking to victims and our own experiences, I have yet to hear whether or not credit grantors are pursuing these perpetrators of these crimes through criminal or even civil means?
MR. RAES: Can I respond to that?
MS. BRODER: Of course.
MR. RAES: Werner Raes from Anaheim PD. I've been involved over the last 28 years, the last 15 years specifically in identity theft cases. I've spoken throughout the country, written numerous articles on this, et cetera. It's not a problem that we're going to solve in the room today, but it's one that I told the FTC director today we want to become aware of, and I want to share just a few minutes to answer Joe's questions in sort of a round about way the perspective from law enforcement, okay, because there is a little bit more to it than my esteemed colleague I think at the other end of the table shared with you, and I would like to share my perspective.There is civil and there is criminal law in this country, and a lot of what has been discussed openly today revolves around procedures, policies and civil wants and needs. We all want things. We all wish things, but unfortunately law enforcement is somewhat tied to a codified set of rules and regulations in each state called the penal code, okay? Now, we want to help victims. I'll bend over backwards to help victims. For the last 14 years I've been on a whirlwind talking tour talking throughout this country speaking to legislators, senators, everybody that will listen. However, being tied to the two of these codified rules and regulations, I'm here to say that this is not one stop shopping as far as law enforcement is concerned. I wish it could be, underline wish. It is not. We have two different crimes to deal with on almost every identity theft case, what we've referred to as the front end crime and the back end crime and, Joe, this kind of goes to where you're headed I think with your question. The front end crime is the individual, human being who is impersonated and had their identity stolen, and in California and most other states this is rapidly coming a law to do this. Right wrong or indifferent, that law is usually a weak misdemeanor version. I don't care what the legislation puts forth, if it's a felony, a wobbler or whatever. Normally that's a weak misdemeanor case. The bigger crime for the book, not to the victim, is the back end. The back end is the financial institutions that Joe refers to. Now, in order for us to solve the front end case because, by the way, we will take reports and I advocate we do take reports throughout the country, if you're a resident of the city, that that law enforcement agency generates a report and takes that report, so I want to go on record as saying that. However, having said that, the back end crime is what the district attorney wants. Again, this goes back to wants, wishes and needs. It doesn't matter what you want, what I want. The DA is the person that's going to file and stamp that thing against that crook, and if the DA says, and they say routinely, the only cases we're going to file is where we can show the back end crimes, the monetary losses and we can fly those witnesses in on the bigger cases.In other words, Joe, you came to me to Anaheim and you say you're the victim of identity theft, somebody is using your identity in Georgia, New York or whatever. We'll take your report. To prove your case I might have to send and allocate resources to Georgia, New York, et cetera, et cetera. Keep in mind too that the feds normally won't work a case unless there's a hundred thousand loss. This is not bad mouthing my fellow federal agents. They have a lot of big fish to fry, okay, and there are exceptions, but generally they want a hundred thousand dollars loss, so, Joe, getting back to the example, I now have to allocate resources to go to where, Georgia, New York, whatever, or I can network over the phone or the Internet to have that back end resolved. Let's say everything comes to fruition, 100 percent solvability, okay, the bigger case, the better case is filed in the jurisdiction where the back end occurred. Most people would agree, so that leaves you, the frustrated victim back in Anaheim saying, Well, what about me, what are you going to do, what about my case. And the DAs normally are going to say, Well, it's been adjudicated in another jurisdiction, I'm not paying to fly X number of witnesses from New York in this example to Anaheim or California to prove again what is going to ultimately be, and I'll call it my words, a weak misdemeanor. So I think this -- that's part of the awareness that I want to share, okay. It is not that law enforcement doesn't want to help victims or that we give people the run around. I think there's a total lack of awareness and understanding of the procedures that have to be involved. The simple example I give is if you buy something to Sears you've got to return it if it's defective to Sears. You can't take it to Penney's just because we do the same kind of a job, kind of sort of the same but not really, and we are bound by the penal code to effectively enforce the rules within that code.
MS. BRODER: I don't want to get too far afield here because we're really talking about the challenges of prosecuting a case that has victims around the country and victims in different perspectives, and so I think what I would like to return to somewhat is the balance between we encourage consumers to get copies of police reports. It's an indication of the authenticity of the crime against them. At the same time we're telling, we're asking credit grantors and others to consider the burdens that they impose upon consumers in establishing that they're victims of ID theft, and there's a little bit of a tension there. So I guess I would ask some of the creditors, and maybe, Judy, I'll ask you whether Chase requires copies of police reports; if so why; what could be a substitute document for that, if anything, and maybe some others on the panel could jump in, and if the victims think that if it was a real burden to get a police report, what that means to you, so starting with Judy from Chase.
MS. WELCH: Chase does require a police report generally, although it's a case by case basis. We want to make sure that the consumer is going to be there to prosecute with us should that ever come about, and that's why we request the police report. In lieu of a police report, again the prosecution is the issue, so I'm not sure what we would get in lieu of a police report to solve that problem other than something signed by the consumer saying if it is ever prosecuted I will be there with you to testify. I don't know what else.
MS. BRODER: So you require the actual police report attached.
MS. WELCH: No, no, just a number.
MS. BRODER: Just a number. And what does that indicate to you?
MS. WELCH: That it has been filed. A lot of that I think has to do with friendly fraud. If it's a relative, we want to make sure that again they will prosecute.
MS. BRODER: Linda.
MS. FOLEY: I would like to jump in on that. I work with a lot of victims, and I currently have three cases right now where the victim knows who the imposter is. It's a member of the family. They don't want to turn this over to the police. There's a lot of family issues. They are trying to get letters from the relative who did this to send on to the credit card company, to send on to the collection agency. They're not accepting that because if you're not serious enough to file a police report, then you're probably trying to skip out a bill. That's what they hear repeatedly, so if it's a family member, they don't want to file a police report, it's brother, it's mother, it's spouse. They're in a catch-22. They can't clear it with you because you guys won't take them seriously, and, Barry, you've talked about that as well that you have a lot of them that don't come back. It could be a family member, once they see that application form and they're trying to deal with it inside the family, but it's not a case of identity theft. Then what?
MS. BRODER: Janine and then Patsy.
MS. MOVISH: This is Janine Movish with GE Capital, and we issue private label credit cards, and I just want to mention something that Werner said as well. We don't require a police report, but we do send out an affidavit, and we do send a closure letter to say we've taken care of this, we've cleared your name with the credit bureaus, but we handle thousands of cases a month just like law enforcement, so we too have certain standards and procedures that we have to follow to say, "Are we growing to call the police on this one."But certainly if law enforcement calls us, we cooperate with them, and we do everything that we can to provide them what they need for their investigation.
MS. RAMOS: Similar with us. We like to encourage the customer to file a report with the police department because we've had many successes, and they're doing that, and there was some local law enforcement agencies that the same day that the customer files their claim, they're out there knocking on the door and arresting the suspect. Now, although we know it's not like that in every jurisdiction, we don't know which ones will and which ones won't take that kind of aggressive action on the case so we like to encourage that they file a report for that reason.
MS. BRODER: To the extent that the credit grantors are also victims of this, do you report these independent -- these instances independently to police when you take the hit?
MS. RAMOS: When we have a large case we do call law enforcement. In fact, we have several going on right now, but if it's a case of a $1,500 account or $2,000, again we have thousands of cases a month as well so we have to set standards where we charge off and where we pursue with law enforcement.
MS. RAMOS: I think we get as frustrated as the victims sometimes in their dealings with law enforcement to work the case, that depending on the agency and what their priorities are, we too have a hard time getting the case worked by law enforcement.
MR. RAES: Betsy, I just want to make a comment on that. I think again we need to understand with law enforcement, we're more than willing to work these cases, but we are bound by jurisdictional issues. In other words, say a phone company files a case in one jurisdiction, it may not be the same jurisdiction as the identity theft victim. If again Joe comes to me and he files a case of misuse of a telephone account or whatever or if somebody opened it in his name, we can bend over backwards to help him but if this occurred in another jurisdiction maybe two counties away, in my case that might be San Diego or San Francisco County ten hours a away, I can't legally go and file that case. Even if I wanted to go and investigate it, how am I going to file that case, much less in New York, Texas or wherever where it becomes more exacerbated. You can't with law enforcement look to it as one stop shopping because of the laws.
MS. BRODER: So am I the only one that is very curious to know how Travelocity has 100 percent prosecution rate.
MR. MCCALLUM: Well, let me clarify that. It's not 100 percent. That's my goal. I started in May with the company, and everybody I could get my hands on -- we do ask for the statements. We do ask for the police reports for several reasons. If we can make an apprehension at the airport, and the carrier's security departments are cooperative, we'll do it, and our rate is one out of every five since that time. The other thing is my understanding is these police reports feed Consumer Sentinel, is that correct?
MS. BRODER: We would like to receive data from as many sources as possible, and we not only get our sources from the consumer calls and Emails that we receive but also from private contributors.
MR. MCCALLUM: Very good, and then also the Uniform Crime Report. If we're having an outbreak of identity theft, then those that allocate the funds need to know about it so that's another piece of that. The other thing is too like Barry was mentioning unfortunately we have a certain amount of persons who take a trip to Hawaii, get back and decide not to pay their bills, and we can't call every hotel, but those that we do verify that they were there. When you ask for a police report or a statement, those problems go away.So as a business interest coming from a law enforcement background, I have to put on that hat too, I have to do that for my company. I have to ask you to at least to a minimum call your PD or your SO or your federal agency and put in that report for me.
