The Financial Services Roundtable, a group of large financial institutions, will make permanent its Identity Theft Assistance Center, which provides free assistance to victims. The center had been operating on a pilot basis since August, during which time it claims to have helped restore the identities of 700 people. The center is funded by participating banks and operated by Intersections Inc., a provider of bank-branded ID-theft-protection services.
One form of identity theft is the creation of a fraudulent account under the victim's name or the takeover of an existing account. Unlike cases involving stolen credit cards, ID-theft cases are more difficult to resolve and cause greater damage. One of the 700 ID-theft cases handled by the center resulted in $40,000 in fraudulent purchases, only half of which were recovered, says Steve Bartlett, president and CEO of the Financial Services Roundtable.
Identity theft has captured the attention of banks, consumers, and legislators. On Tuesday, LexisNexis said an investigation of its Seisint unit showed that 280,000 individuals might have had their Social Security or driver's license numbers stolen, in addition to the 30,000 it had previously reported.
Consumers who suspect they've been ID theft victims are referred to the center by their bank. The center asks the consumer to fill out an affidavit and begins monitoring the consumer's credit reports. It alerts creditors with whom fraudulent accounts appear to have been opened, as well as credit bureaus and law-enforcement authorities. Finally, it logs the incident in its database of known ID-theft cases and perpetrators.
The center spares victims the hassle of contacting creditors individually and repeatedly having to prove their identity. "Once they contact the center, they only have to tell their story once," Bartlett says. By creating a rapid-response system, the center shortens the time thieves have to operate and builds evidence that can be used against them in court, he says.
It takes on average of two to three weeks from the time a victim contacts the center until the victim's credit history has been restored, Bartlett says. The center is looking to shorten that to two to three days through process improvements, such as allowing victims to complete affidavits over the phone instead of by mail, he says.
The public can't contact the center directly; if consumers suspect they've been fraud victims, they contact their banks, which provide them with a toll-free number for the center.