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FC NOW: The Fast Company Weblog

September 15, 2003

Card Sharks

The state of Virginia's attorney general's office now offers an identity theft passport to protect victims of identity crimes. The passport is a legal document that asserts and confirms that you are, indeed, yourself -- and not the criminal who has stolen your identity.

My question is: What happens if your identity theft passport gets stolen or lost?

Incidentally, Robert X. Cringely recently penned a thoughtful piece on why identity theft is a growth industry. Cringely indicates that there are between 250,000 and 750,000 cases of ID theft a year.

The U.S. Secret Service reported in one year investigating more than 7,000 cases with an average cost to victims and financial institutions of $217,000 or a total cost of about $1.5 billion. The American Banking Association reports identity fraud losses to its members of around $1 billion per year and the credit card companies absorb around $1.5 billion per year in such fraud losses.
Then there is the cost of fighting the problem, which ranges from $15,000 per case for the Secret Service to the average 175 man-hours that consumer counseling organizations report it takes victims to deal with the paperwork of restoring their financial lives to order.

So the cost to society of identity theft is in the range of $4-5 billion per year and may be even higher. The U.S. Federal Trade Commission recently came up with an annual figure of $53 billion.

Cringely's suggested deterrent to identity theft: a paper shredder.