MR. RAES: Shannon and the rest, I would like to also mention that Consumer Sentinel is a wonderful product, but it is a tool in law enforcement's tool box. Anaheim does belong to the Sentinel, and there's a valuable database there, but I think we all need to understand that neither the FTC nor Sentinel take over complete case investigations nor do they file criminal complaints. They only handle things from a civil perspective or a clearinghouse perspective, so back to law enforcement, which this panel's focusing on, we use Sentinel and other tools in that tool box to establish jurisdiction, to validate if a crime has been committed and then to try to pursue that on behalf of both victims, front end, back end, et cetera. But I think it's important to know because I know a lot of my federal detectives I speak to don't understand some of the good and some of the things that can't be done with Sentinel, so it's a tool, but we need to learn to use it like anything.
MS. BRODER: I would emphasize here, one of the benefits that we think Sentinel and the ID theft clearinghouse component of Consumer Sentinel offers to law enforcement in the context of identity theft is a way to aggregate data so you don't simply see an independent complaint, but rather you can see a pattern of complaints, and therefore you can more likely reach your threshold of financial loss by looking into the database.It's not just one person who's been victimized by someone at this address, but it's a dozen of them, and quickly you have a big case there that's more attractive to law enforcement, so we do think that it offers that promise, but thank you very much for the plugs. Bill?
MR. HAYNES: We've talked about prosecution, police reports. I would like for us to turn to how you deal with consumer reporting agencies, both from the perspective of the creditor being contacted by the consumer reporting agency and the creditor being contacted by the consumer and then contacting the consumer reporting agency, what has worked particularly well? Are there any problems that people see? So I would like to turn to the creditors. Maybe Janine could start on this issue.
MS. MOVISH: Sure. We have a strict operating instruction guideline that we follow. If someone is the victim of fraud, after we send out the affidavit, it's returned, we send a closure letter to them stating we're going to delete all this information from all three credit reporting agencies.Our system automatically sends a message to all three of the agencies to delete that from the credit bureau.
MR. HAYNES: Does it work effectively?
MS. MOVISH: Yes, it does. It's automatic. It goes to the bureaus, and then as soon as they get tapes from us and as soon as it's reported to them, they delete it from the victim's credit bureau.In the meantime if there is a lag say 30 to 190 days, they have that letter, so if they're going to apply for a mortgage, they have that letter from us to state that they were a victim of fraud, this has been cleared.
MR. HAYNES: What about the situation where we heard this morning things reappear? Do you see that yourself, that you've sent it to the credit bureau to take it off and then somehow it gets back on?
MS. MOVISH: I don't see that very often. When my fraud investigators work a case, they work it. It's closed. It's done. If we get some calls like that, it's very far and few between.
MR. FISHMAN: I would like to say something on that score. James Fishman, New York. This is something that I see a lot of, and I think the problem may be that when can you send a UDF or Universal Data Form to the reporting agency saying delete or whatever, you're supposedly certifying on that form that you have also deleted it from your own records. And that often is not the case, and I see lots of situations where I even get a copy of the UDF for from my file, so I know it was sent, but then a year later that trade line is back on the credit report, and when I contact the credit reporting agency about it, their response is, "Well, it was rereported because it was never fully deleted from the creditor's records."So I think it's a two step process, and simply telling the consumer that we've notified the credit bureau to delete is only half the story, and they can't rest assure that it's not going to come back unless you've also certified to the consumer that you've corrected your own records. So I think that's something consumers need to be aware of to get that two step assurance and not just the first step.
MS. MOVISH: I can't speak for B of A or Chase, but we are required to keep accounts on our books. We can't just delete a record completely from our system. The account is closed. It's notated. No one can reopen it, and there are notes stating to that effect.
MR. FISHMAN: But they do find their way back.
MS. MOVISH: Yeah.
MR. FISHMAN: And some banks have more problem with this than others, and I don't know if it's a way of designing your system so that that can be safeguarded better, but I think that is something that banks need to look to and find a way to make sure that it doesn't leave your hands again.
MR. HAYNES: Barry I think has got something to add.
MR. SMITH: Jim, I'm baffled that people talk about it coming back a year or so later because once an account is blocked as fraud, it's going to move through a process and be charged off. It's going to be blocked as a fraud account. It's going to be charged off and considered dead on the books.
MR. FISHMAN: Ideally, not always the case.
MR. SMITH: Again, we can't talk -- I can't talk for every bank. I can talk to some of the banks that I'm familiar with and of course our own bank. It's marked as a fraudulent account and moves through the system. Now, if some bank misses it as a fraud account, and it ends up moving through a collection account or doesn't charge off or is reenaged or something like that, some sort of exception process, then I can make stretch the imagination and understand that it's out there for more than a year. But I know that in our case after 90 days that account is going to be gone from the books. It's going to be charged off. It's going to be marked as fraud. Social Security number is taken off it, and it's certainly flagged as do not report to the bureaus, so I can't understand how those can come back on.
MR. FISHMAN: I don't either, but it does happen, and I don't work in banks so I don't know what systems are being used, but it is a very common problem that this stuff just comes back out of the blue.
MR. SMITH: I have no doubt.
MR. FISHMAN: And it's extremely frustrating.
MR. SMITH: I have no doubt that it does and I think, go back to the statement that said working with the people that are attempting to do this right or do it right and the process is not as painful as it is in some of the other areas, so maybe we ought to look to just where these accounts are coming from, and maybe we can take a sample of them and try and trace them back, maybe turn them over to the bureaus and ask them exactly where did they come from.
MR. FISHMAN: I think you hit it a minute ago when you talked about accounts that are put out for collection. I know that some accounts go to secondary and tertiary collection and maybe even beyond that before it eventually works its way back to the bank, and maybe that's the year we're talking about, that it's been out there from one agency to the other.
MR. SMITH: That's possible too because that does pop into an exception process. If an account is moved through the collection process because we haven't been able to contact somebody and it charges off and those accounts end up being sold somewhere else and now the collection agency comes back and contacts the victim through a skiptrace and says, "You're the person who owns this," and the person says no and starts the dispute process, if that account has been sold several times, it may be difficult to locate that account and bring that account back.But I have to think that that is surely an exception process, and it troubles me if it's happening that much.
MR. FISHMAN: I don't think it's exactly that much of an exception. I think part of it is that every time it is sold it gets rereported to a credit reporting agency under the new collection agency's name so you can't even tell from looking to it that it's the previous Citibank or Bank of New York account anymore.Although they're supposed to have the account number follow it, it doesn't always happen. That's for the obsolescence rule, but it doesn't always happen.
MS. FOLEY: And the collection agencies won't always tell you where they've bought the account from. That's been the other problem.
MR. FLYNN: And if none of you all are telling us anything. Really, has anyone done here ever done a subpoena before? For every one of them they want a subpoena. For every account number, for every piece of paper, they want a subpoena. I can find 15 or 20 good fraud investigators for a bank that are friendly, that will give me everything that I need without a subpoena. So those who do want subpoena go at the bottom of the stack again, so we're now dealing with a big stack and a whole bunch of helping me out at the top and a whole bunch of never getting anything done at the bottom, so that's what you're dealing with along with we have a bank saying that we want to do it this way and we have an attorney saying that it is happening this way, and law enforcement is stuck in the middle going, We want to help you, we will do everything in our power because we are today. Most of us don't like sitting around to a table and talking about things. We like to go out and hit the door and go catch the bad guy. We're here today to tell you we're all now trying to talk and to get this worked out so that a standard reporting system comes in to place nationally. It's going to start with local law enforcement. It's going to start with the banking systems, and it's going to start with the attorneys, okay? That's where all this is starting, and that's why we're here today is to go over this, but I want to let you know we don't do subpoenas either, so all the lawyers and everybody here, law enforcement doesn't do subpoenas.
MR. HAYNES: Could we turn to the situation where the creditor, whether it's the bank or the telephone company, first hears from -- about the fraud from the consumer reporting agency? In other words, the consumer does not contact the creditor. It comes first through this intermediary. How does that impact the way that the creditor deals with it or does it impact? Maybe we can start with Chase and the telephone company.
MS. WELCH: I'm only dealing with the non credit side of it, more the DDA, so we're not dealing with the top three, the Equifax, the Trans Union and Experian. We're dealing with a TeleCheck, the check systems, and we will be notified by them that fraud has occurred on an account we've opened because they're aware as we're opening a DDA, we're going out to them for information so they know what accounts we're opening accounts on, a checking account.
MR. HAYNES: A checking account, demand deposit.
MS. WELCH: Yeah, demand deposit, and they will notify us, and we will take measures to secure the account and notify whoever we have to that -- whoever we can find to notify that this is an account opened by fraud or to find out if in fact it was an account opened by fraud.
MR. HAYNES: Then you go back to the consumer?
MS. WELCH: If we can find the consumer, but sometimes we're going back to the bad guy per se. We're not going back to the innocent victim because we haven't found really that person yet. We've been notified only by a third-party that something has occurred, but we're given minimal data to go back to somebody and talk to them.
MR. HAYNES: What about a credit card type situation, Barry or Janine, does this happen where you hear first from --
MS. MOVISH: Oh, sure. We have automated consumer dispute verification letters that we work daily, and by law we have to work those within 90 days. The Fair Credit Billing Act says we must work those and resolve them within 90 days, so we work very closely with the credit reporting agencies when they report information to us that we did not necessarily know about from the consumer.
MR. SMITH: We take those disputes very seriously, and we work them the same way. If it's a phone call that comes in because something big is going on and it's part of a ring or something, we assign someone to it right away. We find that your best cooperation with law enforcement, to get even from the bottom of that small pile that Jim has over there without subpoenas, is that if you can identify the person, send someone out to do an investigation and identify where they are and be prepared to present a case that's pretty much ready to be taken to the district attorney, then you're going to get a lot of cooperation from law enforcement, and where possible, that's our attitude. We try to do that so we can prosecute.
MR. HAYNES: But when you're dealing with this process where it comes from the consumer reporting agency, do you then -- do you need to get a fraud affidavit from the consumer or how does that work?
