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Prepared Witness Testimony
The Committee on Energy and Commerce
W.J. "Billy" Tauzin, Chairman

Identity Theft: Assessing the Problem and Efforts to Combat It.
Subcommittee on Oversight and Investigations
December 15, 2003
10:00 AM
Middletown Township Municipal Building, 3 Municipal Way, Langhorne, Pennsylvania


Lieutenant Colonel Ralph M. Periandi
Pennsylvania State Police
Deputy Commissioner, Operations
1800 Elmerton Avenue
Harrisburg, PA, 17110


Good morning Mr. Chairman and members of the Committee. I am Lt. Col. Ralph M. Periandi, Deputy Commissioner of Operations for the Pennsylvania State Police. On behalf of Colonel Jeffrey B. Miller, Commissioner of the Pennsylvania State Police, I would like to thank the House Energy and Commerce Committee for this opportunity today to speak on the issue of Identity Theft.

Identity Theft is delineated in Title 18, the Pennsylvania Crimes Code, Section 4120. This statute indicates a person commits the offense of identity theft of another person if he possesses or uses, through any means, identifying information of another person without consent of that other person to further any unlawful purpose. The unlawful activity could involve a criminal utilizing a victim's personal information in order to obtain access to loans, credit or debit cards, bank accounts, services such as telephone or cable, or personal property ranging from groceries to automobiles. Following the tragic events of September 11, 2001, law enforcement must also consider the use of another persons identifying information by criminals or terrorists in an attempt to gain access to restricted areas/information in order to further their criminal enterprise.

In recent years, the crime of Identity Theft has grown in scope with the advent of the inexpensive personal computer. Those criminals possessing familiarity with computers now have powerful resources at their disposal. By obtaining personal biographical and financial information, which is readily available on the Internet, an identity thief can pose as anyone. Additionally, by utilizing the wide range of high quality computer peripherals available, they are able to craft documents and identification, which allow them to create new identities or steal the identity of someone else. Another computer aided method of committing Identity Theft is known as "skimming". "Skimming" is the practice of reading and storing the magnetic information on a debit or credit card. It is easily accomplished by those in the service or retail industry by "swiping" a provided credit or debit card through a second card reader at the time of a legitimate transaction. The stored information is then used by that individual or sold to others for criminal purposes.

Conversely, the technologically challenged identity thief continues to resort to time tested low-tech methods for obtaining the personal information of a victim. Stealing mail and digging through garbage generally provides the criminal with extensive personal information to include the victim's full name, date of birth, social security number, bank account information, utilities account information, address, and telephone number. Armed with this knowledge, the identity thief is ready to apply for credit or access funds in the name of the victim.

Currently, the best source for documented statistical information concerning the problem of Identity Theft is the Federal Trade Commission (FTC). The FTC has been maintaining data and information regarding this crime since enactment of the Identity Theft and Assumption Deterrence Act in 1998. (Pub. L. No. 105 - 318, 112 Stat. 3007) In furtherance of this Act, the FTC developed the Identity Theft Data Clearinghouse and its reporting vehicle, the Consumer Sentinel. To quantify the problem of identity theft, the following information is provided from the Consumer Sentinel:

  • Of 380,103 fraud complaints received nationally in 2002, the largest category of complaint was Identity theft at 43%.
  • The Financial costs to victims of all fraud reported in the nation during the year 2002 is estimated at nearly billion dollars. 43% of this figure would indicate Identity Theft nationwide cost victims approximately $200 Million.
  • Individual victim cost per fraud is estimated at $2,000.
  • National reporting of Identity Theft has steadily increased since the year 2000. In 2000, which represents the first full year of reporting, 31,117 reports were received. During 2001, 86,198 reports were received. This increase indicates a 177% change over the previous year. Finally, in 2002, 161,819 reports were received, which represents an 88% increase over the year 2001.
  • In the year 2002, 75% of victims were between the ages of 18 - 49.
  • Of 13,119 fraud complaints received in Pennsylvania during 2002, the largest category of complaint was Identity theft at 39% of all complaints.
  • In 2002, Pennsylvania ranked 22nd among states for victims of Identity Theft per 100,000 population, with 5,080 victims.
  • The top three crimes committed in concert with an Identity Theft in Pennsylvania during 2002 were Credit Card Fraud with 2,359 victims (46%), Phone or Utilities Fraud with 1,103 victims (22%), and Bank Fraud with 623 victims (12%).
  • The top three victim locations for Identity Theft in 2002 were Philadelphia with 1,202 victims (24%), Pittsburgh with 226 victims (5%), and Allentown with 70 victims (1%).

Continuing, in an effort to quantify this problem since the inception of the Pennsylvania statute regarding Identity Theft in 2001, the Pennsylvania State Police have received 714 complaints involving this crime. 302 were received in the year 2001, while 412 were received in 2002. This represents a 27% increase.

