Becky Harmon didn’t realize she was being set up for identity theft when her phone rang. It all started when she received an unexpected phone call from a mortgage company several years ago. The agent asked for her name and Social Security number before warning her that her house would soon be in foreclosure. Harmon thought it was a clerical error, knowing she was in good standing with her lenders, but the agent gave a different address than the one where she and her husband lived.

The couple checked their credit score and was stunned to see the number 520, with the words “poor credit” flashing on the screen, especially since they had just closed on their real home with a respectable score of 730. They would quickly learn that they were the victims of an elaborate identity theft scam.

“Someone had bought a $450,000 house in my name and then took out a second mortgage in my name and cashed it out for about $200,000. I can’t tell you the shock value,” says Harmon, now a life coach in Atlanta, whose perpetrator eventually took out a third mortgage and pushed the tab to nearly $1 million.
She restored her good name after six long months, but no one has yet been arrested for the crime.

The Federal Trade Commission says identity theft is the fastest growing crime category in the United States. Not only does it devastate individuals, but also businesses whose tax I.D.’s are stolen, who suffer a breach of customer data, or whose employees spend more time restoring their damaged credit than actually working.

The FTC received more than 258,427 consumer ID theft complaints in 2007 (business statistics are not reported separately), the largest category of all reported fraud cases, according to the agency’s most recent anecdotal data. Most I.D. theft involved credit cards during that period, but substantial instances of utilities, loan, bank, government document and employment identity fraud also were reported to the FTC. Identity theft is now worth more than the illicit drug trade, according to statistics by the Federal Bureau of Investigation.

>>> Part 2 of Identity Theft Plagues Consumers & Businesses >>>