MR. SMITH: We do ask for a fraud affidavit from a consumer. We come back and we contact the consumer, and we have a fraud affidavit, and if in fact there's an application that we have, we'll send them the application and them to give us the information back. Now, if a person for some reason can't send the information back to us, if there's somebody in custody being prosecuted for a case, we like to have this information to support the case, but if somebody doesn't send it back and we know that it's fraud, well, we often have elderly people who are victims of this, that this is a very big burden for them, and yet it's pretty clear to us from the surface information that this is a case of ID theft or a fraudulent application and we're going to treat that one the right way. We're not going to punish the person just because it will make it difficult for them in a situation like that, but when we know it's a crime, we're going to take it as a crime regardless of the source.
MS. BRODER: Jack Jordan, you look like you have something to say.
MR. JORDAN: Yeah, I would like to pony up on what Barry was just saying. There's two adages that I believe we need to address here. One is knowledge is power, and the other is that 90 percent of the people or 90 percent of the crime is committed by 10 percent of the people. And what really I think needs to be done is what we're doing here, and that is exactly meeting people that are in the business with one's sole focus. We all have the same goal, and the goal here is to assist the victim in removing this bad information from their credit and to prosecute successfully people that are committing these crimes.I think the biggest reason that these crimes should be reported to the police is because it quantifies how big the problem is. A couple years ago when I got involved in identity theft we made a concerted effort to educate not only the people in our communities where we serve, I'm from Los Angeles County, California, we educated the people that we served but we also educated our own department members so that when the first responders go out to take these crimes, they don't tell the victim what they used to tell them and that is, You're not a victim, it's the bank or it's the financial institution. So I think in meeting here, meeting the people behind the name that we knew a couple of weeks ago, I encourage everyone body to join associations. If you're in the financial community or if you're in law enforcement and you're prosecutorial, you should go to association meetings so that when I pick up the phone and I call Janine, I'm not just another annoying phone call.I go, You remember me and we went to the Capitol Grill and yeah, I do, what do you need, Jack, and that's what happens. I see more success -- we have probably, what's this October 23, we probably have over 2,000 cases of identity theft reported to Los Angeles County Sheriff's jurisdiction alone. That's about a 43 percent increase over last year. It has to do with a couple things. One, obviously we've educated the public that there is this crime out there.The law changed in '98 to make the victims a crime in California, so we have an inundation of a new reported crime and an initial group of victims to address. I am very aggressive with the deputies that work with me. We do go out and do control deliveries and arrest people and prosecute them. We have a couple of excellent success stories wherein you're dealing with white collar crime, you're not going to get the same long prison terms or federal penitentiary terms that I got when I worked gangs, but we are getting some that are approaching five years in law enforcement -- or five years in the penitentiary for some of these crimes. I agree totally with Werner. They're very, very labor intensive, because they're complex. They cross jurisdictions. What I want to be able to do by knowing people in other law enforcement communities is again pick up the phone, tell them that they have a crime.We take the first report. If you live in a sheriff's jurisdiction in LA county, we will take the first report, and I started that two years ago because I was having people tell victims, There's nothing we can do for you. Well, there is something we can do for you, we will take the first report. That does not mean like Werner says, we're not going to Florida generally speaking, we have actually gone to New York. We're not necessarily going to go on every single case, but it gets the ball rolling for the victim. I agree with something someone down here, I don't know if it was Jim, the attorney from New York, that said it, but there are a lot of -- there is a lot of reluctance on some victims to prosecute the suspects because of the knowledge that they have with them, the relationship that they have either currently or they had in the past. We encourage that because again you go back to reporting these crimes. It's a deterrent to most people to commit them. I encourage you to get to know the people that are in this room, whatever walk of life they're in, and realize that no one person -- somebody said earlier this morning, there's no one person -- the lady from I think it was Experian, no one person is going to be able to create this problem, no one person is going to solve it. But every person, and I say this from the Shine trustee at one of our sheriff's station to the sheriff of Los Angeles County, has to do his or her job, and when one of us doesn't do the job it just propagates the problem.
MS. BRODER: I think we'll take this opportunity now to take a brief break. I'm sad to say the cafeteria is closed at this time, but you can get coffee across the street, and let's reconvene to 3:30 to which point we'll start discussing the proposed standard fraud declaration. (A brief recess was taken.)
MS. BRODER: Thank you all. This is the snooze part of the afternoon, so we'll try to keep things as lively as possible. I wanted to start by commenting that during the break, there was all this wonderful networking going on. People were making great connections, and this is something that we've all recognized as one of the values of getting together, bringing folks from the financial industries, from the consumer reporting agencies, from law enforcement, consumer advocates, putting us all in a room and see what happens. And we would like this dialogue to continue, so from my selfish perspective, I would ask each of you on behalf of your organizations to establish someone to be the point of contact, preferably yourselves, and to give your business cards to Helen Foster, wearing the ID theft colors over here. They are fight colors, we're going to have a song too, and so that we can keep this going because I think that this is incredibly valuable. On the same line, I owe an apology to Doug Johnson from the American Banking Association, Bankers.
MR. JOHNSON: Bankers.
MS. BRODER: Bankers Association, the other ADA who joined us, and I didn't acknowledge him on our panel, but I think he has a few words to share with us on training banks, their member organizations on identity theft and dealing with their customers who become victims of identity theft. Doug, when you can kind of round that up, and then we'll go on to the standard fraud affidavit.
MR. JOHNSON: Great, thank you, Betsy, but if you come in late to a meeting, you can't expect everybody to stop what they're doing, particularly when such a good dialogue was occurring, and I was struck by the level of detail and how much content was within the discussion beforehand. But I did think that there was one thing that we to ABA could particularly add to the conversation as it goes on and that's, Okay, this is all fine and good, we've got very large institutions doing supposedly the right thing, and they want to do the right thing for the most part. How do you transport those sort of procedures and how do you transport that knowledge to 10,000 financial institutions that are throughout the United States? And that's just your depository financial institutions, not just -- there are all sorts of other institutions that are out there as well obviously, and so from other standpoint, that's one of the things that we to American Bankers Association have tried to accomplish because we obviously have seen the trends. We see that identity theft is becoming an increasing problem within our financial institution industry and that it's not just the larger financial institution that have been in concert with consumer victims of identity theft going forward. It's all institutions, and that's going to be a trend that's going to continue and one that we have to meet as an industry, and so one of the things that we've striven to do is attempt to transport some of that knowledge, particularly organizations such as Chase for instance have, in to the community banking environment particularly so that they have the tools that are able to try to meet identity theft. And the one thing that we particularly try to do is what happens when the consumer comes to you, either through the phone or at the teller line because the consumer has been struck by identity theft is going to come into the banking system or into the system generally from any type of different angle and you're teller line, your customer service representatives on the phone, pretty much the majority of your staff have to be properly trained and educated in terms of how to attempt to assist this consumer because if you don't do that right at the onset, first of all, the relationship isn't as good as it could be because you have to recognize and we have to recognize as an industry that we're partners in this. I think one of the comments that was made that is very true is there's more than one victim to this. The individuals are obviously victims, but at the end of the day it's the financial institution that goes through the process of charging off that loan to the extent that there is a loan that is ultimately not paid back. And so to the extent that the relationship is productive from the onset, obviously that's for the best of all parties, and it's a win win to the extent that that happens, and so that's one thing that we certainly attempt to stress is that we want to make sure that our financial institutions have the ability and the tools to train their customer service reps and everybody to the extent possible. And one of the things that we've attempted to do, for instance, is to provide the standard little tools such as the ten steps to prevent identity theft and the standard types of other types of information that would be helpful to accomplish that, but at the same time, what we also want to do is take advantage as an industry of opportunities that present themselves. Like for instance in the course of trying to adhere to certain privacy preventions which are in law now in the United States, we're viewing that as an opportunity for institutions to go through and review all of their information sharing practices with all the parties that they share information with because one of the things that you do when you do that is you understand, if you map it out, exactly how information is going from the bank to the credit bureau to all the people within the system so that you can see where you may have some difficulties in that system and maybe rectify the system. So, for instance, to the extent you can possibly have control over it, loans which have been charged off in your institution but may be in a collection process somewhere, don't end up back on a credit report to the extent possible, things of that nature so that you do have a full idea as an institution how your information is shared throughout the entire process.But the other thing that we certainly want to stress is that to the extent that the customer enters a system in the bank to some place which would not necessarily be anticipated, that there is a central receiving. There is someone who is responsible and owns that process within the community bank, within the financial institution so that people know within the institution who has that responsibility, and that person can then in turn take ownership of the person's problems, not just within the institution itself but also again try to act as a partner for that individual consumer in their challenges generally because one of the things that we attempted to do, for instance, is to try to put together a modest report and not certainly extensive as the standardized fraud report, but a report that at least our financial institutions could use to provide to their customers to say, Okay, these are the things -- these are the people you need to contact, these are the phone numbers that you need to call and this is the process, this is the information that you need to have in order to help you along the way in terms of trying to rectify the situation. So we heartedly endorse the concept of having some standardized report that can be utilized across all parties, from a database standpoint obviously makes the most absolute sense to have that information, but also from the standpoint of making sure that everybody has the information that is necessary going forward to try to rectify the problem.
MS. BRODER: Thank you. Let me ask a question. I hope there are no answers to this question, and that is we all are working under the assumption that a standard fraud affidavit is a good thing, that it would help consumers in the process.Is there anyone that has anything to say to the contrary, that it is not the right thing, not this particular one, Linda, but the concept because I would like to air that out before we play with the nuts and bolts, so Werner, anything?
MR. RAES: Only that I think we should define that an affidavit as you normally -- and I'll just pick a one page piece of paper, an affidavit as opposed to a report, so --
MS. BRODER: This is a declaration actually. This is a standard fraud declaration.