This data provides a general overview of the raw, cold statistical information regarding the crime of Identity Theft. What it does not provide is insight into the associated emotional problems victims of this crime encounter. Many individuals do not discover they are the victim of Identity Theft for months, if not years. Some victims have been duped for as long as five years. Upon discovery, victims must spend significant amounts of time contacting creditors and credit reporting agencies in an attempt to repair the damage to their credit histories. While this is occurring, they are often unable to obtain credit and financial services, telecommunication and utility services, and even employment. Many victims report having wages garnished and tax refunds withheld. In those instances when an identity thief has received a criminal record in the victim's name, victims have reported having licenses revoked, failing background checks, and even being arrested or detained.

Combating the crime of Identity Theft in Pennsylvania requires law enforcement to achieve three main objectives. First, law enforcement personnel must be properly trained and informed regarding this crime. Second, they must be appropriately staffed with criminal investigators to conduct these sometimes in-depth and lengthy investigations. Finally, the public needs to be provided with information concerning methods to protect themselves from Identity Theft, as well as information regarding the steps to take should they become a victim. Each of these objectives will be explored more fully.

In Pennsylvania, the State Police are tasked with providing police services to those areas and citizens, who find themselves without their own police department. We are a full service department, performing functions ranging from traffic enforcement to criminal investigations. Our criminal investigators are responsible for the investigation of all types of crime. As such, our investigators must receive training and obtain expertise in all facets of criminal investigations. Training specific to Identity Theft and fraud is available to them and Pennsylvania's law enforcement community through numerous sources. Some examples are: the Pennsylvania State Police Academy; the Middle Atlantic-Great Lakes Organized Crime Law Enforcement Network (MAGLOCLEN); the National White Collar Crime Center (NW3C); the International Association of Financial Crimes Investigators; the U. S. Department of Justice; and local banking institutions.

Generally, individual instances of Identity Theft are investigated by a Criminal Investigator assigned to one of our Troop commands. In those instances when a case of Identity Theft is indicative of organized criminal activity, the Pennsylvania State Police rely upon the Organized Crime Division of the Bureau of Criminal Investigation. Members of this specially selected group of investigators are strategically located in task forces throughout Pennsylvania. They work with their Troop counterparts, as well as local and federal investigators on cases involving large monetary losses, which are usually associated with organized groups of criminals. These groups may be associated with traditional organized crime, displaced ethnic groups, or simply enterprising local criminals. Identity Theft is increasingly becoming an international crime with roots in Canada, Eastern Europe, Asia and Africa. This has made prosecution difficult and in some cases impossible even with the involvement of federal law enforcement agencies.

In an attempt to deter or mitigate the crime of Identity Theft, the Pennsylvania State Police provide the following information to law enforcement agencies and the general public:

How Do I Protect Myself?

These and other protective measures will not absolutely guarantee you will never become a victim of Identity Theft, but employing one or more of these can drastically reduce your risk:

  • Give your social security number only when it is absolutely necessary, and do not carry your social security card with you. Leave it at home or in a secure place.
  • Annually review your social security personal earnings and benefit statement which is mailed to all participants. A copy can also be requested from the Social Security Administration (1.800.772.1213).
  • Memorize your ATM password and shield the keypad when entering your password at ATM machines.
  • Do not place bill payments in your mailbox for pickup. Mail your bills directly from the post office.
  • Shred all documents containing personal information especially bills, credit card receipts, pre-approved credit card offers, and bank statements, before you throw them away.
  • Annually obtain a copy of your credit report from the three major credit reporting agencies (Trans Union, 1.800.680.7289) (Equifax, 1.888.766.0008) (Experian, 1.888.397.3742). A basic report costs $9.00 from any of the three agencies. Certain states have passed legislation giving residents free or reduced prices on credit reports. Carefully review them for accuracy and immediately correct all mistakes identified on your credit reports in writing.
  • Have your name removed from lists sold to companies offering pre approved credit cards by contacting the three credit reporting agencies and taking advantage of their "opt out" service. One number, 1.888.567.8688, reaches all three agencies.
  • Do not give your credit card number over the telephone unless you have initiated the call. Ensure that neither you nor the called party is using a mobile or cellular telephone.
  • When you purchase items with a credit card, take your receipts with you, do not toss them away.
  • Do not put your credit card number on the Internet unless it is an encrypted or secured site.

What If I Become A Victim of Identity Theft?

Identity Theft can occur even if you have been careful about protecting your personal information because of the ever-increasing skill employed by professional thieves. The exact steps that you should take after becoming a victim of Identity Theft will vary depending upon your circumstances, but in most instances, the following steps should be taken:

