The impact of identity theft in California

A comprehensive study exploring the identity theft crisis in California was released today by Identity Theft 911. In addition to detailing the increasing diversity of identity-related fraud, the white paper highlights steps that state officials and businesses are taking to combat this growing problem.

According to study’s analysis of the Federal Trade Commission’s (FTC) complaints, nearly 1.5 million Californians were victims of identity theft in 2007, which is equivalent to 15 Rose Bowl stadiums of spectators having their identities stolen in one year.

While stealing phone and utility services, and taking money through checking account takeovers or illegal money transfers, account for a vast majority of identity fraud-related activity, the report finds that certain groups in California are responsible for the continued increase in fraud cases in the state.

California ranks highly due to its regional characteristics. In the state’s central valley’s farmlands, undocumented workers account for the increased rates of employment-related identity theft as they rely on stolen or fraudulent social security numbers to secure employment. California is breed to a new generation of car thieves who’ve traded hot-wiring tools for fake checkbooks and stolen identities—a problem that state highway patrol officers responsible for investigating auto-related fraud are seeing increased activity.

Gang members and organized crime, meanwhile, have discovered identity theft as a means of generating off-the-books income, as have addicts hooked on methamphetamines, a habit for which identity theft is nicely suited. In addition, California metro areas are rich for data mining.

While identity theft continues to plague the state, California’s heightened response to this crime is cause for optimism, according to the report. Collaborative efforts between law enforcement agencies, state and district attorneys, nonprofit organizations and the California legislature has made California a model state for identity theft deterrence.

For example, California continues to pass pro-consumer legislation intended to curb the growth of identity theft. Such initiatives include landmark credit and data breach notification laws; legislation prohibiting businesses, academic and government institutions from publicly displaying Social Security numbers; and regulations that prohibit financial institutions from sharing or selling personally identifiable nonpublic information without obtaining consumer consent.

Other findings from the report include:

• Identity theft cost Californians an estimated $749 million in out of pocket expenses in 2007.
• California residents spent an estimated minimum six million hours – or 250,000 days – resolving identity theft issues.
• Of the 50 metropolitan areas ranked highest by the FTC in terms of consumer identity theft complaints, 16 were in California, which contributed the most high-ranking cities in any state.