MR. RAES: I'll hold off until we get into the discussion. I think standardization is good, but I think we have to define what we want -- where we want the vehicle to go, what we want to tailor it for, so I'll hold off.
MS. BRODER: James?
MR. FISHMAN: One of the things that consumer victims often experience after awhile, a tremendous amount of paranoia, and I can see a situation where if you present this to someone who has been through the ringer on identity theft, they're going to say, Why should I put all this information in one place where if it falls in the wrong hands, they're off to the races all over again, and I think you're going to have a hard time convincing some people to do this for the same reason that some people won't answer the census. They don't trust anybody.
MS. BRODER: So your point has to do with the information that is requested in this form or the concept?
MR. FISHMAN: I think that's more -- well, I don't see how you can have the concept without the information because it's information driven really, and what you're doing is you're giving everything in one place. It's one stop fraud right here if it falls into the wrong hands, but on the other hand, I don't want to say that steps shouldn't be taken to make it easier for consumers to report this stuff, and this is one way of doing this. I think you have to be aware of some of the road blocks and hurdles that will be faced. This is not that different -- the information that is in here is not that different than the information you're required to give to apply for a membership at Blockbuster Video, and look what happens there. Those applications get stolen all the time, and they're used -- there's more than enough information on that one piece of paper to open up all kinds of credit accounts for people, so for somebody that has been victimized that way, looking at this I think is looking at another victim -- being victimized all over again if this were to fall under the wrong hands.
MS. BRODER: Linda, was that your concern as well.
MS. FOLEY: That's part of my concern. I'm also concerned with the fact that this type of a one step declaration not only is overburdensome to the victim in terms of information, but also to the recipients. A merchant for instance, Wicks furnisher, or my boutique down the street that's been ripped off is going to take a look to this and not know what to do with it. They're interested in one page only maybe, and I guess the concept I would like to go to instead -- if we're going to do something standard maybe as a cover sheet or a couple -- then have like a letter kit that would go with it where this letter would go to this particular type of a merchant or a vendor, this would go to the banks, this would go to credit card companies, this would go to collect agencies, this would go to the CRAs and work it that way so it's more specific. As someone who's affidavit of fact was put in to the imposture's hands because of a court case, and I looked to this and I went, if this had gotten into my employer's hand who was my imposter, I would have died. You might as well just give me a new Social Security, shoot me now because she had not only what she had stolen from me, but a dozen more pieces of information that could have been used at a future time.
MS. BRODER: Actually Joe, then I have something.
MR. GENERA: I would just like to point to two things that we saw on this, that I'm not sure --
MS. BRODER: Actually I think we want to look at the big picture first.
MR. GENERA: Yeah, but I'm hearing you say you want this sent to every affected creditor, et cetera. In our case, if there's 14 or 15 creditors, and that's a ten-page long document, that's 150 pages that we need to copy, duplicate and again the possibility of leaks. I like the information because looking through there that is a lot of information that we had to provide to entity A, B and C but perhaps instead of sending that form to every entity, make it truly one stop, send it to one clearinghouse, whether it's here at the FTC or somewhere but one clearinghouse, one document.
MR. RAES: Betsy, too this information number 1 is going against a lot of prevention law enforcement is putting out as far as your mother's maiden name is on here, Social Security some of that kind of thing, so I don't think law enforcement will support those small points of that.
MS. BRODER: Well, that's why we're here today. I'll tell you, this document was put together not as a creative writing assignment but using the fraud declarations that are currently in use, and some of you on this panel provided declarations, and we used your form affidavits, and we use that information to put together and now let's kind of deconstruct. Let's go through it and find out those areas that are problematic, what can be trimmed down because if we can get a buy-in on both sides of this conversation, that is it's overly inclusive, and it -- but we need to confirm the identity, the actual identity of the person, maybe we can find some common ground here. We have a comment from the audience, and if you could wait until you're miked and identify yourself, sir, please.
MR. MUNSON: I'm Steven Munson. I'm a deputy Attorney General from the State of New Jersey, Division of Criminal Justice, and my concern with the fraud affidavit is exactly what law enforcement has expressed. It will, not may, it will get in the wrong hands. I think if you're going to use something like that, it needs to come with a confidentiality guarantee of some sort. I don't know what, but it needs a confidentiality guarantee, and it also needs somehow without violating the constitution to stay out of the hands of the defense in discovery because the moment you go to criminal prosecution, defense is going to want that plus a whole lot more.
MS. FOLEY: Yes, thank you.
MR. MUNSON: And as a prosecutor quite frankly I don't want to revictimize any of those victims. That's the reason I'm here, and so there I think needs to be an honest broker, whomever that may be, government or a private entity or a nonprofit who would be the guardian, if you will, of the information disseminated to those to whom it should rightfully go, and maybe not entirely. I can't see that all credit givers need all of the information. Many of them probably don't even have a fraud department because if they're a little boutique that granted credit, who knows. That's probably the boss saying, Yeah, I think I'll do that. There does need to be a parsing out of this. The other thing I think we need to keep in mind from the victim's standpoint is that there is a law enforcement component, nobody denies that, but law enforcement, the criminal justice system, has limitations. The moment we bring an indictment, the defendant is entitled to all constitutional rights, and the state or the federal government must prove that case beyond a reasonable doubt. The defendant doesn't have to do a thing, again potentially revictimizing the victim. Maybe there's a different way of pursuing remedies without using the criminal justice system. There are civil penalties. There's forfeiture. There's all of that.
MS. BRODER: Just as a question, are these fraud affidavits that consumers report currently discoverable in the criminal process?
MR. MUNSON: I would venture a guess that they most likely are, certainly if they fall into the hands of the state in any form.
MR. GENERA: Right, but the ones you're sending in -- I'm sorry. But the ones you're sending in, if I send a fraud affidavit into Citibank, I'm only including their particular information.
MS. FOLEY: And they can turn it over to the defense attorney who can then turn it over to the imposture because that is their right, and that's exactly what happened to me.
MR. SMITH: We have a situation here where a crime has been committed which is a pretty ugly defect of people's lives, and I think that one of the reasons that some of these don't get prosecuted is because if you send Bank of America information about our account and we have a thousand dollar balance on it, even if you would tell us on the phone that you're also a victim of Citibank and maybe First USA or whoever else is out there, we can't talk to those people. We don't have the information to discuss those cases. We're putting ourselves behind the eight ball before we even start because we don't have enough information to look at the case and say, It's only a thousand dollars with us but maybe it's 15, 230,000 dollars overall, and maybe if we noted -- if we come upon a suspect and we decided that this is a case we can get somebody to take, if we call law enforcement or talk to prosecutors and say, I've got this case, it's a thousand dollars on my side and I hear stories there's several other victims that suffered financial loss, wouldn't it be so much better if we could present the information about the entire case to somebody? I agree with some of the personal information, and I think we're going to talk about the personal information, but I think it's great that a fraud department can suddenly get a complete picture of what the identity theft impact was on the individual and how big the case is, I could probably get a lot more on that.
MS. BRODER: Let's look at the affidavit. As pointed out on the cover sheet, while it's not exactly a confidentiality agreement, that the last line says that "except as otherwise noted the information you provide with this form will be used only to process your fraud report." While it doesn't guarantee it won't get into the wrong hands, it certainly does make clear to the consumer that no one is going to use this for marketing purposes, something that is of great concern. I would like to go through this sort of systematically page by page and elicit any comments that you have, and I would hope -- well, let's go through the first page and any issues that anyone has?
MR. SMITH: I would add point 5 to what the form asks for is where have you applied for credit in the past six months so that we can separate the good fraud -- good credit from bad fraud. That's a highlight because I'm going to suggest that a little bit later on. Right up here number 5, you say the form is going to ask you for information about you, the victim, how the fraud occurred, the accounts and companies involved and the steps you've taken in response to the fraud, and I think it's also going to ask for where have you applied for credit in the last it could be past six months or a year.
MS. BRODER: Do you currently ask for that in your standard fraud?
MR. SMITH: No.
MR. FISHMAN: There's a risk there because I think so many times people -- for example you go to the mall, and there's a table there where you get a coffee mug for signing up for a credit card. That's something you may have forgotten about, and if you didn't put that down on here and they know about it, then you're being viewed with suspicion because you left one off.
MR. SMITH: Again I would hope that as we go through this that we're not looking to grade this paper or say someone made a mistake, we're going to disallow their dispute or their claim or something like that.
MR. FISHMAN: But that's typically when consumers complain that they're fraud victims, they are being evaluated, and I have seen banks use whatever they can find and inconsistencies in the consumer's story to say, "You're not a victim, you're a thief," so I think you have to be cognizant of the fact that people are evaluating consumers and finding ways to disallow their claim.
MR. SMITH: I certainly know that we try to figure out ways to disallow claims when claims should be disallowed, and I hope that the wording that we're trying to build in here --
MR. FISHMAN: I think that's something to keep in the background, that's what's going on.
MR. MCCALLUM: Regarding the Internet, which I think is important to talk about because it's going to be 20 billion worth of sales in the next year, we need to talk about the ways in which Internet companies are accessed, so if you're telling me that your Email account is such and such but it was accessed by another one, it's a very vital piece of information, that you did not own the Email account that was used to get to me. So I think we need to ask in the case of Internet related crime that we're asking, can you verify as to the ownership of this Email account and what is your current account, that is how they get to Internet companies is through the Email address, and it goes deeper into the IP address strain, but typically my people figure that out.
MS. BRODER: So you're asking for Email not as a point of contact but as a way to verify --
MR. MCCALLUM: Exactly, exactly. And the other thing on any Internet site, the very first thing you have to do in order to do a transaction typically is to establish a profile. Whether that's us, Expedia, EBAY, et cetera, are you the owner of that profile. Typically if it's legitimate fraud, they're going to say, no. We established that very critical point.
