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Identity Theft Can Destroy an Innocent Person's Credit

 by: Michael Saunders

Identity theft encompasses a variety of crimes, from stealing someone's credit card number to opening accounts in the victim's name. About 15 percent of victims report that their identities were stolen for purposes other than obtaining credit, such as to get government documents, commit tax fraud, or mislead police. It's relatively common, for example, for someone to give a phony name and Social Security number when arrested or stopped for a traffic violation.

Thieves tend to do the most damage when they can take over your identity wholesale. By pretending to be you, they can open up credit card accounts, get an auto loan, be treated at a hospital, or rent an apartment. When the bills are due, they don't pay - and those delinquencies, charge-offs, collections, repossessions, evictions, and judgments wind up on your credit report, sending your credit score into the basement.

This kind of "new account" theft costs, on average, $10,000 per victim and makes up nearly 70 percent of the costs incurred by businesses and financial institutions. The out-of-pocket expenses for consumers tend to be higher as well - $1,200 compared to the average $500 when all types of identity theft are considered. The FTC's estimate of the time that consumers spend clearing up problems - 30 hours on average - was decried by many identity theft experts as far too low. The Identity Theft Resource Center said that many victims spend 300 to 600 hours dealing with the various problems that identity thieves cause.  (continued...)
Identity Theft Can Destroy an Innocent Person's Credit
  Page 2

About The Author

Michael Saunders has an MBA from the Stanford Graduate School of Business. He edits a site on Credit Repair and Debt Consolidation and is president of Information Organizers, LLC.



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