While identity theft is not new, it has taken on a new life with the popular rise of the internet.
I saw that first-hand during my tenure as Attorney General, when my office re-focused efforts to protect citizens from this crime, and it has grown significantly since I became House Speaker five-and-a-half years ago.
A report last December by the federal Bureau of Justice Statistics underscores just how big identity theft is for our country. It was the root cause of nearly $25 billion in financial losses in 2012, a figure $10 billion higher than every burglary and theft combined.
While we often know immediately when someone has broken into our homes or taken our belongings, identity theft can be much harder to detect. We may not be aware until contacted by a financial institution, and in some cases, young children who are targeted may not find out until they are adults. A 2012 study estimated that this affects at least 2.5 percent of households with underage children.
Overall, the Bureau of Justice Statistics says about one in 16 adults are victims of identity theft. While about half of victims lose $100 or less, 15 percent of those affected will lose $1,000 or more, so it’s clear that these crimes can have a devastating financial impact on families. Nearly all have no idea who stole from them, but most are able to fix the issue in a day or less. About 10 percent, however, need a month or longer.
Identity theft can also have a crippling affect on a family’s credit score, keeping hard-working Kentuckians from buying a new home or prohibiting them from taking out an emergency line of credit should disaster strike.
This crime’s impact, of course, extends beyond private citizens. In November, for example, the IRS estimated it issued $4 billion in fraudulent tax refunds in 2012, including 655 that went to a single address in Lithuania.
Perhaps the most common stories we hear about identity theft come in the wake of announcements like Target’s late last year, when the company estimated that information on 40 million credit and debit cards had been stolen.
State and local governments can be just as vulnerable. A December report by the state auditor’s office noted that, in South Carolina, a single employee who fell victim to an email scam accidentally caused a data breach affecting more than three million people and 700,000 businesses. It took a month before the problem was discovered, and to help compensate for the headaches this caused, that state offered free identity theft prevention and credit monitoring for a year to everyone at a cost of nearly $30 million.
Cyber attacks happen here in Kentucky, too. The auditor’s report noted that one fiscal court lost more than $400,000 from a payroll account as a result of this in 2009; and in 2007, county clerks saw much of their computers temporarily shut down because many had become infected with a virus.
The state is taking steps to help counteract these problems. During this year’s legislative session, I was proud to support a package of two bills that lay out exactly what businesses, schools and local and state governments must do if personal information they possess is compromised. That understandably includes contacting those affected and, if the breach is large enough, consumer credit agencies. For schools and government, officials trained in these types of cases will be involved as well.
Late last year, meanwhile, the state’s Department of Financial Institutions formed a new task force that is working to detect and respond to cybercriminal activity. Its goal is to preserve the integrity of Kentucky’s financial system and those who depend on it.
In today’s connected world, we may be limited in just how much control we have over our personal and financial data, but the need to protect ourselves is more critical than ever.
Be careful if you receive suspicious emails, stay up-to-date with cybersecurity measures, monitor your credit reports and shred any documents that could be used to steal your identity.
If you find you are a victim, our financial institutions and local and state law enforcement are well-equipped to help you get back on your feet. The Federal Trade Commission can also be a resource; its website on this issue is www.idtheft.gov, and it can be reached toll-free at 1-877-IDTHEFT. The state’s Attorney General’s website, www.ag.ky.gov, offers guidance as well.
If you have any questions about what the state is doing in this or any other area, please feel free to contact me. My email is Greg.Stumbo@lrc.ky.gov, or you can call toll-free at 800-372-7181. For those with a hearing impairment, the number is 800-896-0305.