MS. FOLEY: I would like to go back to the first page, please. Mari pointed out something interesting last night. We're dealing with people who have been victimized that are sensitive to this point and have seen more legal documents than they care to see. I would like to see something a little more humanistic in the beginning, something like, We understand you've gone through a lot, we're sorry about that, we are here to help, if you will kindly fill this form out, we will do our best to make this process as easy, something like that. It sounds just like a lawyer wrote it? Yeah, it does. We need to be a little more human with this. They have been wounded, and many compare it to a rape. We need to be very cognizant of their emotional status to that point.
MS. BRODER: Thank you. I think that's actually an important point to include here.
MR. RAES: Betsy, if I could, Werner Raes. I think that again I would like to go back and revisit defining because I know you said this was a declaration, okay. Right now currently we have an affidavit system that goes to most financial institutions and others, and that's the legal vehicle -- the one-page affidavit, not necessarily the declaration, that's the legal vehicle that basically says, Hey, financial institution, you screwed up you, owe me money, please put it back in my account. That's not lawyer talk, so what I'm asking is could we not standardize an affidavit, a one-page affidavit much more quickly and simply with this group working forward and get that in circulation? I could probably help promote that in on the law enforcement sending it to the International Association of Financial Crimes Investigators to whom hopefully everybody belongs to in this group. Then if with we want to do a declaration, and quite honestly from a law enforcement perspective, this is more than any police report -- this goes to like a homicide report. If I was a victim and received this, I'm not sure that -- I would go, "It's overwhelming, I'm under enough stress," and there's no law that requires them to fill this out.And by the way, while we're on that, again remember earlier I said we have civil law, criminal law, wish list, we want to, we wish we could. This is a wish thing. It's a nicety. It's the cherry on top. I'm saying that the meat and potatoes is the one page affidavit of fraud or forgery. This is kind of a nicety. It's not a necessity, and my final point is, and this is jumping a few pages ahead, but the notarization of this thing, there is no law that requires anybody anywhere to spend money to notarize it. When people call me to my desk to Anaheim, I tell them, if you want to do that, that's up to, you work that out with your financial institution, I would ask them to pay for it if you even want to consider doing it because that's an undue hardship on the victims who have been already victimized. And a side note as far as law enforcement is concerned, I don't know how many of you are notaries, but a notary is not what it used to be ten years ago. It means absolutely nothing to me in fraud anymore.
MS. BRODER: Then I'm going to -- we jumped from the first page to the last page, and let me ask the financial institutions, notarization, so what? What does it mean to you, and does it make any difference, so, Judy?
MS. WELCH: I don't think it makes any difference to us for our existing customers where we know who the customer is. We have information on the customer. We know what the customer's signature is, is like. When it's a non customer, somebody who doesn't do business with Chase and hasn't, we don't know anything about this person, so it's -- I guess it just gives us a comfort level that somebody else was looking to maybe some identification when this person was filling out the affidavit or the declaration, and we draw the line on whether or not it was a customer or a non customer as to whether we require notarization.
MS. BRODER: I think we hear from a lot of people that if an identity thief is resourceful enough to open up accounts and maybe even create false identifications, what stops them from going someplace and just signing the paper and having someone witness it? And so I guess I think there is some rethinking in the industry of the value of notarization, but, Patsy, do you have -- do you require notarization?
MS. RAMOS: We ask first for them to file a police report, and if they do that, there's no request for notarizing. In those situations where they're in a state that the local law enforcement won't take the complaint, we do ask that it be notarized, and I think the value that that brings are for us as a corporation is to understand that this customer is serious about this, that it is a crime, that they have no knowledge of -- truly have no knowledge of the debt. And again it's a question -- we don't insist, and if that is a hardship for the customer there are other options for them.
MS. MOVISH: I was going to say we don't require notarization or a police report. If they provide a police report, fine. If they provide a copy of their driver's license, that's even better, but we don't require a notarization.
MS. BRODER: I wonder from Doug sort of from an industry perspective is notarization something that you think is generally required among the banks that are members of your organization?
MR. JOHNSON: Just like you heard here, it's all the way across the map. I think that for customer information that as Chase indicated it's probably less relevant than it would be for frauds that have occurred outside of the customer arena.
MS. BRODER: To put it in concrete terms and based upon what we saw of other fraud affidavits, this requires either notarization or a police report, and I would ask the panel whether you think that makes sense, whether it's overkill. Robert Cross?
MR. CROSS: I think it's -- it could be requested, not required. We don't require it. If we're not sure who we're dealing with, we may request a police report. I agree that notary is of little or no value.
MR. SMITH: A police report can be filed over the phone, and here at least the signature that we're getting we know is the signature that's on it, driver's license or another piece of identification.
MS. FOLEY: No, you don't.
MR. SMITH: What?
MS. FOLEY: No, you don't. You know how many fraudulent driver's licenses have been issued this year in California? Over a hundred thousand.
MR. SMITH: Yes, I do, but I also get disputes that come in where the individual has completed the application, has his brother sign the affidavit when it comes back, so the affidavit doesn't match the signature and doesn't match the sales slip, but if the sales slip come in because they signed it with their left hand or they did something like that, so if it creates an undue burden and so many people send it back to us and it's not notarized, and --
MS. FOLEY: My driver's license has my signature on it. What's the difference between that and a notarized? You're getting a bank verification guarantee of signature. I guess I'm still troubled by the fact that calling up the police and filing a complaint somehow legitimizes my victimization.
MR. RAES: That's very true. A lot of times it's looked upon by law enforcement as the dump all receptacle, and if you go file a report, whether it's a fender bender which by the way most law enforcement agencies are not taking any more, you just exchange information because it's paper filling up filing cabinets. It's the same sort of thing, if you have a legitimate identity theft victim here, yes, you live in our city, we should take that report, and I'll go to bat for that throughout the country and have been, okay? But just because you want to report some miscellaneous item or event to a local law enforcement agency should not legitimize it in and of itself and those reports should absolutely not be taken by law enforcement.
MS. FOLEY: There's been no investigation made. It's just a complaint.
MR. FLYNN: And I just want to add one little small thing in here. For everybody out here that's thinking about ten pieces of paper and the lawyers and banks, how many people have the same fingerprint? I'm telling you now, you don't know how to read fingerprints, you don't need how to read fingerprints. If your fingerprint shows up on a check, how is anybody going to know? The only people that need to know are the people who read them. Those people are law enforcement. You cannot say your finger wasn't on the check if your fingerprint is on the check, can't do it. You've got prosecutors. You don't lose cases where there's fingerprint identification. Put the fingerprint on the check, put it on the receipt. It's still customer friendly because it doesn't mess with your thumb or your finger. You just put it on there. It stays on the receipt. If you say that's fraud, the only thing I need to do is come back to you and say, Do you mind providing me with your thumb print, very, very non intrusive. The only thing I need is the thumb print to verify whether or not that print on the receipt is the same person there. If it isn't, what do I do know? I go to a computer system that's now nationwide. I dump the fingerprint in the computer system, and I let the computer tell me who the bad guy was, and then I don't have a problem finding a prosecutor that wants to prosecute because there's only one person in the world with that fingerprint. It's an easy case. It's open and shut. But the banking system and whatnot will tell you it's too intrusive and not customer friendly, and I'm telling you that they lost 40 percent of the fraud in Florida in one month when they went to fingerprints.
MS. BRODER: And I think biometrics is something we're going to talk about a lot soon, but I'm going to try to keep us on track.
MR. FLYNN: Sorry.
MS. BRODER: That's okay, and talk about the affidavit and maybe go through points where I know we have some people who have concerns about privacy and access to this information so Mari Frank?
MS. FRANK: I would like to make a general comment about it. I admire the fact that you're trying to do something to actually make it easier for victims, but in my view it really makes it a lot harder for victims. Also we talk about privacy in the information age and the right to know. I know that when I was a victim, I sent over 90 letters myself that -- in trying to get letters back from these different creditors, that they didn't even really read my letters to begin with, that I had to -- they were looking to it. And I would get a form letter back and the same thing with the credit reporting agencies. So there is no reason that if I had a Bank of America problem, that you need to see all the other creditors' statements. It's a lot of paperwork that you're going to hopefully shred, and you're not going to look to it because you're dealing with fraud departments that don't have the time to look to all this stuff. The truth of the matter is you want something that cuts to the chase, that you can look to your fraud stuff. You can make a determination if this is fraud. You can fix the file. You don't have the time. And then what scares me is what Joe was talking about and what Jamie was talking about, having all that information out there, there's no safeguards, there's no need to know. I really like what Werner was saying about having a one-page affidavit. This is what I originally thought was going to happen and then maybe some sample letters. Like when I did the identity theft survival kit, I put sample letters in so people could fill it in with a diskette. I'm not trying to sell it here. I'm only saying I was trying to make it easy for victims when I did it, and I gave a copy to the Federal Trade Commission to David Medine saying, Let's make it easy on victims, but I really have a problem with giving all this information not knowing where it's going to be.One of the last pages say that this may be shared with other entities. Well, what does that mean? I think you did a good job in trying to meet all the needs of everybody, but what it did was give far more information than is ever needed to know. The other issue is if I am a victim and I find out that someone has been working in my name, then I have send something to the IRS. Am I going to send them this? No. The truth of the matter is is I am going to send a specific letter to each creditor because it's going to be a different issue with each creditor. And my specific fact haves to be clarified, so a one-page affidavit along with your cover letter is a far better way to go. There's no problem with getting a sample letter with maybe some spaces like I did in my mine, here, fill in what's appropriate for you. But the truth of the matter is from all the victims I've spoken with and from my twice being a victim of identity theft, I can tell you that filling this out with all the documents I have -- now, had five boxes of documentation. Am I supposed to send five boxes to 15 different creditors? It's going to cost me a fortune.