  • Contact the security department of the respective financial institution, both verbally and in writing, for each account that has been opened or tampered with and close these accounts. The federal Fair Credit Billing Act limits your liability for unauthorized charges to $50.00, but it's your responsibility to make the appropriate notification, in writing, within 60 days after the fraudulent activity has been discovered. Once the financial institution acknowledges the fraud, ask them to send all three credit reporting agencies a letter confirming fraudulent activity.
  • In the past, one necessary step included contact with each of the nation's three major credit reporting agencies (TransUnion, Equifax, and Experian). In an effort to streamline the process, the credit reporting agencies have agreed to begin sharing fraud related information. As of April 15, 2003, Identity Theft victims need only make one toll-free call to any of the three nationwide credit reporting agencies. The information they provide will be automatically shared with the remaining agencies for inclusion in their records. Within 24 hours of being notified, each credit reporting agency will post a security alert on the victim's credit file, which will be viewed by all lenders or other users accessing future reports. The alert will notify lenders of the reported fraud, thereby assisting them to avoid opening a fraudulent account in the victim's name. The credit reporting agencies will also remove the victim's name from the lists of pre-approved credit or insurance offers for a period of two years. Additionally, the agencies have agreed to provide each victim with a copy of his or her credit file, and to simplify the information verification process to include deletion of fraudulent information.
  • File a complaint with your local police department or the law enforcement agency where the Identity Theft took place. Also, file a complaint with the Federal Trade Commission (FTC) Identity Theft Hotline by telephone at 1.877.IDTHEFT. Although the FTC has no criminal law enforcement authority, they can pursue civil remedies and assist victims in resolving the problems associated with the crime.
  • Report the fraudulent use of your social security number to the United States Social Security Administration at 1.800.269.0271. Under certain circumstances, a new social security number may be issued.
  • Notify your nearest United States Postal Inspection Service if you suspect the theft of your mail.
  • If your ATM card has been lost or if your password has been compromised, immediately notify your bank. The Electronic Fund Transfer Act limits your losses to $50.00 if you make this report within two business days. If you wait more than 60 days to make the report, you could lose all the money that was taken from your account.
  • If checks were stolen or fraudulent bank accounts were established, report this to your bank and to the major check verification companies (Telecheck, 1.800.710.9898) (Certegy Inc., 1.800.437.5120) (International Check Services, 1.800.631.9656). Request they notify retailers who use their service that you were the victim of Identity Theft.
  • If you're a victim of Identity Theft, never agree to pay any portion of the debt just to get collection agencies off the case. The Fair Debt Collection Act prohibits collectors from contacting you if within 30 days after you receive their written notice, you send them a letter refuting the debt. Along with your letter, send supporting documentation (police report, letters from credit reporting agencies, etc.) to substantiate your position.

Unfortunately, it is impossible to protect yourself entirely from Identity Theft, but following the safeguards detailed herein can certainly reduce your risk. Publications by the Federal Trade Commission (FTC) can provide further information on how to prevent Identity Theft. These publications can be obtained by contacting the FTC by telephone at 1-877-IDTHEFT or by visiting their web sites at http://www.ftc.gov or at http://www.consumer.gov. Phone counselors at the FTC can assist callers on how to take advantage of their consumer rights and on what actions need to be taken to restore their credit.

Additionally, The Pennsylvania State Police provides numerous other services to Pennsylvania's citizenry and law enforcement community in dealing with the problem of Identity Theft. The Bureau of Forensic Services offers examination of questioned documents, handwriting comparisons, and patent and latent fingerprint identification and comparison. The Polygraph Unit in many instances is required to determine the veracity of involved suspects. The Community Services Unit performs speeches and provides information to community groups concerning how to reduce the probability of becoming a victim of this type of crime. The Bureau of Criminal Investigation through the Department's 'Pennsylvania Criminal Intelligence Center' (PaCIC), provides Briefs, which contain information concerning prevention and response methods for crimes such as Identity Theft. In addition, ongoing analysis of data helps PaCIC to identify trends in an effort to alert law enforcement statewide to potential organized efforts to commit Identity Theft. Finally, with the advent and ease of access to computer technology, the State Police Area Computer Crime Task Forces have become an invaluable resource to Pennsylvania law enforcement, particularly in those instances when a computer has been utilized in some way to steal an individual's identity or commit a crime utilizing another's identity.

As you can see, the Pennsylvania State Police brings a wide variety of investigative resources to combat the evolving problem of Identity Theft in the Commonwealth. Through experience, we have learned to utilize and share these resources with local, state and federal investigators. Only by sharing resources and staying ahead of the criminal mind will we be effective in this crime fighting effort.

Finally, recent legislative changes to Pennsylvania's Identity Theft statute have made investigation and prosecution for this crime a more efficient and effective process. Penalties have been stiffened and venue now includes the residence or employment address of the person whose identifying information has been lost or stolen or has been used without the person's consent. The clarification of venue is particularly important as many of the crimes associated with Identity Theft occur in other jurisdictions, states, or countries.

In closing, I would like to thank the Chairman and members of the Committee for the opportunity to address you today on this issue. As a member of the Pennsylvania State Police, each officer carries on a tradition of excellence begun in the year 1905. As part of this tradition, it is the mission of each member to effectively investigate crime and criminal activity, provide investigative assistance and support to ALL law enforcement agencies within the Commonwealth, and promote public awareness concerning personal responsibility regarding crime reduction. This includes the crime of Identity Theft. I welcome the opportunity to respond to any questions or comments you may have.