MR. SMITH: I don't think --
MS. FRANK: Let me finish. There is no need to give all that information on all of that, and there was another issue in here that said attach all of the documents that you have that show fraud. Well, the other issue is when I'm originally contacting various creditors here, I probably won't have gotten that original application, and most of the victims aren't even able to get that. I was able to get it because I'm not a wall flower, and I just demand it. Also most of them can't get the billing statements. I was able to get the billing statements, but I must tell you that it is -- if they don't give it, it's because they don't have it, so there is no reason, you're actually putting more of a burden on victims with this than you were without it. And I just wanted you to understand that but I really think the one page affidavit is a great idea, and Werner --
MS. BRODER: Actually I would like to spend a couple minutes going through this and having people point out the information that they think is excessive or that will not serve the purposes of the fraud examiner who's looking to this and trying to figure out what's going on, and Patsy?
MS. RAMOS: I think maybe what we need to consider is having something like a one-page affidavit. Some of these questions are good, and there are questions that probably need to be asked of the consumer at the time of the claim to help with the fact finding process by the investigator, but I don't think it necessarily has to be in the form of an affidavit or a document.
MS. BRODER: Great.
MR. SMITH: You know, I think the focus has turned. When we met and we talked about this affidavit, I think that what we were trying to focus on, all good intentions, was to figure out how people can put down their information once and send it to people and make it easier for the credit granting institutions to arrive at the decision that this is frozen because I think a one-page affidavit may be covering this. And this being some sort of statement of information behind it and filled out as much as people can might change some feeling about it, a one page affidavit gets filed where the police. People write us a letter and say, This account is fraudulent. What do we do? Do we say, Okay, we're going to take it off the bureau, forget the debt, we're going to do this and that? rather going back and forth, back and forth and trying to resolve the issue, we're trying to say if you fill this out and send it to us, we probably have enough information in maybe 90, 95 percent of the cases to arrive to a decision to make the process simpler and painless. When the victims here have been through this for a year, two years, et cetera, this type of information should almost close the case out much, much earlier, so that's what I'm looking to, and what I'm hearing is some opposition to that. And if we go through it and just ask that people look to it in that light, it's not to disprove the fraud. It's really trying to prove the fraud, but if we can't arrive to that agreement that that's the purpose for it, then we're never going to agree on what belongs in the document.
MS. BRODER: Joe, and then we're going to go through the document.
MR. GENERA: Actually listening to both, especially the gentleman from Bank of America, I do understand the importance of people needing this information, and I'm also with you in terms of the more you can prove that there is a thousand dollars here, ten thousand dollars there, it makes for a stronger case. But I also support the idea of a one page affidavit, and as we were talking about this morning, people want to talk to a real live person when they report their fraud to VISA, MasterCard, whomever it is, have this be the phone interview, have them fill out the notarized or however you want to do it -- their one-page affidavit but have someone listen and go through this list and definitely take off the mother's maiden name.
MS. WELCH: That is exactly what I was going to say. This is almost in lieu of talking to the victim. This is everything you're ever going to need or want to know about the victim without ever talking to them, but at Chase we talk with every victim, and this is the type of information we may find out or we may ask, but this is long and cumbersome.
MS. BRODER: I'll tell you one challenge we had with having a single page affidavit that you would send to any creditor or financial institution is as in Mari's case, there were 15 or some odd accounts that were opened, how in the space of one page can you list this? You have to fill it out 15 pages.
MS. FRANK: And then a cover letter that we could give them for the different types of -- and then they would send the police report so it would be three documents they would put together. I'm not saying only the affidavit, but I'm saying that this cumbersome thing doesn't make sense with all of the other documentation of other accounts that have no relationship to Chase. Chase only wants to see what I'm talking about with Chase, and they can see a copy of the police report, however, that will list the accounts, the other accounts, so what Barry was saying about, Well, maybe it will help us if we know this victim was victimized by Citibank as well as Bank of America and Providian and all these other banks. Well, they're going to have a copy of my police report, and my police report is going to list these ten accounts, so instead of including all the documentation from those accounts, just have the police report, a cover letter and an affidavit. That's it.
MR. RAES: I think too, I want to piggyback real quick, I think it's important to go back to that concept I espouse which is you have legal ramifications, and you have nice wish lists of things, okay? It's nice to provide the banks with the additional places fraud have occurred. There's no mandate anywhere that that occurred. But in effect the legal mandate is that an affidavit of forgery or fraud is a legal instrument. It is the vehicle by which you as their customer are legally demanding that they put the money back in your account, okay, and then the bank acts upon that. That's the single, the green light that says, bank you have to do something, and they review it and they make their decision, but there's nothing incumbent upon the law that says you have to supply this other information. I agree they should have it of course being a law enforcement member. I'm all for them getting it so if we go from a one page, I might say go for a two page or a major page and a half and include miscellaneous and list that stuff, but keep it in perspective is all I ask, legal and niceties and wish lists.
MR. FISHMAN: I would also add that there is another legal effect of this, and that is since it was mentioned this morning by Ed Wernesky that we now have limited furnisher liability under the Fair Credit Reporting Act. That is also triggered by notice, and this document or something like it, whether it's one page or ten pages, will trigger furnisher liability so that if the account is not cleared up, and it is reported again to a reporting agency, then the consumer will have met the predicate for furnisher liability under that statute. So I think that maybe that's something also to mention on here is that this satisfies your obligation under the Fair Credit Reporting Act which you should be doing anyway.
MS. BRODER: Which wouldn't be any different with this document than --
MR. FISHMAN: No, I'm saying adding to the instructions --
MR. SMITH: Add the statement.
MR. FISHMAN: -- add the statement that you're required under the Fair Credit Reporting Act to notify the furnisher before you can sue them, and that this satisfies that obligation.
MR. SMITH: I don't like that exactly.
MS. FOLEY: This sort of reminds of a one size fits all clothing item. It works for accessories, but when it comes to shoes and clothes, it doesn't work. I still would like to see the idea of going back to a simplified two or three page document that's on top that becomes a cover letter that provides the general information everybody seems to need.
MS. BRODER: So let's look to page 3.
MS. FOLEY: So what do the CRAs need? What do creditors need, and make it a pull apart kit.
MS. BRODER: Let's look at page 3. Thank you, Linda, and the question that we asked on the page there with how the fraud occurred: Is this information that is important and useful to the banks and financial institutions where it states that other -- that the person has not authorized the account being opened, that someone used their information, all of these affirmations. Is this information that the banks and other financial institutions would want to receive in any affidavit that they might use for identity theft?
MR. SMITH: Yes, but I think you need another box that simply says -- the box that will be checked most often and that is you do not know how the comprise occurred, so I think we kind of have to add that.
MS. BRODER: Although I guess 15, someone, a person that I do not know, used my identifying information which is it's invisible to me.
MS. FRANK: They might not know what they used.
MS. FOLEY: Can we go back to the page before and I'm wondering how many merchants and banks really need to know four past names I've been known by or how many previous addresses because my imposture doesn't even have that information?
MR. SMITH: Well, the previous address I think is important because quite often the previous address is where the new fraud has occurred.
MS. FOLEY: Shouldn't you time limit it, or is this a case that only one specific group of people need this information and not everybody?
MS. BRODER: Let's listen to somebody from our audience?
MS. CALDWELL: I'm not a victim of identity theft and I still have some concerns with this form, basically two of them. I don't understand why I should give a creditor that is an organization that I don't have a relationship with my date of birth, my Social Security number and my mother's maiden name. I don't give those to anything but banks that I have financial relationships with. I don't think I should have to give it out to somebody else. I realize this may create problems, but I'm very uncomfortable with that, and the other point I wanted to raise was I don't know exactly what the intent is as to what happens with this document, but we just heard from the gentleman from Travelocity that apparently there's a fair amount of merchant fraud that gets promulgated through this system. So, for example, if somebody at some sort of travel organization has taken my credit card information because of a transaction I made with them, and they are now -- they're now in the position of being a creditor, that I'm supposed to report all this additional information to? I mean, this just doesn't seem to me like something that's safe for the victim to do. It seems to me they're setting themselves out to be victimized more thoroughly.
MR. MCCALLUM: I would like to clarify that a little bit. Over 90 percent of the cases that I've worked, they are not our customers. These are people that in restaurants, hotels, rental car agencies, their ID haves been mined because they were their customers, and someone has taken that information off of property, gone to Kinkos or some other place, accessed a computer, gone to our site, built a profile posing as that person. It's not a breach of security to our system at all.
MS. CALDWELL: Nonetheless I think there have been instances where companies have specifically set themselves up as a merchant in order to obtain this kind of information to perpetuate fraud. I know there's a fairly well known one I think in LA.
MR. JORDAN: Oh, blame LA.
MS. CALDWELL: I'm sorry.
MR. SMITH: I would suggest that we look to delete the mother's maiden name.
MS. BRODER: Is that fine with the creditors?
MR. FISHMAN: I just wish banks would stop using the mother's maiden name in general. I can give you a specific and concrete reason for that. I have a lawsuit now in New York, I won't mention the bank it's against, but the mother's maiden name is the security password, and when somebody calls in to access the account, they are asked three questions, your name, the account number and your mother's maiden name. My client's wallet was stolen and she's from Venezuela. In the Hispanic culture your mother's maiden name is part of your name, and it's in your wallet, so asking the mother's maiden name, account number and your name are three things that are in that person's wallet, and that imposter was able to order access checks from this bank and run up tens of thousands of dollars. And when I requested from the bank why are you using the mother's maiden name, what became clear is because it's very inexpensive to use because everybody remembers it, and if you required people to make up a password, they would forget it, and it's more time consuming and expensive. But there's a serious downside and it's not just Hispanics in this country. I think Asians also use the mother's maiden name as part of their name, so I think a significant part of the population the mother's maiden name is no security, and at the very least if you're going to use the mother's maiden name, at least tell consumers they have the right to choose something else because it's often used without your knowledge or consent, and I think that would go a long toward stopping some of this.
MR. MCCALLUM: Jim, what about a city of birth or a unique pin number? That's what I use.
MR. FISHMAN: Even that's available one way or the other, but let the consumer provide something. I don't know of very many web sites that require mother's maiden name. Yet you have to provide a password that you know, that you remember, but mother's maiden name really in this day and age has no business being in the banking industry anymore.
MS. BRODER: Speaking on behalf of those of who us who didn't change their name when they got married. We've made it to page 4.
MR. SMITH: It took a long time to get to page 4 .
MS. BRODER: You see there's so much blank on this form. I hope people appreciate we used large fonts and have a lot of blank space, so it may not be -- once he get down to it, it's not as much.
MS. FOLEY: I would like to see an addition of the word checks because I have a lot of victims who have had checks either stolen, lost, forged.
MS. BRODER: This is on number 16, Linda?
MS. FOLEY: 16 and 17 at least.
MR. GENERA: And 18?
MR. SMITH: A couple other fields that we have on our statement when the credit card was opened as a fraudulent application, I'm not sure where they might fit in here or they might not, as we'll hear from some people. One was we asked for persons residing with us, with them, and the persons residing with you, the name and the relationship so we know the names of children or other household members who may have applied for this account or a signed sales drafts. We like to ask the people, Are you willing to prosecute, even if is a relative, yes or no.
MR. FISHMAN: What information does that give you? If the person says, No, I'm not willing to prosecute, does that mean you discount the story?
MR. SMITH: We then want to know the reasons why, and we will try to figure out whether this is a civil matter or a criminal matter.
MS. FOLEY: None of your business.
MR. FISHMAN: But if you don't want to prosecute their family member, that doesn't mean it was any more authorized.
MR. RAES: Barry, could I jump in? From a legal law enforcement standpoint, again it goes to wish list and legal, okay? If you're not going to prosecute, if you check the on the affidavit, that's one thing we do want on the affidavit because if you're not going to prosecute, it's not a police matter. We don't need to take a report. Remember I told you we're not going to stuff the file cabinets full of nonsense, so if they're not going to prosecute, that needs to be on there so we know right away it's a civil matter.
MR. FISHMAN: I'm looking at it in terms of the bank getting this, not the law enforcement. How are you going to translate the consumer saying, I'm not going to prosecute?
MR. SMITH: But if somebody calls me and says, I didn't open that account and therefore I'm not responsible for it, it was somebody else in my family and, no, I'm not going to support prosecution, I'm not going to give you any more information about it, should we be forgiving that debt and just take that into --
MR. FISHMAN: I'm not saying don't ask for more information. You can say it was my brother, it was my mother, et cetera, and tell you who it is, but say I am personally not going to prosecute my family member. If you want to prosecute them, that's your business, but I'm not going to do it, and that should not detract from the validity of their unauthorized use claim.
MR. SMITH: Okay.
MS. FOLEY: It's an unfair burden to put on a family member frankly. You don't want to get involved in the middle of family issues and this person definitely doesn't want to be in the middle of it.
MR. SMITH: You're going to be in the middle of it. If we turn around and prosecute, who are we going to bring in as a witness?
MS. FOLEY: That's different. I'm being asked to serve your purposes. I'm not prosecuting my brother.
MR. FLYNN: Let me through one in here. You didn't give them the money, you wouldn't have to prosecute them. If you didn't give them the money or the credit or the loan, you wouldn't have to prosecute them.If you found out who the person was who got the money from you initially, you wouldn't have to prosecute them with the help of a family member. That's your responsibility, not mine, but I will tell you this, if somebody in my family does it, they're going to jail.
MS. BRODER: We have no doubt about it, but that you would fill out in number 19 all of the identifying information about your poor relative who is going to spend the rest of their life in the woosca for stealing your information. But section 19, part 19 here does give the opportunity to reveal information that, what, 30 percent of our people who call into our hot line have some kind of information about the person who was involved in the ID theft. It may not be everything. It may be an address because they know that a change of address form was put in, but they don't know the name of the person so we try to collect this information here. Now, is this information of interest and value to the creditors, that is the potential perp?
MR. MCCALLUM: It is.
MR. SMITH: Absolutely.
MS. BRODER: Do you ask for it now?
MR. SMITH: Yes, we do.
MS. MOVISH: Yes, we do.
MR. SMITH: We usually get it in the case of ex spouses very promptly.
MS. BRODER: Or soon to be.
MS. FOLEY: Is there a way of combining 14 and 19 together as well as 15 and 20 together? They seem to address the same subject but go into more detail.
MS. BRODER: Yes, probably, and that is the identity of the person who stole or was thought to have stolen your identity, to bring that information together.
MR. FISHMAN: I want to throw in another family member issue that I've seen, and it may not be as common as all that, but I don't know, maybe it is. I have seen some situations where the family member who perpetrated the fraud owns up to it and is willing to take on the obligation, but the banks will not transfer that obligation to the family member who's willing to own up to it. And so that puts them in a bind, and then you're going to get less cooperation on prosecution because the victim is saying, My brother is willing to pay it, get it off my credit report, but the bank won't do it.
MR. SMITH: Is the brother able to pay it?
MR. FISHMAN: Maybe the brother has to fill out a credit application. Maybe the brother needs to get a cosigner, maybe something needs to be done, but I'm hearing it's falling on deaf ears. They won't even consider it.
MS. BRODER: I'm actually going to pull us back to the topic at hand. I think that's an intriguing problem, and as Helen said earlier in the day, that's for a later panel, but that's something very, very important to keep in mind.
MS. FRANK: It really does goes to the issue.
MS. BRODER: Can you wait one second until you're miked?
MS. FRANK: I think it really goes to the issue because then if you're asking for that information you could ask are they willing to take on that responsibility. If you know who it is, I had a judge whose stepson did this to him, and the judge didn't want to prosecute him because he was afraid his wife would leave him, but he did get his stepson to say that he would take it but could not get the bank to agree to let him take it.So the bank was willing to lose the money instead of transfer the account, and in that case they would lose the money or prosecute the judge, so it was a very difficult situation, and I think that goes to the issue. If you know that person, is that person willing to own up to it and take it, and then that -- then the person is the victim no longer is the victim and you don't have to prosecute and you've got someone who takes on the responsibility. So I think it's a real critical issue that Jamie brought up.
MS. BRODER: Let's put that in as we're trying to trim down this document, let's include that information.
MS. FRANK: If you're going to put that in there.
MS. BRODER: If you're going to put that in there perhaps I was working on the wrong assumption, perhaps the people who would be filling in part which is -- excuse me, part 19 which identifies the suspect would be doing so in order to prosecute, and if they didn't want to share this information because it was a close relative or someone that they didn't want to turn in, that they would not share that information. But I guess you pointed out a scenario, the two of you, where it's not exactly fitting that way. Yes? If you could wait until you're miked, please?
MS. BHAGWAKAR: I work for an auto financing company. The family member wouldn't do that if they were creditworthy in the first place. They did it because they knew they were not going to be qualified with information they had with their Social Security number. So at a later point when we diagnosed a fraud or we determined it's a third party doing it, that person is still not qualified to get a loan, so I would rather take my now or later on I'm going to have a bigger problem, so I'm not going to give the son or the stepson the credit if you're saying that he's willing to take the responsibility. But if his credit report indicates he has repossessions and charge offs, I'm not going to take a risk of giving him a loan at this point. I'm going to take my car from him and deal with the problem on with the deficiency.
MS. BRODER: Could you please identify yourself for the court reporter?
MS. BHAGWAKAR: I'm Bharma Bhagwakar. I'm with Volkswagen Credit.
MS. BRODER: After the workshop, if you could spell your name for the reporter. Thank you. 14 We're all the way to item 20, which requests for the date when you became aware you were a victim of ID theft. I think that's of great importance to most creditors and certainly for law enforcement, and I was wondering if our privacy watch dogs had any concern with that. I say that in the nicest of ways. We're on page 6. Now, page 6 and page 7 both ask for a listing of creditor information, that is all of the creditors who may have opened accounts or whose accounts may have been corrupted by an identity thief, and I understand that there are strong misgivings, if I'm correct, about sharing this information universally among all creditors. First of all, that it makes it harder for the creditor involved to find the information pertaining to them, and second that it may circulate private information more broadly than most people and certainly victims of identity theft would otherwise choose to do so.
MS. FOLEY: It also opens us up to work place identity theft issues as well, which we'll talk about in a couple days.
MR. FISHMAN: But what you're doing here is really reproducing a credit report. Anything on page 6 and 7 is what would be on a credit report, and a creditor already has the right to pull your credit report as an existing creditor, so by giving him this, why don't you just get your own credit report and attach it and say, This account is mine, this one isn't, this one is mine, this one isn't.
MR. SMITH: I think if we pull the credit report, I don't think we can share that information with the consumer. I think that's why the consumer has to go through the bureau to get a report, but I do agree that we get this information on the bureau but we don't know which accounts are real or and which accounts are fraudulent.
MR. FISHMAN: That's why the consumer can simply attach an Experion report and go through it and cross off the ones that are not theirs and check off the ones that are theirs.
MR. SMITH: I think that the one piece that would be important in here would be somewhere authorizing us to be able to contact other credit grantors that have had fraudulent applications on their behalf.
MS. BRODER: I'll tell you, one of the reasons that we included this, and it was after considering the issues that have been raised today, is that it gives some assurance to other creditors that they're not the only ones, it wasn't just this one account that was created but rather that the victim was subject to a whole rash of false accounts opened in their name which establishes some kind of verification that they are not a bona fide victim trying to get out of a single debt .Were you going to say something?
MR. MCCALLUM: I'm sorry. Jim, just to address this a little bit. My ultimate goal is to shut these people down, whoever's doing this. What we do typically is almost a prosecution package where we work at maybe 70 percent. If I know my counterpart at that fraud department within that issuing bank or whoever and maybe a unique case number that they have, we'll get a lot done so I would just like to throw that in on this particular page.
MS. BRODER: Does anyone else think among the creditor, financial institutions? Patsy.
MS. RAMOS: I don't think personally this is the level of documentation we would ask for.
MS. BRODER: What on page 6 or 7 would you ask for? Now account -- it asks for creditor, name, address, account number, type of unauthorized credits or goods or services, date issued or opened if known and the amount or the value provided. What of that would you look for?
MS. RAMOS: We would just like to know if they are aware of any other accounts that were fraudulently opened in their name, that's it.
MS. BRODER: What about the account for SBC?
MS. RAMOS: We would know the account in question for ours. I'm just saying we wouldn't know this level of detail for any other creditor grantor.
MS. MOVISH: I think if they just list the creditor then we have a copy of the credit bureau report and we can go back to the credit bureau report and if they have Ford Motor Credit we will know when it was opened and what the account number is.
MS. BRODER: Judy?
MS. WELCH: We don't pull credit reports, so we don't have any of that information available to us from the DDA side.
MR. RAES: We don't either.
MR. FISHMAN: One thing I would like to throw out, and I realize it's all in line with the same purpose here which is to solve the consumer victim's problem is going a little bit further and saying when you have someone with 8, 10, 12 fraud accounts and they spend a lot of time dealing with each one of those banks, every time they finally convince when of the banks that what they're saying is true and the bank agrees with them, it would be good if the bank would issue what I would call a safe harbor letter that says, We have investigated, we've taken your name off, you don't owe this money, because once you have that letter, it makes it so much easier to go to the other eight or nine or ten and say, Look, XYZ Bank agrees with me, and I've been victimized in ten different banks. It gives you more credibility, and I would encourage banks to do that wherever possible.
MR. RAES: And I think law enforcement would support that on the peripheral. It's beyond our scope, but I have no doubt that it does and I think -- go back to the statement I would add getting back to that instrument that goes to that financial institution that says, make a decision. You're forcing their hand legally, make a decision, I am a victim, and you're recompensating me or you don't think I am, tell me why. So to me the key in law enforcement is that one-page affidavit. They have to by law respond to it, so you're either a victim or you're not. The safe harbor letter is a nicety and sure, I would support it.
MS. BRODER: One of the things we hear from consumers, and I think one of the consumer victims who testified in Congress last year said that she would fill out that one-page affidavit, and then she would be sent another six to eight page form that she had to fill out to supply all of the information behind it. So where does that one-page affidavit get us in terms of the specific account information that necessarily would be sought by the financial institution? Jack?
MR. JORDAN: Well, I don't want to steal his thunder, but I think what I said earlier was you're not going to solve 100 percent of anything, and I think what we're trying to do here, even with this document or the affidavit that Werner is talking about or the police report, 98 percent of the people that we deal with, A, want to prosecute, B, are willing to give whatever information they have.And I can only speak for recently in the last year or so we're seeing successes rather than -- my heart goes out to the people that have been fighting this stuff for five years. I wouldn't fight life on Mars for five years, so I feel sorry for them, but I think now there is lot of change, and the change is happening because of what happened in March, what's happening here today and what's going to happen on Wednesday.So I was once told that a camel is a horse that was created by a committee, and I think we're going to end up with the same thing if we keep going here.The goal is to help Barry and help Bob and the other financial institutions identify the people that are trying to get out of a legitimate debt and also prosecute the ones that are trying to defraud the banks further.
MS. FOLEY: And let's not forget the people we're really trying to help, the victims.
MR. JORDAN: That's what I said first.
MR. RAES: And, Betsy, too, to add to that I think that the affidavit -- and I don't know the state that we're talking about because each state again has its own codified note or penal law, and unfortunately like Japan or someplace we don't have one set of laws. Each state has their own, so I can't speak specifically to your point, but normally in about 98 or 99 percent of the cases, if that affidavit was not honored, if that was me speaking personally, I think I would find myself an attorney like the gentleman on the end there, and it would be rectified very, very quickly because in most cases the financial institutions do and are very good at responding because they're legally bound to respond and they know that, okay? The other thing too that I might add, Mari, this new brochure that Anaheim put out which is available back there for everybody, there's a sample letter in here which addresses some of these issues.
MS. BRODER: Joe, yes?
MR. GENERA: If I could add on to that, that is a very, very good point, and we were fortunate, very fortunate to be able to find Attorney Fishman to help us with this. There are a lot of people out there who can't and who don't have the means, and there are also a lot of attorneys out there who don't know what they're doing when it comes to identity theft, when it comes to fraud, et cetera, et cetera. Now, we need to leave soon, and I just wanted to leave you with a thought because we are not going to be able to join you all tomorrow. A lot of this could be avoided. In fact so much more of this could be avoided. Catherine and I don't have to be here. As the gentleman just said, there are laws and regulations that credit bureaus and credit grantors need to comply with. We wouldn't be here if you had done your job. That's all I have to say. Sorry.
MS. BRODER: Thank you. We thank you for making the effort to come today. Phillip McKee?
MR. MCKEE: Phillip McKee from the National Consumers League. I just wanted to quickly jump back a couple seconds before we had our discussion about relative importance of affidavits versus declarations and once again talk about item number 1 on this list. It's a nice idea that was proposed by the attorney to have the person make notations on their credit report but that assumes the person will be able to understand their credit report and know what accounts on there are the fraudulent ones. Unfortunately with the differences in formats that are out there and with the often confusing formats, unless at the same time as creating this declaration you also created a standard easy to read, plain language form for a credit report, most consumers who are brand new victims of identity theft would not be able to use an attached credit report as a substitute for item 181. They would not be able to figure that out. Usually the people that we have contacting us become experts in how to read a credit report, but that's much later in the process. That first time when they discovered it, there are many people who's credit reports to them might as well be a foreign language because that is so confusing for many people.
MS. BRODER: The language we're looking for in 21 is the best information that the victim has on the accounts that have been opened in their name, and whether they obtain it because a debt collector has contacted them or because they've been able to interpret their credit report, they'll be in the same situation.
MS. FOLEY: I want to go back to the victim is very frightened at this point. There's nothing in here that says, Why do you need this information. You're just saying, Give it to me, give it to me, give it to me, and I'm going to start with I never asked questions before now, I'm going to start learning the word no. And I want to know why you need each one of these steps, and there's nothing in here that says that -- the other thing I'll bring up, and I know we'll be talking about it tomorrow, and I hate to make this longer, maybe on page 8 we need to talk somewhere is there a criminal identity theft case going on concurrent to this because many cases overlap or actually I would say criminal identity theft cases also overlap into financial identity theft.
MS. BRODER: I think on the first page with the important instructions, you bring up an important point, Linda, which is we say what this form asks for, what you should do, what you should know, but maybe we need a little bit of why we need this, and when we figure out what that is, that is how generally this will be used, that would bring us ahead. There's a gentleman in the back of the room.
MR. THOMPSON: Joe Thompson. I think there's another point here that we need to make. We have a little bit of a --
MS. BRODER: Can I stop you one second? Do we have a better Mike?
MR. THOMPSON: Joe Thompson, President's Information Technology Advisory Committee. I think what's happening here to some extent is the credit industry is in the new economy, and the consumer, the potential victim is still back in the old economy. The consumer particularly in the fast paced economy we have has become a commodity, but in establishing the fraud we are leaving the consumer as still an entity which is the way things used to be. The speed of getting credit or getting a cell phone or getting any type of this has really gone down. We had a minute ago that you can get a cell phone simply by calling a number and setting it up. If I could get out of such an account simply by calling a number, perhaps the cell phone industry might find a solution to the problem. My point of it is that's the new economy, old economy, and I think that we have got to face this issue, that as we have made business -- the credit industry, business, cell phones, et cetera, operate so quickly and so easily and so instantly for people, and particularly that's been not really so much to serve the people but because of competition, that we've got to do the same thing for the consumer. We've got to bring the consumer in to the new economy also, and 12 pages on everything that comes out is the old economy. I'm in danger every day of someone opening up some false account, and I have to put another 12 pages on in principle, not only some individual doing it, but there's nothing to prevent some person from getting a list of names and Social Security numbers, opening up his own little small business and setting up financial liabilities for everybody on the list.
MS. BRODER: And it happens, and we've sued them.
MR. THOMSPON: It does.
MS. BRODER: But actually I'm very interested in if you have an idea of how to bring this process that may seem cumbersome and a little bit antiquated in a more timely --
MR. THOMSPON: You can look to it in different directions. One thing that might choke a little bit would be that if the credit industry incurred a liability to the person when they set up a financial liability because what you're doing, what the company is doing, is establishing a financial liability for that individual. If the credit industry incurred a liability for damages to that individual in doing that I think they probably would redirect corporate resources to finding a solution to the problem, and I have great confidence that they could.
MS. BRODER: That's one perspective that I think would generate a great deal of discussion on this panel. We have already gone over by about 15 minutes, and under other circumstances, I would plow through except I know we have an opportunity tomorrow in a smaller break out group to continue this discussion which I think is important. We are determined and dedicated to establishing something that will facilitate consumer's efforts in reporting their fraud, and we're going to move ahead with that. We thank you so very much, all of you today, for your important input. We look forward to seeing you tomorrow morning at nine o'clock, and I remind you also to share your business cards with Joanna Crane and with Helen Foster, the women in the ID theft colors. Thank you very, very much.
(Time noted: 4:46 p.m.)
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